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Shop and Establishment
Overview of the Shop and Establishment Act
The Act applies to shops, commercial establishments, hotels, restaurants, theatres, and other workplaces that are not covered under the Factories Act. Each state in India has its own version of the Act, such as the Delhi Shops and Establishments Act, 1954, which governs businesses in Delhi.
Shop and Establishement
Key Features.
- Registration Requirement
- Every shop or establishment must register within 30 days of starting operations.
- Businesses must obtain a Shop and Establishment Registration Certificate, which serves as legal proof of business existence.
- Working Hours & Rest Periods
- Defines maximum daily and weekly working hours.
- Provides mandatory breaks and overtime wages.
- Employee Welfare
- Covers paid leave policies, sick leave, and maternity benefits.
- Regulates employment of women and young workers.
- Safety & Health Regulations
- Ensures a safe working environment with proper sanitation and hygiene.
- Mandates workplace conditions, including ventilation and lighting.
- Termination & Closure Guidelines
- Sets rules for terminating employees and closing establishments.
- Requires businesses to notify authorities before closing operations.
Shop and Establishment
Registration Process
- Determine Applicability: If your business qualifies as a shop or establishment, registration is mandatory.
- Prepare Necessary Documents:
- Business PAN & Aadhaar Card.
- Rental Agreement or Ownership Proof.
- Employee Details & Salary Slips (if applicable).
- Trade License (if required by the local authority).
- Apply Online or Offline:
- Online: Register through the respective state’s Labour Department Portal.
- Offline: Submit forms at the local Labour Office.
- Approval & Certification:
- After verification, a Shop and Establishment Registration Certificate is issued.
Why Shop and Establishment Registration Is Important
- Businesses must renew the licence as per state-specific rules.
- Non-compliance can lead to penalties and fines.
- Regular inspections ensure compliance with the Act.
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Documents Required
These Documents are required for Shop and Establishment Registration
- Photograph of the Shop or Establishment at the entrance with Name Board in local language
- Certificate of Incorporation, MOA & AOA of Company / LLP Agreement of the Company or LLP
- Copy of PAN card
- List of Directors or Partners and their ID & Address proof
- Copy of Board Resolution or Partners Consent
- Address proof of Company/LLP/Partnership/Proprietorship
- Details of all the employees if any.
Frequently Asked Question
What is the objectives of Shop and Establishment act ?
Every Indian state has enacted certain rules and regulations with regard to conditions of work. The objective is to secure uniform benefits for employees working in different establishments, from shops, commercial establishments and residential hotels to restaurants, theatres and other places of public amusement or entertainment.
What is mean by Shop and Establishment Act Registration?
“Establishment” means a shop, commercial establishment, residential hotel, restaurant, eating house, theatre, or other place of public amusement or entertainment to which this Act applies and includes such other establishment as the [State] Government may, by notification in the Official Gazette, declare to be an establishment for the purposes of this Act.
Whom Shop and Establishment Act is applicable?
Shops Act Application is mandatory in some cases for businesses, as long as they qualify as an “Establishment” under the Shops and Establishment Act.
So if you run a business in Maharashtra, you need to obtain Shop Act License under Bombay Shops and Establishments Act, 2018.
What types of premises are governed by the shop act?
Broadly speaking the premises governed by the Act are shops, commercial establishments, residential hotels, clubs, restaurants, eating at houses, theatres and other places of public amusement or entertainment.
Is there a single law for entire country?
No, unfortunately.
There are different laws for different regions in the country. So in addition to the Bombay Shops and Establishments Act, 2018 which we looked at earlier, there is the Delhi Shops and Establishments Act, 1954 and the Karnataka Shops and Establishments Act, 1961 among many, many others.
So before you register, you need to check the applicable law which affects you. In some cases, a single law may apply across States. Many laws created for the erstwhile State of Bombay apply to Gujarat and the Union Territories nearby. While some states like Manipur have their own Shops and Establishments Acts, some Northeast Indian states share a single law for Shops and Establishments Registration.
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