Shop and Establishment Act Registration

In India, the Shop and Establishment Act was introduced to monitor/regulate work conditions & to protect the employees’ rights in the unorganised sector of employment under the Indian Labour Law. The Shop and Establishment Act Registration is compulsory for all types of food businesses in India, be it a food truck or a fine dining restaurant.

Generally, shops are defined under the Shop and Establishment Act as the premises where the products selling take place either by retail or wholesale or where services are provided to customers. It comprises offices, storerooms, warehouses & godowns used in association with the trade or business.

Commercial establishments under the Act are defined as a commercial, trading, banking, or insurance establishment or administrative services in which individuals are employed for office work. It comprises a hotel, eating house, theatre, restaurant, café, or other public entertainment or amusement places. However, industries & factories are not covered by the Shop and Establishment Act & are regulated by the Factories Act, 1948 and Industries (Development & Regulation) Act, 1951.

The Shop and Establishment Act Registration Certificate or License acts as a Basic Registration or Licence for the business. The Shop and Establishment Act Registration Certificate is produced for getting many other business Licences & Registrations. It serves as incorporation proof of commercial shops or establishments. It is useful when the business owner wants to get a loan or open a current bank account for the business. Most banks will ask for the Shop and Establishment Act Registration Certificate for opening a current bank account.

What are the various regulations under the Shop and Establishment Act?

Following are the regulations under the Shop and Establishment Act:

• Inspection & Enforcement
• Record keeping by the employers
• Prohibition of employment of children
• Dismissal Provisions
• Working hours, annual leave, weekly holidays
• Interval for rest
• Prohibition of employing women & young individuals in the night shift
• Payment of wages & compensation
• Opening & closing hours

Importance of Shop and Establishment Act License

Following are the importance of Shop and Establishment Act License:

• To stop child labour
• To convert unorganised sector into organised
• To impose rules based on local culture & empower states
• To regulate employees’ wages
• Maintain a healthy working environment

Which entities have to register under the Shop and Establishment Act?

Following is the list of entities that can apply for Shop and Establishment Act Registration:

• Wholesale and Retail Shops
• Restaurant or eating house
• Residential hotels
• Warehouse, godown, or storeroom
• Theatre or amusement or place of public entertainment
• Workhouse or workplace used for trade/business
• Premises where services are provided to customers including offices
• Commercial establishment

Advantages of Shop and Establishment Act Registration

Following is the list of benefits that you can avail after getting Shop and Establishment Act Registration:

• Provides Legal Protection: This Licence provides legal protection to the business and its employees. It also ensures that the business is following all the labour laws and regulations, and protects employees from exploitation & unfair treatment.
• Avoid unethical business practice: Child labour is very common in the unorganized sector. Despite a law prohibiting such activities, adolescents can be found working in a number of industries for extremely low rates from a café to a fabrication industry. The Shop & Establishment Act includes some strong anti-child labour regulations.
• Business Expansion: Essentially, an owner of the business who devotes 100% to the Shop Act’s requirements will be able to enjoy unanticipated rewards in the long term. The Shop and Establishment Act gives an entity or a company a legal status, allowing the business owner to have better exposure to a neglected part of the market over time.
• Avail Government Schemes and Subsidies: Many Government subsidies & schemes are available only to businesses that have a valid Shop & Establishment License. Businesses that have Shop & Establishment Act License can take benefit of these subsidies & schemes to lessen their operating costs & grow their business.
• Ease of opening Current bank account of the business: As per RBI regulations, every business must have a separate business account to manage its money. Under the Act, only a Shop and Establishment Act Registration Certificate can be used to create this business account.

Documents Required for Shop and Establishment Act Registration

Following is the list of documents required:

• Identity proof of the Proprietor
• PAN Card of the Proprietor
• Address proof of the shop or business establishment
• Employees’ details
• Payment challan
• Additional business licences vital for commencing the business