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Shop and Establishment Registration
In India, one of the most important regulations of which most businesses are required to comply is the Shop and Establishment Act, which is enacted state wise which means it can vary from state to state. This Act is enacted to regulate the payment of wages, working hours, leave, holidays and other working situations of people employed in the unorganized sector. The Shop and Establishment Act is regulated by the Department of Labour in India. Shop and establishment registration or license can be done online / offline with the help of Registration SEVA.
Shop and Establishment is a Government approved license which grants permission to traders for doing business or running a shop. It is regulated by the Indian Labour Law to protect the interest of the employees under the unorganized sector. As per the Shop and Establishment Act, the owner of a shop must make these declarations:
- Working hours of the shop
- Opening & closing hours of the shop
- Employee breaks
- Deductions from wages such as PF, Pension, Leave Policy
- National holidays
- Wages paid for overtime
- Leave policy, etc.
- Health and safety measures (like Sanitation and cleanliness, Firefighting and Accidental remedies)
Moreover, the Profit or Non-profit organizations like Societies, Educational Institutions, Charitable Trusts or any other commercial establishments catering the services of banking has to procure the license of Shop & Establishment license.
The Shop and Establishment Act clearly defines both the terms of shop and establishments. Let’s have a look at them one by one.
Is Shop & Establishment Registration compulsory?
Every shop and establishment needs to register itself compulsorily under the respective state Act within 30 days of commencement of work. This is a basic license to obtain by every business, and this license can work to obtain many other licenses and serve as proof of a commercial business.
Are You Required to obtain the Shop and Establishment License?
- Firstly, you need to check and understand whether your proposed business is covered under the category of the shop and commercial establishment defined under the Shop and Establishments Act.
- If yes, then you are required to the follow the norms and regulations set by the Act for treatment of their employees which may vary from state to state.
- Check the respective state list of the Shop and establishment as every state has given a list of Shop and establishments to be covered under the Act, such establishments are required to run their business by abiding the rules and regulations pursuant to the Shop and Establishment Act.
- Thereafter you need to file for registration under the Act, within 30 days of commencement of your establishment.
A shop owner can avail a number of benefits from Shop and Establishment License:
- Legal Entity Proof:
Each shop or business required a legal entity proof like proprietorship firm or partnership firm etc. which gives the right for doing the business in your area or state for the same.
- Business Bank Account:
Each shop & Establishment has to open a separate bank account for the daily transactions as per the RBI Compliance. Hence, every bank asks for a legal entity proof to open a current bank account. So on the basis of the shop certificate you can easily open a current business bank account.
- Regular inspection by the Government Authorities:
State government and local municipality conduct regular inspection visits for checking the proper working of shops and establishments along with license as well. If you have the Shop Act license, then you can quickly get over the inspections every time.
- Government Benefits
Each state has a DIC Department which creates the policy in the respective state for the all small business. On the basis of Shop License Registration Certificate, you can easily avail the government benefits.
- No Compliance
Shop and Establishment does not require any kind of compliance after registration. Hence, no further cost is involved.
Following Documents are required for applying shop & establishment license which may vary as per the applicant:
In case of Proprietor or Individual:
- PAN and Aadhar of the proprietor
- Id proof such as Voter Id or Passport of applicant
- Address proof such as electricity bill or bank statement of proprietor
- Details of the employee, if any
- Nature of entity such as owned or rented along with its address proof
In case of Partnership:
- PAN and Aadhar of all the partners
- Identity proof and address proof of partners
- Partnership Deed
- Employee’s details if employed
- Office address proof
In case of Company:
- MOA and AOA of the company
- Certificate of Incorporation
- Details of directors and members such as name, address, contact details, etc.
- Number of shares held by subscribers
- Identity proof of directors (Voter Id/Passport/Driving License)
- Identity proof of subscribers (Voter Id/Passport/Driving License)
- Address proof of directors (Electricity bill/Bank Statement)
- Address proof of shareholders (Electricity bill/Bank Statement)
- Details of employees or staff employed in an organization
You need to follow the below procedure to get a Shop and Establishment License:
- Download the application:
First of all, you need to download the registration application form from the respective states official website in which your shop or establishment is located.
