Shop and Establishment

An Outlook on Benefits of Shop and Establishment License

calendar07 Aug, 2020
timeReading Time: 4 Minutes
benefits of shop and establishment license

Every person who intends to set up a shop to conduct business activities must opt for the shop registration in their respective state. There are many good reasons why you should avail shop and establishment license without any further delay. Businesses under the unorganised sector witness lethargic growth overtime. The reason being that majority of establishment in such a sector doesn’t have a legal status, which consequently cuts their exposure to opportunities that trigger development. If you are a new shop owner, you must be wondering what type of benefit does shop and establishment license offers to the business entity. This article primarily pays attention to the benefits of shop and establishment license. Let’s get started.

Benefits of shop and establishment license

There are several benefits associated with shop and established License, those are as follows:-

Shop and establishment license

Ease of opening a current account

Business entities that opt to register under Shop act can easily open the current account in the bank. You would never have to hunt for additional documents for this purpose, as Shop act license would enough for that. With an independent bank account, you can avoid the messing upof the business transaction with personal account. Therefore, it will let you create a separate financial account for the business.

Hassle-free inspections

Conducting a regular inspection of shop owners is part of the working protocol of State government and local municipality[1]. Frequent inspections could mess up with your efficacy of work. However, if you have a Shop Act license at your disposal, then you could overcome such trouble with ease. The Shop act license ensures fewer due diligences and auditing requirement.

Ensure peace of mind for employer & employee

Shop act covers every aspect of business activities that also include wellbeing of the employees. The Act preserves the right of employees and ensures their safety in terms of health and financial status. Furthermore, the shop act also discourages any unethical practice that conflicts with the interest of the workforce. This would help the employer to create a positive working environment for the employee.

Enforce better wages and holiday management

The majority of the establishment in unorganized sectors doesn’t have substantial policies regarding wages and holidays. After availing a Shop act license, the shop or establishment must pay attention to these core areas and make it more transparent for the employee and auditing authorities.

Avoid unethical business practice

Child labor is common in unorganized sectors. From a restaurant to a fabrication shop, you could find adolescents working at different verticals of business at extremely low wages despite having a law that prohibits such practice. Nonetheless, Shop & Establishment Act has some strong provisions against child labor. Any entity under the influence of such a license cannot hire a minor to complete their task.

Promote Growth

Inherently, the business owner who shows 100% commitment towards the compliances of the Shop act would be able to reap unseen benefits in a longer run. The shop act strengthens the entity’s root by imparting it a legal status and allow business ownerto witness better exposure to an uncatered segment of consumers over time.

Solidifies entity’s position in the market

As soon as the establishment avails the Shop Act licenses its transforms into a legal entity that inherently solidifies its position as a reliable contender in the market. Consequently, the establishment would start building trust with target customers which in turn helps it to cement its position in the market.

In general, the Benefits of shop and establishment license are practically countless, as it solidifies the entity’s position in the market by imparting the legal status.

Availing Shop Act License

It is incredibly easy for anyone to avail shop and establishment license from the respective state authority. Keep in mind that conditions under this act and fees may vary from state to state. For example, if you want to obtain such a license in UP, you have to submit an online form on the website- along with a prescribed fee based on the type of entity and number of employee. Alternatively, for other states, the applicant has to cater to a different approach to serve the same purpose. Hence, the registration for the shop act is done on the state-wise basis, and its fees differ from state to state.

Read our article:A Complete Overview of Shop and Establishment Act And How to Obtain its License?

Documents annexed with application for Shop Act

  • Voter ID Card
  • Ration Card
  • Driving License
  • Utility bill such as Electricity Bill Water Bill
  • Partnership Deed
  • MOA and AOA in case of private or public ltd firms.
  • NOC from owner in case of rented property.
  • FSSAI License if the applicant deals with Food Shop.


To be precise, every start-up and small scale business is bound to conduct their business activities as per the provisions of the Shop & Establishment Act. Those who opt to neglect the requirement of obtaining the Shop Act license have to bear some penalty. If you have some doubts regarding Shop act registration, you might probably go for an expert’s help. At CorpBiz, we offer top-notch financial and compliance services to help seekers and empower them to confront various compliances with ease.

Read our article:Know the Procedure for availing Shop and Establishment License

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