Shop & Establishment License

In India, most of the businesses such as restaurants, shops, cafes, and so on are operated and controlled as per the provisions of the Shop and Establishment Act. Shop and Establishment Act License Registration works with the aim to secure the stationary benefits for the workers, who are working under businesses like shops, commercial establishments like residential hotels, theatres, and restaurants.

Shop and Establishment License Act

The Shop and Establishment License is a formal certificate granted to the business, trade, which are registered as per the Shop and Establishment Act. All the rules and regulations of the Act are regulated and managed by the Department of Labor. Apart from regulating commercial establishments, the Shop and Establishment Act also keeps a check on the working of charitable trusts, educational institutes, and societies, and other entities for example banking, insurance companies, stock exchanges, share brokerages, and so on.

Both unorganized and organized business sectors are regulated and managed under this act which makes sure suitable working conditions are provided to the workers. The rules and regulations of this Act vary from one state to another but the primary aim remains the same. Hence, the establishment or business sector that has to receive this license has to submit an online application on its state official portal.

Benefits of getting Shop and Establishment License

  • This basic license helps the establishments in further legal registrations
  • The registration is mandatory for many business-related operations like opening a bank account in the name of a shop or establishment
  • Provides official or legal recognition to that particular establishment or business or shop
  • Acts as a business proof while applying for further legal registrations in India
  • Helps to raise investments or loans or venture capitals for establishment or shop

Documents Required For Registration Under Shops and Establishment

Certificate of Incorporation, MOA & AOA of Company / LLP Agreement of the LLPCopy of PAN Card of the Company or LLPList of Director or Partners and their ID and Address Proof and Copy of Board Resolution or Partners ConsentActual Photo of the Shop or Establishment with Name Board in local language at the entrance duly displayed address Proof of the Company or LLP where the name of the corporate is clearly mentioned.Copy of the Licence, Permit, Registration which is mandatory under any law to be obtained before starting the business of the applicant in India.

What is the Registration Procedure of Shop and Establishment License?

Physical Registration Procedure: - Any commercial establishment/shop has got 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 just in case of closing down the business has got 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 the Labour Department website of the 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 alongside 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 shape is filled, click on the Upload documents, and fasten 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 whole establishment under the Act to get Shop and Establishment registration and suits all the principles and regulations prescribed under the Act.

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