Registration Under Shop and Establishment Act

Introduction

Every small time hotel and shop has to secure the shop and establishment license for the purpose of carrying out business activities. However, this license would vary based on the requirements of the state. For example, the shops and establishments license for Rajasthan would be different from the procedure for shops and establishments in Uttar Pradesh.

Hence it is crucial for the applicant to understand the Central rules as well as the state rules related to shops and establishments before making an application. Moreover, these rules regulate employees working in the organised sector as well as the unorganised sector. Different working conditions have to be complied by the applicant.

Apart from this, the working conditions and terms of employment are also regulated by this license. Therefore, it is important to adhere to the requirements of the state.

Meaning of Shop and Establishment Registration

Shop and Establishment Act registration is the legal permission to run the business in India. The Shop and Establishment Act is regulated by the Department of Labour. Any shop establishment in India must register under the act within 30 days of establishment. Licence obtained by shop act registration serves as a proof for the existence of the business.

The Registration under shop and Establishment Act is one of the mandatory requirements for all businesses which operate from an establishment or a shop. When you establish your business you can get registration for your Firm in many ways, like:

Let us discuss more about, why to Register under Shop & Establishment Act, Eligibility for Shop & Establishment Registration, Registration under Shop & Establishment Act, Benefits of the Shop & Establishment Registration, Documents Required for Shop & Establishment Registration, Amendment in Shop & Establishment Registration and Records to be Maintained under Shop & Establishment Act.

Which entities require Shop and Establishment Registration?

Not only shops but all the commercial establishment mentioned below are required to get registered itself into shop and registration act:

When to apply for registration under this act?

When a business entity starts employing people whether on contract basis or full-time employees, or to casual workers, etc. then every shop and establishment needs to register itself compulsorily under this Act within 30 days of commencement of work to enforce proper regulations for worker’s rights and work conditions.

How to Ascertain Whether You Need to obtain a Shop and Establishment License or not?

The steps to ascertain whether an individual is required to obtain Shop and Establishment Registration or not is enumerated below:

What should Employer declare at the time of registration?

Documents/information required for registration:

How to apply for Shop and establishment registration?

You can apply for shop and establishment registration online by visiting the state government’s website. The application in the format prescribed on the website needs to be submitted with the help of above-mentioned details and documents along with the prescribed fee. When the application is received by the Department of Labour, an inspector will visit your establishment to check the details and will provide the registration certificate/license in accordance with the Act.

Benefits of obtaining a shop and establishment license:

The following benefits are present with Shop and Establishment Registration:

  • 1

    Help in opening Current Business Account:

    Every banks required a legal entity proof to open a current bank account. As per RBI Norms each shop & Establishment has to open a separate current account for its daily transactions. With the help of shop and establishment certificate you can easily open a current business bank account.
  • 2

    Served as proof of legal entity:

    When you submit a legal entity proof for your establishment (such as a partnership firm or a proprietorship firm) you will obtain the right of doing business in same state.
  • 3

    Inspections becomes smooth

    The local municipality and the State Government authorities conduct visits and regular inspections to check whether the shops & establishments in locality are functioning properly or not. If you have the shops & establishment Certificate at the time of inspection in, you can get over such inspections quickly and smoothly.
  • 4

    Government Benefits:

    The policy-making body for all small businesses in a State is State DIC Department when it comes up with certain schemes for the benefit of small businesses at that time Entities having the shops & establishment license can only avail the benefit of those schemes.
  • 4

    Less Compliance:

    There will be less Legal Compliance that you Need to follow. So, there will be only one-time cost.

What records to be maintained under shop & establishment act?

Under the Shop and Establishment Act, every business has to take approval from Department of Labour and keep up-to-date registers regarding details of employment, fines, deductions and advances, salary and holidays. The requirements may vary from state to state. No Regular return have needed to be filed under this Act Provided files related to annual holidays and number of employees need to be submitted to the office of the Municipal Corporation annually.

Amendment in shop & establishment act registration:

Any changes to the Shop and Establishment Act registration must be intimated to the concerned officer within the prescribed time limit. In case of closure of the Business, the employer is required to intimate the concerned officer and apply for surrender of the registration. The officer after the satisfaction about the correctness of the application, will issue an order cancelling the existing registration.

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FAQs

When going for the above license the following requirements have to be considered:

  • Once the certificate is provided to the applicant, the inspector can conduct periodic inspection of the premises.
  • Certificate of registration for the above license has to be renewed annually.
  • The business or establishment must display in an area which is visible to the public the certificate for shop and establishment registration.
  • Any closure of the establishment must be notified to the inspector 15 days in advance.

As per the provisions of the Shop and Establishment Act, the term “Commercial Establishment” denotes commercial sector such as banking, insurance, and trading establishments; hotels, eateries, cafes, and refreshment houses; establishments wherein employees either do office work or provide service; and amusement and entertainment places such as cinema halls, theatres or amusement parks.

Yes, information pertaining the employees must be submitted to the labour department. This would include any information pertaining to the annual leaves provided to the employees.

Yes, it is mandatory to register under this license. Any applicant who does not consider registration under this license would have to face penalties from the commissioner.

No factories are not allowed to take this form of registration. This is only for shops and other forms of establishments.

The primary objective of this act is to provide uniform privileges and benefits for all employees working in different establishments, shops, commercial places, residential hotels, restaurants, theatres, etc.

The basic difference as per the provisions of the Shop and Establishment Act is that the term “establishment” comprises of hotels, theatres, restaurants, and other amusement parks. In contrast, a shop is a premise where you can sell goods and offer services to your customers. For example: storerooms, offices, or warehouses.

The shop and establishment license certificate acts as documentary proof for the shop and establishment. Moreover, it assists in opening a Current Bank Account as well.