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Shop & Establishment License

In India, most of the businesses such as restaurants, shops, cafes, and so on are operated and controlled as per the provisions of the Shop and Establishment Act. Shop and Establishment Act Registration License works on the purpose to secure the stationary benefits for the employees, who are working under businesses like shops, commercial establishments such as residential hotels, theatres and restaurants.

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Overview
Benefits
Required Documents
Registration Process
FAQ

Overview of Shop and Establishment License

A Shop and Establishment License is mandatory while establishing a shop, hotel, theatre, public amusement, or any commercial place. Documents required for the Incorporation Certificate, registration under Shop and Establishment Act. ·The licenses are important for shop and establishment registration.

Most of the business operations in India such as shops, restaurants, cafes, and so on are regulated as per the provisions of the Shop act license. However, the rules and regulations may be different from state to state, the aim of this act is to provide a proper working environment and conditions to the workers and taking care of their wages, rights and holidays.

Go through the step by step guide to obtain shop and establishment license along with its importance, features, and compliances.

Shop and Establishment License Act
The Shop and Establishment License is a formal certificate granted to the business, trade, which are registered as per the Shop and Establishment Act. All the rules and regulations of the Act are regulated and managed by the Department of Labor. Apart from regulating the commercial establishments, the shop act licence also keeps a check on the working of charitable trusts, educational institutes, and societies and other entities for example banking, insurance companies, stock exchanges, share brokerages and so on.
Both unorganized and organized business sectors are regulated and managed under this act which makes sure suitable working conditions are provided to the workers. The rules and regulations of this Act vary from one state to another but the primary aim remains the same. Hence, the establishment or business sector that has to receive this license has to submit an online application on its state official portal.

Benefits of getting Shop and Establishment License

This basic license helps the establishments in further legal registrations

Acts as a business proof while applying for further legal registrations in India

The registration is mandatory for many business-related operations like opening a bank account in the name of shop and establishment

Helps to raise investments or loans or venture capitals for establishment or shop

Provides official or legal recognition to that particular establishment or business or shop

Who should obtain a Shop and Establishment License in India?

Service Centers

Hotels, eateries and food restaurants

The Retailers or Wholesalers

Additionally, any other working places

Store-rooms, Warehouses, and Godowns owners

Amusement parks, Entertainment houses, Theaters, and so on.

Documents for obtaining the Shop and Establishment License

  • Any government-approved Id proof of the applicant
  • Passport size photographs of the applicant
  • A photo of the shop or establishment along with the applicant or owner
  • A copy of the rental agreement if the establishment is rented property,
  • Any utility bill of the working or establishment premises

Other documents needed as per the business entity or establishment

  • If it is a trust, a list of number of trustees
  • ROC
  • Memorandum of Association of the establishment
  • If it is a co-operative society, a complete list of the members and chairman are required
  • Address Proof of the applicant
  • Partnership deed with all needed requirements such as name, company name, and signature of the respective partner and share of each partner of the entity
  • RBI permission copy
  • A resolution regarding the beginning of the business of society
  • Certificate of incorporation under the Companies Act
  • Certificate of registration granted by the charity commissioner
  • list of designated directors and their nominations
  • Permission copy from RTO Transportation
  • Food and drug license
  • FSSAI license
  • A copy of the permission from the Collector
  • NOC from the police department for a Cybercafe
  • IEC certificate
  • A certificate granted to the share broker by SEBI
  • NOC issued by the municipal corporation for starting a masala and flour mill
  • Excise license for starting a restaurant, beer bar or wine shop
  • The license granted by the police department for commencing security services

What are the objectives behind the Shop and Establishment License in India?

  • The chief objective behind the registration is to safeguard the rights and provide benefits to the employees working in organized sector such as establishments, hotels, and restaurants as well as in the unorganized sectors.
  • Additionally, it regulates the wages, holidays, incentives, etc. to set better standards for the working conditions of the employees.
Registration procedure to obtain Shop and Establishment License
  • The first step is to download the application from the official website of the respective state in which location your shop or establishment is going to commence
  • Fill all the required details such as Name of the establishment, Name and details of the applicant, the details about the employees, Registered business premises address with NOC or rent agreement if the premises is rented premises, PAN details of the applicant.
  • After filling all the details, submit the application to the chief inspector who is in charge of the shop establishment license with fees amount as specified.
  • After submission, the details filled in the application and all the documents would be verified by the concerned higher authorities.
  • If all the details and the documents submitted are satisfied as per the requirements of the act, the Shop and Establishment License certificate shall be issued to the establishment or shop or entity.
  • And, it takes around 15-20 working days to complete the whole process. However, it may vary from state to state.

Frequently Asked Questions

It is mandatory for all shops and establishments to register under this Act, that too within 1 month or 30 days of the beginning of work. As it acts as a basic license and it is needed for all further operations like opening a bank account on the name of the establishment..

 

  • Any deduction from salary
  • A register containing all details of employment
  • Salary details
  • Advances details
  • Any fine applied
  • Holidays awarded to the workers

Yes, as per the Shop and Establishment Act, every establishment or business has to take approval from the Department of Labor before starting the business.

Documents related to yearly holidays and number of workers need to be submitted to the Municipal Corporation office annually.

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