The Shops and Establishment Act is a comprehensive legislation providing for provisions related to registration and mannerisms for proper functioning and conduct of businesses falling under the purview of the Act. The Act covers most of the businesses operating within every state in India and is especially suited for all shops and establishments situated in public place i.e. tea joints, cafes, bistros, eating joints, malls, cinemas, etc (The Shop and Establishment Registration). and all places of public amusement and entertainment. However, it is not applicable to factories and establishments covered under Factories Act, as they are regulated under Factories Act 1948.
The Shops and Establishments Act is a state –level act and therefore the rules and regulations governing the Act vary from one another. The Act has been primarily established to regulate all shops and commercial establishment operating as well as proposed to operate in the state. For small scale businesses and Micro and Small business units, it also acts as a proof of existence of the businesses.
Following are the main objectives for the introduction of the Act-
- Regulation of wages & terms of service for employees.
- Fixation of work hours including overtime and weekly holiday.
- Regulation of work conditions at workplace i.e. cleanliness & sanitation, lighting, ventilation, fire safety, accidents etc.
- Rules for prohibition from employment of young children and women, employment of adults for employed in shops and commercial establishments.
- Rules regarding monthly wages and deductions to be made.
- If any, Conditions for leaving work dismissal.
- Rules regarding record-keeping and registers etc.
- Leaves and maternity leave in case of women employees.
Thus, it is mandatory for each such business establishment to obtain permission through a registration certificate to the concerned Labour department in each state at least 30 days before initiation of business operations regardless of the size of the business and if actual operations being fully functional or not. Shops and Establishment registration is the basic license required to commence and operate businesses. However, there are additional licenses and permissions required to be obtained by the business owner/proprietor to manage business operations.
Similarly after obtaining registration, it is also necessary to intimate to the licensing authority regarding any changes in the business establishment. Such as all establishments covered under the Act need to update the terms and conditions regarding employment details regarding hiring employees, changes in payments, deductions etc. In case any employer or business owner decides to shut down the business or cease business operations, such owner/employer shall also intimate the same to the registering authority, who will after satisfying itself that there are enough reasons for closure of business operations cancel the registration certificate and removal of the name of the establishment from the “register of shops and establishments”.
Eligibility for Shops and Establishment Registration
As the name of the Act suggests, all shops and all the commercial establishment are eligible to obtain registration under the Act from the Labour welfare department of each state /UT. The definition of Shops as well as establishment is provided below-
- Shops are generally defined as the locations/ premises where goods are sold and/or offered for sale to general customers and where goods are sold either as wholesales or through retail or where services are rendered or offered to be procured to general customers.
By definition, shops include office premises, storage houses, godowns, warehouses and similar places that are used in connection with the trade and business activities.
- “Commercial Establishment” as defined under the Act means and includes-
- Commercial business offices such as banking, trading or insurance offices or similar establishments.
- Any business entity where employees are hired and engaged to undertake and fulfil office work or provide services.
- Restaurant, Eateries, Hotels, lodging houses or similar places.
- Places of public amusements or entertainment such as parks, cinema theatres, malls or similar places.
Therefore, all the above-mentioned premises need to get registration under the registration authority in the State/UT, where they are located or proposed to be located and further need to adhere to all the applicable rules and regulations except business establishments and factories covered under the Factories Act 1948 and those covered under Industries (Development and Regulation) Act 1951.
Likewise, all the persons running businesses from home without having any physical store and e-commerce business owners do also need to get registered under the Act and must get registration certificate/License under the Act.
Shop and Establishment Registration with Legalmart
The process of registration of Shop and Establishment Registration is a simple process, but requires caution and precision to not to end up in rejection of application. Therefore, it is always advisable to take expert assistance of professional experts having knowledge and experience in incorporating a Shop and Establishment Registration and helping you to gain your certificate of incorporation in a simple, quick and efficient manner at the comfort of your convenience. For which, Legalmart has gained experience in all services required for Shop and Establishment Registration under one roof.
Benefits of Shop and Establishment Registration
- Simple process to open business account.
For shops and commercial establishments holding registration under Act, it is easier to apply and open a business bank account and there is practically no need of additional documents. Thus, having a separate business account will surely help you to save time and unnecessary hassle in separating business transactions with personal transactions and additionally current account benefits like overdraft from banks.
- Hassle-free process of inspection
It’s a known fact that the shops and business establishments are part of regular inspections and check-ups by state machineries to ensure that all the rules and regulations are being followed properly. With shops and establishments registration, the employer or owner has to worry lesser about the same, as rules are already being followed and the shop/establishment has established credibility in the area of its location. Thus, it has to worry lesser about the due diligence and audit requirements with respect to such business establishment.
- Better employer-employee relationship
The Shops and Establishment Act contains provisions for welfare and well-being of the employees employed in such establishment, which has the effect of curbing abuse and exploitation of employees, assurance to health and safety in the course of employment and failure to comply with the same can lead to hefty penalty to the employer. Thus, registration under the Act ensures better employer-employee relationship and even healthier working environment.
