Shop & Establishment Registration & Benefits

Shop And Establishment Registration - Process, Documents required and Benefits

The Shop and Establishment Act in India was implemented to govern the rights and working conditions of workers that are employed in the unorganized sector. The act requires all commercial establishments like theaters, eateries, hotels, amusement parks, shops, retail/trade business, etc. to apply for the license and registration within 30 days of commencing the business.

The Act asks the employers to declare the following:

1.      Working hours

2.      Rest interval of employees

3.      Opening and closing hours

4.      Health and safety measures

5.      Wages for overtime work

6.      National and religious holidays

When do You Need a Shop and Establishment License?

When a business entity starts employing people as contract-based or full-time employees, casual workers, etc. then they need to register for the Shop and Establishment licence within 30 days of starting a business to enforce proper regulations for workers’ rights and work conditions.

The shop and establishment registration is required while establishing any commercial place and is a state-based registration for which rules vary according to the state. The commercial establishment as defined in the Act include:

1.       Commercial sector establishments like trading, insurance, or banking organization
2.       Establishments where people are employed to provide service or do office work
3.       Refreshments house, small cafĂ©, boarding houses, eateries, hotels, etc.
4.       Entertainment and amusement establishments like cinema halls, theatres, amusement parks, etc.

Documents Required For Shop & Establishment Registration

Since Every State Has Different Rules & Regulations For Shop & Establishment Registration, The List Of Documents Required Tends To Vary From State To State. However, A General List Is Given For Reference.

o   Passport Size Photograph of Employer.
o   Photo of Shop Along With the Owner.
o   List of Management Employees.
o   Rates of Wages.
o   Details of Employees Currently Working At the Establishment.
o   Employee Weekly Holidays.
o   Address Proof of Establishment.
o   Photo ID of the Owner.
o   MOA & AOA of the Company.
o   Incorporation Certificate Of The Company

Shops And Establishments Act License Renewal

As this registration is governed by the state, the procedure may be a little different in every state. Any shop or commercial establishment that commences operations must apply to the Chief Inspector for a Shop and Establishment Act License within 30 days. Do note that renewal must be completed before expiry of the license.

Shop and Establishment Registration: Advantages

The owner of the establishment may benefit from the registration in the following ways:

  1.     The license will help the owner in getting a current account with the bank
  2.     The owner will be at ease in case of unexpected visits by the inspector from the State
  3.     The registration can be renewed easily online with minimal fee without the hustle
  4.     Online registration is an easy and quick process


Q. Why was the shops and Establishments Act brought in force ?

The Shops & Establishments Act varies from State to State, and are rooted in the Central Shops & Establishments Bill which was promulgated by the Ministry of Labour as a model guidelines on which States could build their own acts. The Act is an attempt at consolidation of uniform benefits accruing from employment and service, be it in a shop, commercial establishments, hotels, restaurants, etc.

Q. What is an Establishment ?

Establishments are generally defined by this Act as commercial establishments, residential hotels, restaurants, eating houses, theaters, or other places of public amusement or entertainment.  Additionally, State Governments may, by notification in the Official Gazette, declare other establishments that do not fall within such definition to be establishments for the purposes of this Act.

Q. What is the penalty for not obtaining such License ?

The penalties for not getting a license to vary from State to State. Additionally, since a Shop & Establishment license is one of the first certifications for commercial activities, they are often used as requisite documents for current accounts in Banks. Thus, not getting a license not only brings with it legislative sanction but also causes problems in day to day operations.

For more information on this visit
Posted by Pooja
Team Taxaj





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