Shop and Establishment License
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Overview Shop and Establishment License
These day, in India, most businesses, such as shops, restaurants, cafes, food shops, etc., are regulated and governed by the provisions of the Shop and Establishment Act and are therefore legally required to obtain a Shop and Establishment License. However, it is appropriate to take into account that it is governed by the State Act and that the rules and regulations vary from one State to another. Furthermore, the objective of this Act is to provide workers with proper and adequate working conditions and also to take care of their wages, holidays and many basic rights.
What’s the Shop and Establishment License?
A Shop Establishment Certificate is required when an entity or business starts employing people as full-time employees, casual workers, contract-based workers, etc., to regulate and manage working conditions and also to ensure that their rights are protected. In addition, it is also known as an informal Shop License.
Thus, the phrase “Shop and Establishment License” refers to a Certificate or License issued to businesses, professions and businesses registered under the provisions of the Shop and Establishment Act. It should also be noted that all the rules and regulations of this Act are governed and administered by the Department of Labor.
Furthermore, this Department not only regulates the commercial establishments but also keeps an eye on the working of the charitable trusts, educational institutions, societies,and other premises like the insurance companies, banking, stock exchanges, share brokerages, etc.
What is a Shop and Establishment Registration?
The Shop Establishment Registration is a registration based on State Shop and Establishment Act. The same is needed while starting a shop, hotel, eateries, or any other commercial place. Further, obtaining registration under the Shops and Establishment Act is necessary for every new shop or establishment.
Furthermore, one is required to obtain this license within a period of 30 days starting from the day of commencement of work. Lastly, the validity of a Shop Establishment License is for one year, and the same can be renewed every year. However, the rules and regulations concerning renewal vary from one state to another state.
What are the objectives set out in the Shop and Establishment Act?
The following are the objectives annexed to the Shop and Establishment Act License:
(a) The main objective of the Shop and Establishment Registration is to protect rights and to provide benefits for employees working in the organized sector, such as hotels, establishments and restaurants, along with those working in unorganized sectors.
- b) In addition, the aim of the Shop and Establishment Registration is to regulate and administer the day-to-day treatment of employees and also to establish better employment standards.
Why is it Mandatory to obtain Shop and Establishment Registration in India?
Usually, for opening a current bank account in the name of the proposed business with the bank, people obtain registration under the Shop and Establishment Act.
Moreover, besides opening a bank account, it is more significant to have this license, or else the inspector inspecting the business premises may cause unnecessary problems for the said businessman.
What are the Advantages of the Shop and Establishment License?
The advantages or benefits of the Shop and Establishment Registration is mentioned below:
- Shop License provides Legal Acknowledgment to the particularshop or establishment.
- It acts as an essentialRegistrationfor further registrations.
- This license acts as a business proof. Hence, it helps in obtaining additional registrations in India.
- Further, shops cannot open a bank account without a Shop and Establishment License. Hence a Shop and Establishment License is mandatory for opening a bank account in the name of shop or establishment.
- Shop License helps in raising investments by way ofVenture Capitals or Loans for the proposed business establishment.
Who are all Eligible to obtain Shop and Establishment Registration in India?
The establishments that are required to obtain Shop and Establishment License are as follows:
- Wholesalers or the Retailers’ shops and establishments.
- Service Centres.
- Store-rooms, Warehouses, and Godowns.
- Also, any other working places.
- Restaurants and Eateries.
- Theatres, Amusement Parks, Entertainment, etc.
How to Ascertain Whether YouNeed to obtain a Shop and Establishment License or not?
The steps to ascertain whether an individual is required to obtain Shop and Establishment Registration or not is enumerated below:
- The first and foremost step is to check and understand if the proposed business, which an individual is going to establish, is covered under the ambit of the term “shop” and “commercial establishment” defined under the Shop and Establishments Act.
