Know all about Shop Act Licence- Haryana

Last Updated On: March 4, 2021, 10:41 a.m.



When an entity employs people who may be casual workers, full time employees, contract based etc, to regulate the work conditions and ensure the workers' rights are protected, it is mandatory to get registered under the Shops and Establishments Act, informally called Shop Licence.

Shops and Establishment Act regulates shops, commercial establishments, hotels, clubs, restaurants, eating houses and other places of public amusement or entertainment. Shops and Establishment registration is covered under the state laws of India. Every state has its different set of laws for Shops and Establishment and they are to be followed properly.

The employer of every shop/establishment is required to get itself registered under this Act within 30 days of commencement of work. Registration under the Shops and Establishment Act in the case of small businesses including proprietorship firms in the unorganized sector, it serves as a proof for the existence of the business.


Benefits of the Shops & Establishment Registration:

1. Proof of Legal Entity- Shops & Establishment Registration Certificate acts as a legal entity proof of Shops and other commercial establishments which gives a right for doing the business in that particular area.

2. Business Bank Account- This fulfills one of the documentation requirements of banks to open a current bank account which is legal entity proof. As per RBI norms, each shop & establishment is required to open a separate bank account for the daily transactions. Based on the Shops & Establishment registration certificate, you can easily open a current business bank account.

3. No Compliance Cost- Presently, after getting registered shops/establishments do not require any compliance. So, there will be only a one-time cost i.e. cost of obtaining the Shops & Establishment Registration Certificate.

4. Smooth inspections- If an inspector from the state government and local municipality conducts inspection visits for checking the proper working of Shops/establishments and you have the Shops & Establishment Registration Certificate, then you can quickly get over the inspections every time as you are already registered.

5. Government Benefits- Each state has a DIC Department which acts as a policymaker in the respective state for all small business. The Shops & Establishment Registration Certificate enables easy availment of various government benefits.

6. Online Facility- Most of the states provide the facility of online Registration under Shops and Establishment, which makes the whole process hassle-free and time-efficient.


Documents Required for Shops & Establishment Registration

Some states have a 100% online process or some states are still following the manual procedure. Since, Shops and Establishment is a state matter and hence, documents and fees criteria differ from state to state. However, the following are a set of documents, which are almost necessary for every state:

1. Photograph of the Shop/Establishment (Any photo of office, Shops, building, etc.)

2. Certificate of Incorporation, MOA & AOA of Company / LLP Agreement of LLP

3. Copy of PAN card

4. List of Directors or Partners and their ID & Address proof

5. Copy of Board Resolution or Partners Consent

6. Address proof of Company/LLP/Partnership/Proprietorship

7. Details of all the employees. if any

8. Proof of address of establishment (Sale deed, rent agreement, NOC)

Apart from the above information, the inspector may ask for further information and the same shall be supplied by the applicant. The fee for the whole process varies on how many workers are on employment in that particular organization/business.


Registration procedure for the Shops and Establishment Act

The following is the registration process for the Shops and Establishment license:

1. Check Applicability- Once you have started your business, then the first thing you must do is to check for necessary licenses. Almost within 30 days from the date of commencement of any business, the employer of the commercial shop/establishment should send an application to the inspector in-charge.

2. Procurement of Documents and Filing of Application- You are required to arrange all the necessary documents (list of documents required mentioned above). The application should be in the agreed form. Moreover, the employer should submit it along with the given fees. The Shops and Establishment Act is a state actor and hence, the process for each state is different. Indeed it depends on the type of establishment/business and the state in which you are applying for registration.

The regulated area under Shops and Establishment Act:

In any state, all shops, and commercial establishments which are functioning under the state fall under this Act. Under Shops and Establishment, Act  Shops are defined as a place where goods are sold at retail or wholesale. Apart from this, where no service is given to the customer, whether it is office, storeroom, warehouse, godown or any other working place are all regulated under this Act. Commercial installations, residential hotels, restaurants and other places of entertainment are also under this Act. Further, if the Indian Government wishes, it can also make other establishments under this Act, whose information is given in the official Gazette. Although each state has its own rules prepared for the Shops and Establishment Act, and if the State Government wants it, in this state, this Act can give the shopkeepers, business people the relaxation for a certain period or permanently also in this Act. Can be exempt from the stated rules.


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