Shop and Establishment Act Registration

The Shop and Establishment Act regulates the shops and commercial establishments operating within the state. Every state has its own Shop and Establishment Act (“Act”). However, the general provisions of the Act are the same in all states. The Labour Department of the respective states implements the Shop and Establishment Act.  Shops are generally defined under the Act as the premises where the selling of goods take place either by retail or wholesale or where services are rendered to customers. It includes offices, godowns, storerooms and warehouses used in connection with the trade or business.  Commercial establishments are generally defined as a commercial, banking, trading or insurance establishment or administrative service in which persons are employed for office work. It includes a hotel, boarding or eating house, restaurant, cafe, theatre, or other public entertainment or amusement places. However, factories and industries are not covered by the Act and are regulated by the Factories Act, 1948 and Industries (Development and Regulation) Act 1951. Tej and Associates offers Shops Act along with other essential tax services like PAN, TAN, TDS, TRC, GST registrations, MSME registration, Professional Tax, Employee Provident Fund .  Employee State Insurance, Non STPI and STPI, Import Export Code, and Trade Licence.   

Registration under the Shop and Establishment Act

The shops and commercial establishments covered under the Act must mandatorily apply for registration under the respective state Act. All establishments and businesses, including the people working and maintaining a business from home, must obtain a Shop and Establishment Registration Certificate or Shop License (“Certificate”) under the Act.  The proprietors who run a business from home without having any physical store or premises are also required to obtain this Certificate. The proprietors of e-commerce business or online business, or online stores and establishments must register under this Act and obtain the Certificate. Every shop and commercial establishment should register itself under the Act within 30 days of commencement of business.  The Certificate or the Shop License acts as a basic registration/licence for the business. This Certificate is produced for obtaining many other business licences and registrations. It serves as proof of the incorporation of commercial establishments or shops. It is also useful when the proprietor of the business wants to obtain a loan or create a current bank account for the business. Most banks will ask for this Certificate for opening a current bank account.    

Regulations under the Shop and Establishment Act

  The Act, among other things, regulates the following matters-

• Hours of work, annual leave, weekly holidays.
• Payment of wages and compensation.
• Prohibition of employment of children.
• Prohibition of employing women and young persons in the night shift.
• Enforcement and Inspection.
• Interval for rest.
• Opening and closing hours.
• Record keeping by the employers.
• Dismissal provisions.

 

Process for Obtaining Shop and Establishment Registration

The procedure for obtaining the Shop and Establishment Registration Certificate differs from state to state. It can be obtained online or offline.  For obtaining the registration certificate online, the proprietor or owner of the shop or business must log into the respective State Labour Department website. The proprietor or owner must fill the application form for the registration under the Shop and Establishment Act, upload the documents and pay the prescribed fees. The prescribed fees differ from state to state. Once the registration form is approved, the registration certificate will be issued online to the proprietor or owner of the business. For obtaining the registration certificate offline, the registration application is to be filled and submitted to the Chief Inspector of the concerned area along with the prescribed fees. The Chief Inspector will issue the registration certificate to the owner or proprietor after being satisfied with the correctness of the application.  The registration application form contains the details relating to the name of the employer and establishment, address and category of the establishment, number of employees and other relevant details as required.    

Documents Required For Shop and Establishment Registration 

  The documents required for obtaining the shop and establishment registration certificate is-

• Shop or Business establishment address proof.
• ID proof of the proprietor.
• PAN Card of the proprietor.
• Details of the employees.
• Payment challan.
• Additional business licence necessary for starting the business, if any.

 

Validity of Shop and Establishment Registration 

  The validity and fees of the Shop and Establishment Certificate differs from state to state. Some states provide the Certificate valid for a lifetime, while other states provide the Certificate valid for one to five years. The registration application needs to be renewed before the expiry of the period of registration.     When venturing into the world of business, navigating legal requirements is crucial. One such essential aspect is getting a licence under the Shop and Establishment Act; known as Shop and Establishment registration. Registration under the Shops and Establishment Act, a state-level registration is designed to regulate shops and commercial establishments. Whether you’re opening a quaint bookstore, a bustling cafe, or an online store, understanding this process is vital. In this comprehensive guide, we will explore the nuances of the shop registration process. We will shed light on how to obtain a Shop Act licence and delve into its significance for businesses.

What is Shop and Establishment Act Registration?

The Shop and Establishment Act applies to a broad spectrum of businesses. It defines ‘shops’ as places where goods are sold, and ‘commercial establishments’ as places employing individuals for office work or providing services. This act is the legal framework that ensures the rights and obligations of both employers and employees in the unorganised sector of employment. Essentially, it sets the ground rules for working hours, leave policies, compensation, and more, fostering a fair work environment. Registration under the Shops and Establishment Act is an important registration for all businesses that want to set up a physical office or establishment. No storefront or physical office can operate without it.  

Registration under the Shops and Establishment Act Fees

The fees for Registration under the Shops and Establishment Act vary from state to state. It’s imperative to check with your local labour department or the respective state’s official website for the most accurate and current fee structure.  

Registration under the Shops and Establishment Act Process Online

You can apply for Registration under the Shops and Establishment Act offline as well as online. In the digital age, many administrative processes, including business registrations, have moved online for convenience and efficiency. Registration under the Shops and Establishment Act is no exception. Most states offer an online platform that simplifies the registration process, making it accessible to entrepreneurs from the comfort of their homes or offices. Online filing is generally preferred by people as it’s less time-consuming. Let’s delve into the step-by-step procedure of registering your business online under the Shop and Establishment Act. For online Registration under the Shops and Establishment Act, entrepreneurs need to:

• Visit the State Labor Department’s website; every state has their own website, so pick the one in which you want to set up your physical shop or office. 
• Click on the “new application form for Shop and Establishment registration” service.
• After filling out the application form with necessary details such as employer and establishment name, address, and the number of employees, submit the applicable documents for Shop and Establishment registration, such as ID proofs, PAN card, and payment challan.
• Once authorities approve it, they issue the Registration under the Shops and Establishment Act certificate online.