- Fill the requested details:
After downloading the application form, you need to fill in the below given required details:
- Name of the proposed establishment/shop
- Name and details of the employer
- Name and details of the employees at that time
- Registered establishment address along with NOC or rent agreement (only for rented premises)
- PAN card details of the employer
- Submit the Application:
Once you have filled all the details correctly, submit it to the chief inspector or inspector in charge of the shop and establishment act along with prescribed fees amount.
- Verification of the Application:
After submission, all the documents and the application would be verified by the verification authorities.
- Issuance of the license:
If all the documents are as per the requirements of the act, the certificate shall be issued to the proposed establishment/shop.
Please note that the time duration of getting a license might differ from state to state.
Thereafter, the owner can display the Registration Certificate in his shop or establishment. Moreover, he has to renew the license in periodical terms.
Renewal of License
A license issued under Shop and Establishment Act remains valid for 5 years and shall be renewed before expiry. As Shop & Establishment License is a state license, rules and procedures may vary as per state to state. Application for renewal can be made online in the same manner as the original application is made to the registrar:
- Go to the official website of Shop & Establishment and login to the portal using Username & Password.
- Click on the tab “Apply for renewal” and proceed further
- Fill the complete information by filing necessary details and attach the supporting documents
- Following documents are required for application of renewal:
- Scanned self-attested copy of PAN &Aadhar of proprietor/partners/directors
- Copy of voter-id/passport/driving license
- Passport size photograph
- Rent agreement of commercial premise and NOC from the landlord
- Registers maintained such as attendance registers, accident entry, etc.
- Name and address of the establishment
Maintenance of Records under Shop and Establishment Registration
Under the Shop and Establishment Act, every business has to seek approval from Department of Labour and have to keep:
- Update registers regarding details of employment, fines, deductions and advances, salary and holidays. The requirements may vary from state to state.
- Files related to annual holidays and number of employees need to be submitted to the office of the Municipal Corporation annually.
- No Regular return is filed under this Act.
How can we help in getting registration?
01. Who has to apply for Registration under Shops and Establishment Act?
Every employer and owner of a shop & establishment shall apply for registration of his shops/Establishment within 30 days of commencement of his/her business.
02. Is it necessary to take approval from the labour department?
Yes, under the Shop and Establishment Act, every business has to seek approval from the Department of Labour before commencing the business.
03. What are the objectives of Shop and Establishment Act?
All Indian state has enacted certain rules and regulations with regard to conditions of work. The main objectives are to secure uniform advantages for employees working in different establishments from shops, residential hotels, and commercial establishments to restaurants, theatres and other places of public amusement or entertainment.
04. Does a business operating without any workers require the registration?
Yes, whether the operations are employee-driven or not, the business entity must get shop act license subject to the State laws. In most states, the registration is mandatory within 30 days, irrespective of the number of employees.
05. Are factories covered under Shop & Establishment Act?
Factories are not covered by the shops & establishments act as they are regulated by the Factories Act, 1948.
06. Whether a separate registration for the branch is required?
Yes, each branch is to be registered separately irrespective of the jurisdiction of the authority.
07. Whether a Private Limited Company also needs to get a Shop and Establishment License?
Of course, the shop and establishment act is applicable to every office and shop where commercial activities are carried on even on employing one employee. The Office or Corporate office will be covered under the Shop and Establishment Act. Moreover, the provision of leave and other rules shall be applicable, even when your company is registered under Companies Act.
08Whether the Registration certificate requires to be renewal, if so at what intervals?
Every registration certificate must be renewed before 30 days of expiry of the year i.e., by 1st December of every year.
09. To whom you can contact for Shop and establishment act registration, license and renewal?
You can contact Registration SEVA expert team, which have established a benchmark in the market for the fastest delivery and professional approach towards the work assigned to the team. You can reach out to us by posting a query and we shall contact you within a few hours.
10. Whether the premise will be verified by the concerned officer?
Physical verification of the premise is not necessary normally. However, the officers are authorized and may come to verify the premise before grating a registration certificate.
11. What if the shop has to be closed after registration?
In case the shop or establishment would like to close down the business, the occupier should notify the Chief Inspector in writing within fifteen days of the closing. The Chief Inspector, after reviewing the request for closure can remove the shop or commercial establishment from the register and cancel the registration certificate.