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Shop & Establishment Registration

The shop and Establishment Act in India is one of the most important regulations under which all businesses fall and is strictly regulated by the Department of Labor. This is enacted as per the state’s policy towards its own rules and regulations for businesses.

Shop & Establishment registration is mandatory for every person who is starting any business or shop under the respective state.Shop & Establishment Registration is mandatory for every person who is starting any business or shop under the respective state act.

For any new business or shop, we need to obtain Shop & Establishment registration within 30 days of commencing operations under the respective state act.  The application will submit to the local municipality of the concerned state.

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It helps in regulating the following elements:

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

The law does not just regulate businesses but also societies, charitable trusts, printing establishments, educational institutions etc.

Key Benefits Of Shop Establishment Registration

The significance of an obtaining Shop Establishment Certificate can never be ignored as it emphasizes on the following aspects:

  • Regulation of working hours.
  • Prevention of child labour
  • Separate regulations regarding employment of female staff.
  • Proper guidelines for record-keeping     
  • Fixed opening and closing time
  • Intervals for rest & lunch
  • Rules regarding Weekly-offs, working condition and wages
  • Important measures such as hygiene & sanitation, lighting and ventilation, safety precautions and hazard management

It helps in regulating the following elements:

Frequently Asked Questions​

The Shops & Establishments Act varies from State to State, and are rooted in the Central Shops & Establishments Bill which was promulgated by the Ministry of Labour as a model guidelines on which States could build their own acts. The Act is an attempt at consolidation of uniform benefits accruing from employment and service, be it in a shop, commercial establishments, hotels, restaurants, etc.

The Act addresses a multitude of employee-employer relationships, most notably the conditions of work that an employee must work with. The Act regulates the employment terms, such as working hours&spread over of such working hours. It requires that employees be given at least a day off from work, and calls for employers to pay rates above the employment rate for overtime. It also contains special provisions prohibiting the retention of women employees late at night, as well as provisions forbidding the employment of children.

While requirements vary from state to state, every business must maintain records of the following details –

  • Details of Employment
  • Details of Salary payments (including any deductions/advances/bonuses etc)
  • Details of Holidays (days off) declared by the business

In some States, the records relating to annual holidays of a business, as well the details of its employees must be regularly updated with the office of the Municipal Corporation every year.

Every shop and establishment must register itself under the Act within 30 days of commencement of work

Establishments are generally defined by this Act as commercial establishments, residential hotels, restaurants, eating houses, theaters, or other places of public amusement or entertainment.  Additionally, State Governments may, by notification in the Official Gazette, declare other establishments that do not fall within such definition to be establishments for the purposes of this Act.

A shop is defined as any premises where –

  • Goods are sold (either through retail sales or by wholesale to retailers);
  • Services are rendered to customers for consideration.

This definition also extends to include offices, storerooms, godowns, warehouses or other ancillary locations which are utilized in consonance with the shop for trade/business. However, factories & other commercial establishments do not fall within this definition.

Fees for the issuance of such license vary from State to State. Leave this part of the research on us by signing up for service!

The penalties for not getting a license to vary from State to State. Additionally, since a Shop & Establishment license is one of the first certifications for commercial activities, they are often used as requisite documents for current accounts in Banks. Thus, not getting a license not only brings with it legislative sanction but also causes problems in day to day operations.

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