Shops and Establishments Registration under Shops and Establishments Act

The Shops and Establishments Act comes under the authority of the Department of labour and it supervises and administers any establishments wherein any trade, business or profession is carried out. The act keeps a close eye on commercial establishments and also the working of the societies, printing firms, educational institutions and other premises which undertake banking, insurance, and stock or share brokerage. The Act also offers the obligations of the employer; it is first requirement to obtain a Shop and establishment license from the concerned authority under the act.

In India the Shop and Establishment Act may slightly differ from state to state as each state follows their separate operation.

What are the Premises regulated by the Shop and Establishment Act?

The shop and Establishment Act in India is promulgated by the state and may slightly differ from state to state. However, as per the act, all the shops and Commercial establishments operating within each state are covered by the respective Shop and Establishment Act.

Shops are defined as premises where goods are sold either by retail or wholesale or where a service are rendered to customers and includes an office, a store-room, godown, warehouse or workhouse or workplace. Establishments are defined as shop, a commercial establishment, residential hotel, restaurant, eating-house, theatre or other places of public amusement or entertainment. However Factories are not covered by the shop and establishments act and are regulated by the Factories Act, 1948

What are the various aspects regulated by the Shop and Establishment Act?

Here are few areas regulated by the shop and establishment act:

  • Prohibition of employment of children
  • Hours of work
  • Interval for rest and meals
  • Employment of young person or women
  • Opening and closing hours
  • Weekly holidays
  • Wages for holidays
  • Time and conditions of payment of wages
  • Leave policy
  • Deduction from wages
  • Cleanliness
  • Accidents
  • Lighting and ventilation
  • Precautions against fire
  • Close days
  • Dismissal
  • Record Keeping

When a Shops and Establishment Act is is required?

Every Shop and Establishment needs to register itself compulsory under this Act within 30 days of commencement of work. It is basic license, many other licenses require this as proof of a commercial business, and most of the banks will require one to furnish this license to open a current account.

What Information is required to be furnished for Shop and Establishment License Registration?

  • Name and Address of Firm Name
  • Nature of Establishment like Nature of Shop i.e. like clothing store, Furniture store etc.
  • Number of Employees
  • List of management employees and directors, if applicable

What Documents are required to be furnished for Shop and Establishment License Registration?

  • Aadhar Card / Voter ID/ Driving License
  • Photo of Shop with owner
  • Rent Agreement (Electricity bill if rented)
  • Shop or Business Address Proof
  • PAN Card
  • Payment Challan
  • Additional Business licenses necessary to start a business(Certificate of Incorporation (COI), Memorandum of Association(MOA), Articles of Association(AOA), Limited Liability Agreement(LLP)

As In India the Shop and Establishment Act may slightly differ from state to state as each state follows their separate operation  

Process for Obtaining License in Delhi:

For Delhi the complete process of registration can be completed online. This service of registration is availed by submitting an e-form available on labour department website at www.labour.delhigovt.nic.in

As specified under Rule 3 of Delhi Shops and Establishments Rules, 1954, Form A needs to be filled to get the Registration Certificate for any establishment. The form require certain details like name and category of establishment , complete address , details of the shop/establishment and the shop owner, details of employee and nature of business.

After the submission of the Application The Chief Inspector verifies the application and if approved , issues a registration certificate to the applicant, after that the shop or commercial establishment will be registered.

This registration certificate is to be displayed at the shop or commercial establishment and is to be renewed regularly and systematically by the Business owner.

Note: After obtaining the Registration

  • If there is any change to be made after obtaining the registration Certificate, same should be notified to the Chief Inspector.
  • Registration certificate to be obtained within 90 days of the commencement of the business placement agencies providing domestic services are also mandatory to be registered under the Act.

Records to be maintained under the Shops and Establishment Act:

Records to be maintained under the Shops and Establishment Act related to employment records, fines, deductions, advances, salary and holidays etc. these requirements may vary from state to state.

In case of cancelling the license registration

Procedure to cancel Shops and Establishment License

  • The prescribed form for the cancellation of application should be filled in fully and coherently.
  • The same should be applied within 10 days of actual closure of the establishment.
  • The registration number of the establishment should be mentioned on the cancellation form including the name, business address and other relevant information.
  • The reason for cancellation of the license must be mentioned in the application form.
  • Make sure the reasons cited for cancellation are valid.
  • Finally a copy of paid legal dues of employee(s) should be attached.

What are the Advantages of Shop and Establishment License?

  • Legal entity proof: that is the proof that provides the right of doing business in particular region or state.
  • Business bank account: act as proof of legal entity proof for opening a current bank account.
  • Smooth inspection: as state government and local municipality carry out periodic inspection visits for monitoring the proper operation of shops and establishments along with license as well.

Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION.

Author- CS Aakansha Negi and can be contacted at csaakanshanegi@gmail.com

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