- Ensures better management
Generally, unorganized sectors have the demerit of any regulation for health, safety, security and well-being of the employees working in the workplace. However, employees covered under the Act are allowed fair wages on time, safe work space, sanitation facilities, provisons for wages and timely leaves, maternity leaves for women etc. through creation of various polices and the same are recorded in the registers maintained by the employer that are not sure in the unorganized sector. Thus, registration under the Act ensures transparent policies and better management at the workplace.
- Curb on unethical practice and exploitation
Though child labour has been prohibited under the provisions of law. Still, it is practiced in many parts of country especially in shops and commercial establishments. Further, they are forced to work on low wages and denied necessary facilities. However, under the Act there are stricter provisions to curb the same and any failure could lead to penalty under the Act.
- Business Growth & Goodwill
A business establishment registered under the Act is subject to rules and regulations prescribed by the State under the State (Shops and Establishments Act). Thus, an establishment that complies has better business growth in the long run as a legal entity and earns trust among consumers. Consequently, by serving old as well new customers, the business grows strongly and helps to earn business goodwill in the market.
- Access to Government Benefits
Every employer or business owner holding registration certificate under the Act can avail benefit of government policies built for small and medium enterprises in each state by the DIC Department.
- Proof of Business existence
The holder of registration certificate under the Shops and Establishment Act can use the certificate as proof of existence of business as a legal entity for smaller businesses like proprietorship firm or partnership firm etc. which allows the business to initiate business operations in the area of business and also serves as a basis for acquiring other additional licenses.
Documents Required Shop and Establishment Registration
Following are the documents required for applying for registration under “Shops and Establishments“Act-
- Name of the Shop/ Business Establishment along with proof of registered office.
- Name of the owner/ proprietor including his contact details and an identity proof.
- PAN Card of the owner/proprietor of business.
- Total number of employees working in the establishments along with their details.
- Copy of fee challan made for application.
- Rent Agreement/Sale deed for the ownership of business premises.
- Details of any other business licenses obtained by the establishment for initiating business operations.
Online Process of Shop and Establishment Registration
Since Shops and Establishments Act, is a state-level tax, the rules and regulations governing the process of registration, fee charged for registration, registration authority and other provisions vary from state to state.
Provided below is the general process of registration, which could be obtained from the respective registration authority established in each state-
For online process-
- Every eligible applicant needs to obtain a “Shops & Establishment” Certificate prior to at least 30 days before commencing business activities. Such applicant shall be required to log on to the portal of respective State Labour Department and click “ Online Registration under Shops & Establishment” and click “Online Registration”.
- Open the Registration form is opened, the applicant(proprietor/owner) shall put details such as-
- Name & contact details of the employer/owner.
- Name of the establishment & registered address of the owner.
- Size of the business & category of business.
- Total employees working in the establishment.
- Date of initiation of business operations.
- Once the form is filled, upload documents and pay prescribed fees which shall be different from state to state dependent on the number of employees employed by the business.
- Once the registration form is approved, the registration certificate will be issued online to the proprietor or owner of the business.
- On submission of the application, the registering authority will go through the application to satisfy whether that all the requirements under the Act have been duly complied with. If the registration authority gets satisfied of all the requirements under the Act, it shall approve the registration and will grant a registration certificate evidencing successful completion of the registration process.
- On receipt of registration certificate, the applicant shall be under the obligation to prominently display the certificate at the shop/establishment. Further, any changes in the establishment must be intimated to the Registering Authority within such time as prescribed by the authority.
For applying “Shop and Establishment” Registration manually, the applicant needs to download the registration application from the online portal and submit it after filling all the requisite details to the Registering authority along with the prescribed fee.
On receipt of the application, the registering authority will verify the application and on satisfaction of the requisites of the application have been fulfilled and complied with, will issue a certificate of registration.
Validity of Registration Certificate-
The registration certificate so issued shall be valid for such period as prescribed under Shop & establishment state rules ranging anywhere between one year to five years or even lifetime validity in some cases. Thus, the certificate needs to be renewed on end of such validity period.
Why Choose Legalmart?
We at Legalmart are committed to provide expert level assistance with our professional knowledge and years of experience in Shops and Establishments registration from time to time. Further, we offer to provide following services in case you intend to apply for Shops and Establishment registration-
Collection of Documents and Form Submission
We understand that it is not easy for a business owner or manager to handle every aspect of business perfectly. Further, initiation of business operation and managing it all could be overwhelming for you. Thus, at Legalmart we have an entire team of professionals having years of knowledge and expertise in the field of Shops and Establishment registration, who are ready to guide through the whole process, collect necessary documents, and prepare your application ready to be submitted to the portal in a simple, quick and efficient manner.
End to End assistance from registration to receipt of certificate
Once documents are collected, our professional experts will fill and submit application on the State Labour portal online. Once the form is submitted with all necessary documents and attachments, the registration certificate will be issued after verification within such time as prescribed under State rules.
We also entertain customer queries 24*7 to ensure timely assistance and complete our services efficiently at reasonable prices.