Background: The Shop and Establishment Act in India was implemented to govern the rights and working conditions of workers that are employed in shops and commercial establishments. In their previous article, Vakilsearch shared a guide to filing a provisional patent specification in India. In this article they shed light on the provisions of the Shop and Establishment Act, its registration process and benefits.

The Shop and establishment Act requires all commercial establishments like theatres, eateries, hotels, amusement parks, shops, retail/trade business, etc. to apply for the license and registration within 30 days of commencing the business.

When a business entity starts employing people as contract-based or full-time employees, casual workers, etc. then they need to register for the shop and establishment license within 30 days of starting a business.

The Act requires employers to declare the following:

•     Working hours
•     Rest interval of employees
•     Opening and closing hours
•     Health and safety measures
•     Wages for overtime work
•     National and religious holidays
  
  

When do you need a shop and establishment license?

When a business entity starts employing people as contract-based or full-time employees, casual workers, etc. then they need to register for the shop and establishment license within 30 days of starting a business to enforce proper regulations for workers’ rights and work conditions.

The commercial establishment as defined in the Act include:

•     Commercial sector establishments like trading, insurance, or banking organisation
•     Establishments where people are employed to provide service or do office work
•     Refreshments house, small cafe, boarding houses, eateries, hotels, etc.
•     Entertainment and amusement establishments like cinema halls, theatres, amusement parks, etc.
  
  

How to apply for shop and establishment registration?

The Shop and Establishment Act requires every business to approach the Department of Labour for the approval, although the rules and regulations vary from state to state.

The shop and establishment registration is a state-based registration for which rules vary according to the state.

You will need the following documents to apply for the license:

•     Applicant’s passport size photograph
•     Photo the establishment along with the owner/manager
•     List of directors and management employees, if applicable
•     Details related to the company, employees, salaries
•     Establishment’s address proof
•     Affidavit
  
  

You will also need to submit the following information:

•     Manager and employer’s name
•     Establishment’s postal address
•     Establishment’s name
•     Category of establishment
•     Number of employees
  
  

You can apply for shop and establishment registration online through the state government’s website. The application in the format prescribed on the website needs to be submitted with the above-mentioned details along with the prescribed fee. Once the application is received by the Department of Labour, an inspector will visit your establishment to check the details and will provide the registration certificate/license in accordance with the Act.

Shop and establishment registration: Advantages

The owner of the establishment may benefit from the registration in the following ways:

•     The license will help the owner in getting a current account with the bank
•     The owner will be at ease in case of unexpected visits by the inspector from the State
•     The registration can be renewed easily online with minimal fee without the hustle
•     Online registration is an easy and quick process
  
  

The owners of such establishments can also contact Vakilsearch as we offer legal counsel through legal experts and advocates and can help you get the registration within no time and without much effort.

Also read: Equal Remuneration Act, 1976: Rules & regulations

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