   

Why is Shop and Establishment License Essential?

  Registration under the Shops and Establishment Act, also known as a Shop Act License, is fundamental for various reasons:  

• Basic Legal Compliance: It ensures your business complies with the legal framework, fostering credibility.
• Opening a Bank Account: Most banks require a Shop and Establishment License for opening a business account. This facilitates smooth financial transactions and accounting practices.
• Loan Applications:  Registered businesses find it easier to secure loans and financial assistance due to their legal status. This aids business expansion and development.
• Other Business Licences: Many other licences and permits, such as a food licence or health permit, often require a Shop and Establishment License as a prerequisite. This streamlines the process of acquiring additional licences.
• Government Schemes: Registered businesses often gain access to various government schemes and benefits aimed at supporting small and medium enterprises, providing financial and infrastructural aid.
• Local Regulations: Many local authorities require a Shop and Establishment License. This ensures your business complies with the specific regulations of your locality, thereby avoiding fines or penalties.

The Shops and Establishments Act is a comprehensive legislation enacted by every state in India, aimed at regulating work conditions, defining statutory responsibilities for employers, and safeguarding the rights of employees in the unorganised sector. Designed to enhance the administration of working conditions in a variety of establishments, including shops, commercial entities, restaurants, hotels, theatres, and public places of amusement, this labour law addresses the unique needs of India’s vast unorganised work sector, plagued by unemployment, corruption, and exploitation. As state-specific legislation, each region has its distinct set of regulations, forming a crucial legal framework applicable to all individuals engaged in business activities, regardless of remuneration.  

Rights Governed by the Shops and Establishments Act

  The Shop and Establishment Certificate basically includes amendments and laws relating to : Working Hours: The Shops and Establishments Act governs the permissible working hours for employees, promoting a balanced work-life structure. Weekly Holidays: It ensures the provision of weekly holidays, granting employees essential rest and recreation. Overtime Compensation: Employees working beyond regular hours are entitled to overtime compensation, safeguarding against exploitation. Leave Policies: The Act outlines provisions for annual leave, sick leave, and other types of leave, fostering employee welfare. Holidays and Festival Leaves: Ensures employees’ right to take leave on public holidays and festivals. Employment of Women: It lays down regulations for the employment of women, addressing matters such as working hours and safety. Child Labor Restrictions: Strictly prohibits the employment of child labour, safeguarding the rights and well-being of minors. Health and Safety Measures: Imposes regulations for maintaining a safe and healthy working environment, and protecting employees from occupational hazards. Record Keeping: Mandates the maintenance of records related to employee attendance, wages, and other crucial aspects. Anti-Discrimination Measures: Prohibits discrimination based on gender, religion, or other factors, ensuring equal opportunities for all employees.  

Who Do Shops and Establishments Apply to?

Defined by the Shops and Establishments Act, an ‘establishment’ encompasses various spaces, including shops, hotels, restaurants, and entertainment venues. This state-specific legislation, with distinct rules for each region, is designed to regulate working conditions and safeguard employee rights. It extends its coverage to a diverse array of commercial entities, from charitable trusts and educational institutes to those involved in banking, insurance, and brokerage. Adhering to this Act is not only essential for legal compliance but also crucial for fostering a positive work environment and preventing legal complications. State labour departments play a pivotal role in enforcing these regulations, emphasising the government’s oversight. By prioritising employee protections, the Act contributes to fair labour practices, positively impacting businesses in the long run.  

Information That Needs to Be Furnished for Shops and Establishments Licence Registration

 

• Name of firm
• Address of Firm
• Name of Manager, if any
• Nature of Establishment: Nature of shop, Like Clothing Store, Furniture Store
• Number of Employees in Establishment
• Day of Holiday, etc.

    Documents Required for Shops and Commercial Establishments Registration

• PAN/Aadhar card/driving licence/voter ID
• Photo of owner
• Front view photo of the shop along with owner )
• Rent agreement, if rented
• Electricity bill
• Certificate of incorporation
• AOA/MOA of the company/LLP agreement of the company
• Copy of the partners’ consent or the board resolution (in case of a partnership firm)
• List of partners/directors, along with their address & ID proof (if any)
• Details of the existing employees.

A statutory fee is also required to be supplied with these documents, the amount of which varies by state.  

Procedure for Applying and Renewing Licence under the Shops and Establishment act

 

Application Procedure:

• Visit the official website of the respective state for registration.
• Choose the individual or organisational registration procedure based on the business type.
• Fill in essential details about the organisation and proprietor.
• Upload the required documents and signature.
• Pay the prescribed fees online.
• The labour department may appoint an inspector for premises inspection.
• Authorities review the application and, if compliant, issue a valid licence (typically valid for one year).

 

Renewal Procedure:

• Log in to the labour department website using your registration login ID.
• Enter details and submit the renewal application.
• Re-upload necessary documents using the provided application ID.
• Pay renewal fees (varies by state and establishment category).
• Application status changes to ‘Under Scrutiny.’
• Once completed, download the renewed certificate from the portal.

Features of S&E Act:

• The Act’s specifics vary across states in India, covering structure, eligibility, fees, and terms.
• Secure the licence within 30 days of commencing operations, essential for opening a business account.
• Mandatory regular renewal, exempting central and state government-run businesses.
• Proof of legal entity and business conduct rights.
• Display the registration prominently and ensure periodic renewal as per the Act.