In each state, the Shop and Establishment Act (“Act”) is different. However, the general provisions of the Act are the same for every state. Shop and Establishment Acts are regulated by the respective states’ Labour Departments. The Act regulates all shops and commercial establishments operating within the state. Registrations are issued by the respective states under the Act, and therefore vary slightly from one state to another.
Shops are generally defined under the Act as buildings or premises used in connection with a trade or business to sell goods or render services to customers. This includes offices, godowns, warehouses, and storerooms.
Establishments that provide commercial, banking, trading, insurance or administrative services employ people for office work are usually considered commercial establishments. Hotel rooms, boarding houses, restaurants, cafes, theatres, and other places of public entertainment or amusement are included. The Act does not apply to factories and industries, which are regulated by the Factories Act, 1948 and Industries (Development and Regulation) Act, 1951, respectively.
A shop or establishment must be registered under the Shop and Establishment Act
In order to be registered under the Act, shops and commercial establishments must meet the requirements of the state. The Shop and Establishment Registration Certificate or Shop License (“Certificate”) must be obtained by all establishments and businesses, including those who operate a business from home.
The proprietors of businesses that operate from home without having any physical store or premises are also required to obtain this Certificate. This Act requires the proprietors of e-commerce businesses, online businesses, online stores, and establishments to register and obtain a certificate. Within 30 days of commencing business, all shops and commercial establishments must register themselves under the Act.
The Certificate or Shop License serves as the business’ basic registration/license. These certificates are required to obtain many other business licenses and registrations. They serve as proof of the incorporation of a commercial establishment or shop. The Certificate is also useful if the proprietor of the business wishes to apply for a loan or open a current account. Most banks require this Certificate in order to open a current account.
Regulatory Framework for Shops and Establishments
As part of the Act, the following matters are regulated:
- Weekly holidays, work hours, and annual leave.
- Compensation and wages are paid.
- Children should not be employed.
- Night shift employment of women and young people is prohibited.
- Inspections and enforcement.
- A period of rest.
- Hours of operation.
- Employers are responsible for keeping records.
- Provisions for dismissal.
Registration Process for Shops and Establishments
Shop and Establishment Registration Certificates can be obtained online or offline, depending on the state.
It is necessary to log into the website of the State Labour Department in order to obtain the registration certificate online. For registration under the Shop and Establishment Act, the proprietor or owner must complete the application form, upload the required documents, and pay the prescribed fees. Each state imposes a different fee. Business owners or proprietors will receive the registration certificate online once the registration form is approved.
It is necessary to fill out and submit the registration application with the prescribed fees to the Chief Inspector of the concerned area in order to obtain the registration certificate offline. Once the Chief Inspector is satisfied with the accuracy of the application, he or she will issue the registration certificate to the owner or proprietor.
Among the information contained in the registration application form are the name of the employer and establishment, the address and category of the establishment, the number of employees, and any other relevant information. Shop and Establishment Certificates need to be renewed before the expiration date. The validity of the certificates varies from state to state. In some states, certificates are valid for life, while in others, they are valid for one to five years.
Registration of shops and establishments requires the following documents
In order to obtain a certificate of registration for a shop or establishment, you will need the following documents:
- Proof of the address of the shop or business establishment.
- Proof of ownership of the business.
- It is necessary for the proprietor to have his or her PAN card.
- Employee details.
- Challan for making payments.
- Licensing requirements for starting the business, if any.
Frequently Asked Questions
Do state and federal government establishments have to comply with the Shop and Establishment Act?
There is no requirement to obtain the Shop and Establishment Act registration for establishments of the central or state governments. All provisions of the Act do not apply to them.
Shop and Establishment Act registration is required for which entities?
Shops and establishments must register under the Shop and Establishment Act:
- Shops that sell retail and wholesale
- Service locations, including offices, where customers receive services
- Business or trade-related workplace
- Entertainment or amusement place for the public
- Establishment of commerce
- Storerooms, warehouses, and godowns
- Eating establishments or restaurants
- Hotel for residential use
Do all states/UTs in India have the Shop and Establishment Act?
In general, the Shop and Establishment Act applies to all states. However, each state/UT has a separate act to govern entities within its borders. However, the general provisions of each state’s act are the same.
Does the Shop and Establishment Act require factory owners to register?
Due to the fact that factory owners fall under a different Act rather than the Shop and Establishment Act, they are not required to register under that Act.
When registering under the Shop and Registration Act, what information should be provided?
Here are the details included on the Shop and Establishment Act Certificate registration form:
- Address and name of the establishment
- Employer’s full name
- Establishment type
- The nature of the business
- Managing director’s name
- Commencement date of the establishment
- Details about the employee