Shop and Establishment Registration

All states have their own Shop and Establishment Acts but adhere to the same general provisions. State Labour Departments regulate Shop Act. According to this shop act registration, licenses are issued by the respective states. Therefore they differ slightly from state to state. The shop and establishment registration Act regulates all shops and commercial establishments within the state.

As defined by the Shop and Establishment Act, a shop is where goods are sold or provided, whether retail or wholesale or where services are rendered. Commercial establishments generally employ people for office work, such as commercial, financial, trading, or insurance companies. Offices, godowns, storerooms, and warehouses are examples of commercial establishments. The term includes hotels, boarding houses, restaurants, cafes, theatres, and other public entertainment venues. However, factories and industries are not covered by this shop act registration. They are governed by the Factories Act 1948 and the Industries (Development and Regulation) Act 1951.

Why Was the Shop Act License Introduced?

• To Impose Rules Based On Local Culture and empower states: It expressly allows states to frame their regulations and rules pertaining to the labour workforce engaged in such commercial establishments and make necessary exceptions
• To Convert Unorganised Sector Into Organised: Government aims to convert the unorganised sector into an organised industry by bringing in rules and regulations
• Mandates registration: Business registration is mandatory for entrepreneurs under the Shop and Establishment Act, which is the most significant push towards organising and monitoring this sector. With more and more small shops and commercial establishments registered, the government will be able to provide them with better assistance and resources
• To Regulate Wages Of The Employees: Before, any shop or commercial establishment could fix any salary/ wage for its employees, and there was no way to regulate it. Daily wagers and labourers received substantially less money, and business owners weren't held accountable. Shops and Establishment Certificate holders must now comply with government rules regarding wages and provide the care each employee deserves
• Stop Child Labour: Among the most important features of the Shop and Establishment Act is making child labour illegal and punishable. Child labour was common before opening shop act license, which destroyed lives. Government regulations and rules regarding shop and establishment license have made this illegal
• Healthy Working Conditions: Regardless of the condition of the business, the shop act registration requires business owners to maintain a healthy working environment and provide washrooms, baby care rooms, etc.

Benefits of Shop and Establishment License

Legal Right to Conduct Business

Obtaining a shop and establishment license and providing evidence of business, such as a partnership firm or sole proprietorship, gives the business owner the legal right to operate within the Act's jurisdiction. Law enforcement officials cannot harass and bother them.

Ease of Opening Business Bank Account

According to RBI regulations, every business must have a separate business account to manage its money. Under the Shops and Establishments Act, only a certificate can be used to create this business account.

Hassle-free Inspections

Shop and Establishment License provide access to government schemes designed to promote small businesses. Businesses registered under the shop act can also access low-interest bank loans, financial plans, and programmes.

Availing Government Benefits

Shop Act License provide access to government schemes designed to promote small businesses. Businesses registered under the shop and establishment legislation can also access low-interest bank loans, financial plans, and programmes.

Encourage Expansion

By giving a legal entity status, a business owner who is 100% committed to following the shop act registration compliances will be able to strengthen the entity's market position, allowing the business owner to reach out to newer consumers.

Documents Required for Shop and Establishment Registration

We provide end-to-end online shop act registration fulfilment services that are hassle-free and 100% digital. Please prepare your documents as soon as possible

• Shop or business address proof
• ID proof
• PAN card
• Payment challan
• Additional business licenses necessary to start a business

Regulations Under The Shop Registration Act

As part of the Act, the following matters are regulated:

• Work hours, annual leave, weekly holidays
• Compensation and wages
• Employing children is prohibited
• Women and young people cannot work night shifts
• Inspected and enforced
• Rest interval
• Hours of operation
• Employers' record keeping
• Terms of dismissal.

Penalties For Not Acquiring Shop Act License

Under the Shop and Establishment Act, penalties vary by state and are typically monetary, operational, or imprisonment-based. Although the monetary value is high, the risk of a closure notice hangs over various non-compliances.

Closure of Shop or Establishment

If a shop or establishment closes for any reason, the occupier must inform the Chief Inspector in writing within 15 days of the closure. The Chief Inspector will then cancel the shop and establishment registration and remove the business from the register.

Steps Involved In Shop Act Registration

Step 1: Contact our Experts

Book a slot with our experts from Starter’s CFO. They will resolve all your queries about the shop and establishment registration and initiate the process

Step 2: Submit your Documents

Provide all the documents required for shop and establishment registration to our associates from Starter’s CFO for the documents as per your requirement. You have to submit the same

Step 3: Inspection & Approval

During an inspection, the labour department will verify the information you provided and the documents attached to your application. Usually, an inspection isn't needed. The authorities usually approve your application after reviewing your application and visiting your business location. We will deliver your shop act license to your doorstep.

Eligibility Criteria to Register Under Shop and Establishment Act 1947

• The shop or establishment should be located within the territorial limits of Tamil Nadu
• The shop or establishment should not fall under the purview of any other legislation, such as the Factories Act, 1948
• The shop or establishment should be engaged in commercial activities, such as trading, banking, insurance, or entertainment
• The shop or establishment should have at least one employee, including the owner, on its payroll.

FAQ's on Shop and Establishment Act Registration

In addition to registering your IEC, it is crucial to periodically revise and amend all pertinent business information. Neglecting to update these modifications as an importer or exporter can result in inconsistencies during customs inspections. Ensuring that changes such as PAN updates, director alterations, and the inclusion or removal of partners are promptly updated will streamline the export procedure.