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Shop & Establishment License

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Overview of Shop and Establishment License

Most of the businesses in India including shops, restaurants, cafes, etc.; are regulated under the provisions of the Shop and Establishment Act. To regulate the work environment and that the rights of the workers are being protected, it is mandatory to get your business registered under the Shop and establishments Act. However, the rules and regulations vary from state to state, in which the act aims at providing proper working conditions to the laborers and taking care of their holiday’s, wages, and rights. The License is issued to the following establishments:-

  • Business,
  • Trade,
  • Professions registered under the Shop and Establishment Act.

The Shops and Establishment act makes sure that both organized and unorganized sectors are providing appropriate working conditions to the laborers. An applicant (Establishment) has to file an online application concerning to his state official portal.

Who are Eligible to Obtain a Shop and Establishment License in India?

  • Wholesalers or the retailer's shops and establishments
  • Service Centers
  • Warehouses, Storerooms, and Godowns
  • Additionally, any other working places
  • Hotels
  • Eateries and restaurants
  • Entertainment houses, Amusement parks, Theaters, etc.

Shop and Establishment License

What are the Benefits of Obtaining Shop and Establishment License?

What are the Benefits of Obtaining Shop and Establishment License?
  • Legal Recognition

    the Shops and Establishment license provides legal recognition to the respective establishment/shop.

  • Acts as a Business Proof

    For further business registrations in India, the Shops and Establishment license acts as a business proof.

  • Helpful in Opening the Bank Accounts and other Formalities

    The registration of Shops and Establishment becomes necessary for reasons like opening a bank account in the name of establishment/shop.

  • Provides a Platform for Raising New Investment

    The Shops and Establishment license helps the proposed entrepreneur in raising investments through loans or venture capitals for the proposed business establishment.

  • Avails the Government Benefits

    By getting the shop and establishment license, the entrepreneur can avail the government benefits in different stage of business.

  • Saves time

    As the process of shop act registration has turned online, it saves time in the registration procedure as well as creates less hectic while in operation.

What Documents are required for Obtaining the Shop and Establishment License?

Below-mentioned documents are required for Shop and Establishment License-

  • Id proof such as Aadhar card/PAN card/ voter identification card/ driving license of the employer.
  • Passport size photograph of the employer
  • The Affidavit, Cancelled cheque, and Bank statement,
  • A photo of the establishment/ shop along with the employer
  • In the case of rented property, a copy of the rent agreement
  • Any utility bill of the working premises.

Other Documents Required as per the Establishment or Business Entity

  • In the case of a trust, a list of number of trustees
  • Certificate of incorporation, MOA, and AOA as per the Companies Act,
  • In the case of co-operative societies, a list of number of members and chairman
  • Partnership deed with all the important information such as the name of the partnersalong with their signatureand share percentage of partners.

What is the Registration Procedure of Shop and Establishment License?

Physical Registration Procedure: - Any commercial establishment/shop has to apply for the license to the chief inspector of the respective area within 30 days of commencement of business activities. It is applied through a prescribed form that requires some important information such as-

  • The name of the respective employee,
  • Name and address of the establishment,
  • Number of employees in the establishment, and
  • Category of the proposed establishment and some other details varying from one state to another.

Once applied is reviewed by the inspector then in the next step license is provided to the establishment. The Shop and Establishment License must be displayed at the premises and should be renewed at the prescribed time. Additionally, it is mandatory to obtain the Shop and Establishment License for all the business entities even if they are working from home.

Note-As per the act, any establishment or shop in case of closing down the business has to notify the chief inspector in writing before 15 days of closing. The chief inspector further cancels the registration certificate of the establishment or shop by removing it from the register.

Step-by-step Online Procedure for Obtaining a Shop and Establishment License

  • Visit the website

    First of all, an applicant needs to visit Labour Department website of respective state (as applicable) and create the user ID and password through the same link.

  • Fill in the Requisite details to create the profile

    Below mentioned details are required-

    • 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

  • Form A

    Click on Shop and Establishment Registration Form A.

  • Fill in the Requisite Details

    Select the state and district of your shop or establishment and fill in the requisite details asked in the form.

  • Upload Documents

    Once the form is filled, click on the Upload documents, and attach the requisite documents.

  • Fees

    After uploading all the documents, click on the fees button and make the payment.

  • Checking the Status

    An applicant can check the status on the under scrutiny option.

  • 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.