- If in case the same is covered, then he or she is required to abide by the norms and regulations prescribed by the Act for the treatment of their employees.
- However, it shall be taken into consideration that the exclusions to the Act may vary from one state to another state.
- Now, check the particular state list of the Shop and Establishment Act, as every state has provided a list of the Shop and Establishments to be covered under the provisions of the Act. Further, such establishments are needed to run their business by adhering to the rules and regulations prescribedunder the Shop and Establishment Act
- After thatthe concerned individual is required to file for the online registration under the said Act, within a period of 30 days starting fromthe date of commencement of the establishment.
What are the Key Aspects Governed by the Shop and establishment act?
There are various provisions prescribed by the Shop and Establishment Act,which regulate the key or critical aspects concerning the working of establishments and shops in India.
The key aspects that areregulated by the Shop and Establishment Act are:
- Maximum Working Hours for the labours and employees.
- Permissible time durations for having meals and rest.
- Regulating Laws to forbidChild Labour in Factories.
- Women Employment.
- Number of compulsory weekly holidays offered to the employees.
- Close or off days of the said establishments and shops.
- Opening and Closing time of the establishments or shops.
- Wages given to Employees for the Holidays.
- Accidents Coverage Policies.
- Preventive Measures against Fire.
- Proper Lighting and Ventilation for workers.
- Clean,hygienic, and sterilepremises for the workers.
- Conditions, provisions and timing for the payment calculation.
- Regulationsregardingthe payment deductions.
- Leave Policy.
- Proper maintenance of records containing employee details.
Note – More information concerning to the Shop and Establishment Act can be collected from the relative state government portal.
What are the Prerequisites for obtaining Shop and Establishment Registration?
The prerequisites for obtaining a shop & establishment license are as follows:
- Name of both Employer and Manager.
- Postal Address of the said Establishment.
- Name of the Establishment.
- Category of Establishment such as the restaurant, amusement park, hotel, etc.
- The number of employees working.
What is the Procedure for Obtaining Shop and Establishment Registration?
The Procedure for obtaining a Shop and Establishment License is discussed below:
- Download the Application Form – First and foremost step is to download the application form for the registration from the official website of the respective state in which the said shop or establishment is located.
- Fill in all the Required Details–In the next step, the owner of the business is required to fill all the necessary details asked. The term necessary details include the following listed :
- Name of the Proposed Shop and Establishment
- Name and Details of the concerned employer
- Name and Details of al the Employees working at that time
- Address proof of the Registered Establishment together with the NOC (No-Objection Certificate) or the Rent Agreement, only in the case where the place is rented premises.
- PAN card details of the concerned employer.
- Submit the Application Form – Once the owner or the employer have fillsall the required details accurately, then in the next step he or she needs to submit the said application formeither to the Inspector in-charge or the Chief Inspector of the Shop and Establishment Act together with prescribed amount as fees.
- Verification of the Application Submitted – After the submission, the application along with all the documents submitted will be verified and checked by the higher authorities.
- Issuance of License – If in case,all the documents submitted along with the applications arein accordance to the requirements of the said act, then a certificate of registration shall be issued to the proposed shop or establishment.
Notes –However, the process of obtaining registration might take around 15 to 20 working days in the major city areas. However, the same may vary from one state to another.
What are the Key Points to be Considered while Obtaining a Shop and Establishment License?
The things that must be taken into consideration while applying for the Shop and Establishment Registration are as follows:
- The Inspector appointed can visit the registered premises for verification.
- The Owner of the business is required to display the certificate of the Shop and Establishment Registration at a placeeasily accessiblein the particular premises.
- The License issued mustbe timely renewed prior to its expiry date.
- If in case the owner wants to close his establishment, then he needs to notify the inspector in writing about the closure within 15 days of the closing.
- Despite the Shop and Establishment License, the owner of the proposed business is also required to obtain prior approval from the respective state Department of Labour for the commencement of the business activities in that state.
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