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All You Need to Know About Shop and Establishment Registration

All You Need to Know About Shop and Establishment Registration

This article is about the registration of shop and establishments. Shop and establishment act is a state legislation i.e., each state has its own rules but it has similar provisions. This act is governed by the labour departments of the respective state. It is applicable to all persons employed in an establishment with or without wages, organised or unorganised sector. It regulates all the shops and commercial establishment operating in the particular state. The registration process in each state will have its own process but there will be only slight changes in this process. 

WHO CAN APPLY FOR SHOP AND ESTABLIHSMENT REGISTRATION?

The following can apply for shop and establishment registration:-

Shop means

  • Any premises where a trade or business is conducted or where services are offered to customers, 
  • Including offices, storerooms, godowns, or warehouses, whether in the same premises or elsewhere, utilised for such trade or business. 
  • But does not include a commercial enterprise or a shop adjacent to a factory where the people working there are covered by the Factories Act of 1948[1];

Commercial Establishment means 

  • a commercial/trading/banking/insurance establishment, 
  • a hotel,
  • restaurant,
  • boarding or eating house, 
  • a cafe or refreshment house, 
  • a theatre or any public amusement or entertainment, and 
  • such establishments as the State Government may declare to be a commercial establishment by notification

OBJECTIVE OF SHOP AND ESTABLISHMENT ACT

Shop and establishment act regulates the condition of work and employment. It secures maximum benefits to the employees working in different categories of establishment which is mentioned above.

BENEFITS OF SHOP AND ESTABLISHMENT REGISTRATION

The benefits of shop and establishment registration:- 

  1. Establishes the shop/establishment as a Legal Entity: 

Shop and Establishment License provides a legal identity to the Shops and other commercial establishments. This also provides the shop or establishment the right to conduct their business in that particular area. 

  1. Helps in opening a Business Bank Account: 

Each shop or commercial establishment is required to open a separate bank account for the purposes of daily transactions. Upon registration, these Shops or Establishment receives a license. Hence, the applicant can easily open a current business bank account. 

  1. Lenient inspections: 

Upon registration, the shop or establishment can get over with inspections as soon as possible because it is already registered.

  1. The particular shop or establishment can avail Government Benefits:.

WHEN SHOULD SHOP AND ESTABLISHMENT REGISTRATION BE DONE?

Shops or establishments are required to take compulsory registration under their respective state along with prescribed fees. It should be done within thirty days of commencement of work. Failure to register within the stipulated time can lead to imposing penalties by the concerned authority.  

NOTE: – The commencement date is different for establishment in the following ways:-

  • If the establishments exist on the date on which the Act came into force, then the date of commencement of such establishment is the date on which the Act came into force.
  • If the establishment is new or came after the said act came into force, then the commencement date of such establishment is the date on which the establishment commences its work.

WHAT ARE THE REGULATIONS AFTER SHOP AND ESTABLISHMENT REGISTRATION?

The act regulates the following aspects:-

  • Regulates work hours per day and week;
  • Establishes over-time standards; 
  • Establishes criteria for spread-over, rest intervals, opening and closing hours, closed days, and national and religious holidays;
  • Establishes guidelines for the employment of children, teenagers, and women;
  • Annual leave, maternity leave, sick leave, and other unplanned absences;
  • Employment and termination from service;
  • Keeping track of registers and records, as well as posting notices;
  • Establishes the minimum pay that must be paid;
  • Describes the offences, sanctions, and process.

BASIC DOCUMENTS FOR SHOP AND ESTABLISHMENT REGISTRATION

The basic documents required for shop and establishment registration are as follows:-

  1. Shop or Business Establishment address proof (Electricity bill/tax receipt/purchase deed, etc.)
  2. Photograph proof of shop and establishment
  3. ID proof of the owner.
  4. Copy of PAN Card of the shop or establishment.
  5. Details of the employees.
  6. Payment challan.
  7. Additional business licenses necessary for starting the business, if any. (AOA/MOA)

Note: Registration application and these documents along with the prescribed fees is submitted to complete shop and establishment registration. 

PROCESS FOR SHOP AND ESTABLIHSMENT REGISTRATION

Registration for shop and establishment can be done in two ways. It can be done either online or offline and this differs from state to state. 

ONLINE

For obtaining the registration certificate online, the following steps should be followed:-

Step 1:- Sign up for new user

The applicant should make a new account and log in into the respective state labour official website. 

Step 2:- Fill in the necessary details

For the purposes of registration, the applicant has to fill all the details required by the website.

Step 3:- Upload the necessary documents

After filling the required slots of the forms, the applicant is required to upload the documents online. 

Note: In some states, the registration application and documents needs to be printed and submitted physically.

Step 4: Payment of Fee

After uploading of documents, the applicant has to submit the required fees along with. The fee amount varies from business to business. The payment method differs from state to state. It can be either online payments/cash/DD, etc.

Step 5:- Examination of application

The respective state will scrutinise the documents and verify the documents. The concerned authority might even conduct inspection of the business premises to verify the documents. 

Step 6:- Issue of License

After examination of the application, the concerned authority will approve the application and issue license. The validity of the said license will vary from state to state. For e.g. Karnataka provides validity for a time period of 5 years. 

OFFLINE

Step 1:-

The registration application is to be filled and submitted to the Chief Inspector of the concerned area along with the documents and prescribed fees. The registration application form contains the following details:-

  • name of the employer and establishment, 
  • address of establishment
  • category of the establishment,
  • no. of employees and 
  • Other relevant details. 

Step 2:-

The Chief Inspector will issue the registration certificate to the applicant after verification of the application. 

CONCLUSION

Shop and establishment registration is different for different state and they are governed under the labour departments of the respective state. This process requires 10-15 working days.  It is done through online and has become more flexible for people amidst this pandemic. It is essential to understand the Act of the state the business is established in and this can be understood by visiting the official website of the particular state labour department. Please contact Bizadvisors for further clarifications.

Read our article:Procedure to Get Shop and Establishments Certificate

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