The Shop and Establishments Act is made to regulate all the shops and commercial establishments in the respective State. The main purpose of the Shop and Establishments Act is to regulate the hours of work, wages and salary of the employees and workers, terms of service, the work environment in the shops and commercial establishments. It applies to all the shops and commercial establishments in a state. All the business centers, warehouses, restaurants, hotels, theatres, etc., come under the ambit of this Act. On top of these establishments, the Act also covers societies; educational institutions run for profits and charitable trusts, etc. In this article, we will focus on the procedure to obtain a Shop and Establishments Certificate.
Scope of Shop and Establishments Act
Following are the key aspects covered under the Act:
- Lunch breaks and other intervals for rest
- Weekly holidays
- National and regional holidays
- Pay scale
- Hygiene in the premise of the commercial establishments
- Paid holidays
- Leave policy
- Ventilation and protection against fire
- Work accidents
- Record book
- Opening and closing hours of the shops and commercial establishments
- Protection against child labor
- Protection to youth and women
- Hours of work
Shop and Establishments Act Registration
Every shop and commercial establishment is required to get shop and establishment license under the Shop and Establishments Act. Such registration serves as legal proof of the business’s existence, especially in the case of small businesses. The registration is compulsory for every shop and commercial establishment in the State except those coming under the Factories Act,1948.
The document requirements may differ according to the State’s rules. But, the following are the necessary documents in almost every State in India:
- Copy of PAN card.
- List of directors or partners of the business
- Identity proof of the directors or partners of the business( Aadhar Card/ Driving license etc.)
- Residential Proof of all the directors or partners of the business
- Proof of address of the company or establishment( rent agreement, electricity bills etc.)
- Certificate of incorporation of the business
- Memorandum of Association or Articles of Association of the Company
- Photograph of the Shop or commercial establishments
- List of all the employees with details( if any)
- Copy of the Boards resolution or partner’s consent
In addition to all the documents mentioned above, the registering authority may ask for more information regarding the shop or commercial establishment. In such cases, such information shall be provided to such authority.
Every State has different rules of registration of the shops and establishments. But generally, the following steps are followed for registration:
Step 1: Check the applicability of the licenses.
Step 2: Within 30 days of the commencement of the shop or commercial establishments, the employer or the owner should submit an application of registration to the Inspector in charge.
Step 3: Arrangement of all the necessary documents.
Step 4: The submitted application should be in an agreed form along with the fees prescribed by the State in which the business is to be registered.
Step 5: Upon submission, the inspector-in-charge will investigate the application.
Step 6: Upon satisfaction, the registration will be approved by the Inspector-in-charge.
Step 7: A registration certificate will be given to the applicant.
Step 8: Such certificate shall be displayed at the premise of the business, and the license should be renewed as per state law.
Change in the Details of the Shops and Commercial establishments
- In case of any change in the details of a registered business, the owner shall apply for amendment in the registration certificate with the concerned authority within the prescribed time. Upon satisfaction of the authorities, such an amendment is approved and a fresh registration certificate for the concerned business.
- In case the business is shutting down, the owner shall apply for surrender of the registration certificate. Upon satisfaction, the concerned authority will issue a direction for the cancellation of the registration.
Advantages of the Shop and Establishments Act Certificate
There are various benefits, which can be availed by the shops and commercial establishments upon registration. Following are some of the benefits of registration:
- Proof of existence: The registration certificate acts as Proof of the existence of the business. It gives the business a separate legal entity, which is beneficial, especially for small-scale and unorganized businesses.
- Various Benefits by Government: The Shops and Establishments registration certificate can help a small business easily avail the benefits offered by the State government. Each State has a separate department for policymaking with respect to small businesses, and with the certificate, such benefits can be easily availed.
- Smooth inspection: Having a registration certificate makes the inspection process a whole lot easier. The process conducted to inspect the proper functioning of shops and commercial establishments becomes shorter with the registration certificates.
- One-time cost for businesses: It means that they do not need to incur compliance costs if a shop or a commercial establishment is successfully registered.
- Helps with the business bank accounts: Every shop and commercial establishment must open a separate bank account for their day-to-day transactions. To open such an account, one of the requirements is the registration certificate of the Shop establishment. A registered shop or commercial establishment can easily have a business bank account.
The Shops and Establishments Act is a very significant act for all the commercial establishments in India. Obtaining a Shop and Establishments Certificate is mandatory for them. The rules and regulations set by the Act must be duly followed by every shop and commercial establishment in the State. It regulates almost every aspect of the shops and establishments. The rules and regulations might differ according to the State. However, the basic things remain the same for every state.
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