Notes: However, in the case of Physical form Submission, it might take around 15-20 working days for the physical verification and issuance of registration certificate in the major city areas. However, it may vary from one state to another.

What are the Penalties for Shop and Establishment Act?

It is compulsory for the entire establishment under the Act to obtain Shop and Establishment registration and comply with all the rules and regulations prescribed under the Act.

However, in case of any failure in getting registration and following the rules and regulations of the Act, the establishment would be liable to pay the penalty. The amount of penalty would vary from state to state.

What are the Aspects Regulated as per the Provisions of the Shop and Establishments Act?

The Shop and Establishment Act has made various provisions to regulate the aspects relating to the working of shops and establishment in India. Following are Some Key Aspects Regulated by Them:-

  • Maximum working hours of the employees/ labors
  • Time duration allotted for meals and rest
  • Regulating laws to prohibit child labor in factories and other establishments
  • Women employment
  • Number of compulsory weekly holidays provided to the employees
  • Close/off days of the establishments/shops
  • Opening and closing hours of the establishments/shops
  • Wages to employees for the holidays
  • Accidents coverage policies
  • Preventive measures against fire
  • Proper ventilation and lighting for workers
  • Clean and hygienic premises for the workers
  • Conditions and timing for the payment
  • Regulation of deductions on the payments
  • Leave Policy
  • Dismissal
  • Employee’s proper record keeping

Note: More information related to the Shop and Establishment Act can be gathered on the relative state government portal.

CorpBiz Procedure for Shop and Establishment License

Kindly utilize the steps given above to integrate legally and securely a Shop and Establishment License and get the benefits in the form of better-quality sales, satisfied clients, and employees. Our CorpBiz experts will be at your disposal for assisting you with guidance concerning Shop and Establishment Licensing and its compliance for the smooth functioning of your business in India. CorpBiz professionals will assist you in planning seamlessly at the least cost, confirming the successful conclusion of the process.

It is advisable that an attorney with “Shop and Establishment experience” must be appointed to overwhelm many of the potential pitfalls that creep around within Shop and Establishment License and to understand the requirement in detail. The elementary information would be mandatory from your end to start the process. The Attorney will begin working on your request once all the information is provided, and the payment is received.

Why CorpBiz?

CorpBiz is one of the platforms which coordinate to fulfil all your legal and financial requirements and connect you to consistent professionals. Yes, our clients are pleased with our legal service! Because of our focus on simplifying legal requirements, they have consistently regarded us highly and providing regular updates.

Our clients can also track at all times the progress on our platform. If you have any questions about the Shop and Establishment License process, our experienced representatives are just a phone call away. CorpBiz will ensure that your communication with professionals is charming and seamless.

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  • Prepare application for Shop and Establishment license + complete all admissibility criteria for preliminary screening
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  • Shop and Establishment License at your Door step.

Frequently Asked Questions

Yes, under the Shop and Establishment Act, every business has to seek approval from the Department of Labor before commencing the business.

  • A register containing all details of employment
  • Any deduction from salary
  • Advances issued
  • Any fine applied
  • Salary details
  • Holidays awarded

Files related to annual holidays and the number of employees needs to be submitted to the office of the Municipal Corporation annually.

Every shop and establishment needs to register itself compulsorily under this Act within 30 days of commencement of work. As this is such a basic license, many other licenses require this as proof of a commercial business. For example, most banks will require you to furnish it if you want to open a current account.

  • To protect the rights and satisfaction of the laborers working in the organized sector such as establishments, hotels, and restaurants as well as in the unorganized sectors.
  • Additionally, it regulates the wages, holidays, incentives, etc. to set better standards for the working conditions of the employees.

It is mandatory for all shops and establishments, whether employing more than one employee or more, to apply for registration under the Act within 30 days of commencement of business.

  • Working hours.
  • Breaks
  • Leave taken by the employee,
  • Leave with wages,
  • Penalties
  • Salary.
  • The certificate should be displayed at a notable place within the shop.
  • Renewal of certificate before the expiration date.
  • Any alteration or updating should be informed to the chief labor inspector.
  • Any person who indulges in behavior restricted under the actwould be liable to punishment under the law.

The fundamental object behind The Shops and Establishment Act,is to make sure all employees in the establishment are given equal rights and benefits in all foundations.

  • Establishment is the act of establishing; an approval or inducing; settlement; confirmation while,
  • Shop is an establishment that sells goods or services to the public, originally a physical location, but now a virtual establishment as well.

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