The Buyt Desk
Everyone who runs a business either trading or service should obtain a Shops and Commercial Establishment license from the Labor department in the locality.
Each Indian state has its own Shop and Establishment Act. Still in all states, the common provisions of the Act are the same. The Labor Department of every state regulates the Shop and Establishment Act. The Act governs all the shops and commercial establishments functioning within the respective state. As each state issues the registrations under the Act, it differs to some extent in each state.
Define Shops
As per the Act, Shops are the locations or properties where services are delivered to customers or where the selling of goods happens either by retail or wholesale. Shops include any property used in association with the trade or business like godowns, offices, storerooms and warehouses.
Define Commercial Establishments
As per the Act, Commercial establishments are banking, insurance, trading or commercial establishment or administrative service in which there is employment for office work. Commercial Establishments include boarding, hotel, lodging, restaurant, eating houses, theatres, cafés and any other amusement or public entertainment places.
Factories are regulated by The Factory Act, 1948 and industries by the Industries (Development and Regulation) Act 1951, thus not included in Shop and Establishment Act
What is the Shop and Establishment Act?
The Shop and Establishment Act governs the state of work and assigns the right of employees in an organization. This Act is not just for the commercial establishment but also valid for charitable trust, societies, educational institutes and any institute which runs on the objective of making profits. It offers the obligation of an employment provider too.
Who should apply?
In India, anyone owning a shop or any other commercial establishment must obtain a Shop and Establishment License. The application for the same should be made within 30 days of commencing the business. Business owners/partners must apply for the license for their shop or establishment by filing an application to the Chief Inspector in their respective state. The application form can be obtained online or at the registered office in your area. It contains the name of the establishment, address of the establishment, the category of the establishment, the name of the employer, the number of employees and other needed details as desired by the state.
Shop and Establishment Act in India
In India, the Department of Labor has the authority over the Shop and Establishment Act. The department oversees and governs all establishments that are doing trade, business or profession. The act closely monitors commercial establishments in the state including the working of the printing firms, societies, educational institutions, and institutes that undertake insurance, banking, stock and share brokerage. As each state follows their own operation, the act may differ from state to state. The following are specific aspects (in all states) of the Shop and Establishment Act –
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Cleanliness
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Lighting and ventilation
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Precautions against fire
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Accidents
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Prohibition of employment of children
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Employment of young person or women
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Wages for holidays
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Time and conditions of salary payment
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Deductions from wages
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Opening and closing hours
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Close days
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Weekly holidays
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Hours of work
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Break for rest and meals
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Leave policy
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Dismissal
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Record keeping
What data is needed for Shop and Establishment License Registration?
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Name of firm
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Address of Firm
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Nature of Establishment / Business
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Name of Manager/Managing Partner/Owner
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Number of Employees in the Establishment
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Day or days of Holiday
What documents are needed for Shop and Commercial Establishment Registration?
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Identity Proof of Owner/ Manager/Managing partner – Aadhar Card / Voter Id / Driving License / PAN
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Photo of Owner/ Manager/Managing partner
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Address Proof for where business is running – Rent Agreement, if Rented or Property papers if owned
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Proof for business nature – Partnership deed/ Proprietary documents
