Shop & Establishment License

Meaning of Shop & Establishment License?

A Shop & Establishment License is a document or a certificate that gives the permission to the applicant (i.e. the person seeking to open a business) to employ people may be as casual workers, full-time employees, contract-based, etc to regulate the work conditions and ensure the workers’ rights are protected. Every state has a separate Rules and Regulations regarding the Shop and Establishment Act.

Why Shop & Establishment License is required?

The Shop and Establishment Act license is issued to a business, trade, professions registered under this Act. All the rules and regulations of the Act are governed by the Department of Labour that not only regulates commercial establishments but also to keep a check on the working of charitable trusts, societies, educational institutes and other premises such as banking, stock exchanges, insurance companies, share brokerages, etc. Both organized and unorganized sectors are regulated under this act that makes sure appropriate working conditions are provided to the labours. The rules and regulations formed under this Act vary from state to state but the primary goal remains the same. Therefore, the establishment that has to obtain the license has to file an online application concerning his state official portal.

Who Issue’s Shop & Establishment License?

Shop & Establishment License is issued by the licensing department of the labour law in respective states, in which the applicant is applying for the license.

The issuance of the license varies from state to state depending on the local government agencies' rules and regulations.

Objectives of Shop & Establishment License

All Indian state has enacted certain rules and regulations with regard to conditions of work. The main objective of this license is to secure uniform advantages for employees working in different establishments from shops, residential hotels, and commercial establishments to restaurants, theatres, and other places of public amusement or entertainment. Additionally, it regulates the wages, holidays, incentives, etc. to set better standards for the working conditions of the employees.

Benefits of Shop & Establishment License

• Provides legal recognition to the respective establishment/shop
• It is a basic license that can prove helpful in further registrations
• Work as a business proof when you apply for further registrations in India
• The registration becomes mandatory for reasons like opening a bank account in the name of establishment/shop
• Helpful in raising investments through loans or venture capitals for the proposed business establishment

Who can apply for the Shop & Establishment License?

• Wholesalers or the retailer's shops and establishments
• Service Centres
• Warehouses, Store-rooms, and Godowns
• Hotels and restaurants
• Entertainment houses, Amusement parks, Theatres, etc.

Documents required for getting Shop & Establishment License

In order to apply for a Shop & Establishment License, the applicant is required to make an application and submit the same along with all the necessary documents.

There are different documents that are required to be provided depending on the type of business intended to be carried on by an applicant.

• Id proof such as Aadhaar card/PAN card/ voter identification card/ driving license of the employer
• In case of a trust, a list of number of trustees
• In case of a company, Certificate of incorporation as per the Companies Act along with MOA
• In the case of co-operative societies, a list of number of members and chairman
• Passport size photograph of the employer
• A photo of establishment/ shop along with the employer
• In case of rented property, a copy of the rent agreement
• Any utility bill of the working premises

What provisions are governed by the Shop & Establishment Act?

• Maximum working hours of the employees/labours
• Time duration allotted for meals and rest
• Regulating laws to prohibit child labour in factories and other establishments
• Women employment
• Number of compulsory weekly holidays provided to the employees
• Close/off days of the establishments/shops
• Opening and closing hours of the establishments/shops
• Wages to employees for the holidays
• Accidents coverage policies
• Preventive measures against fire
• Proper ventilation and lighting for workers
• Clean and hygienic premises for the workers
• Conditions and timing for the payment
• Regulation of deductions on the payments
• Leave Policy
• Dismissal
• Employee’s proper record keeping
• More provisions may be governed depending upon the state in which you are applying.

What are the records to be maintained under Shop & Establishment License?

Every business has to seek approval from the Department of Labour and keep up-to-date registers

• regarding details of employment,
• fines,
• deductions and advances,
• salary and holidays.

Maybe the requirements vary from state to state but files related to annual holidays and the number of employees need to be submitted to the office of the Municipal Corporation annually.

Fees Structure for registration

The fee structure is based on the number of workers and sanctioned electrical load for one year. The factory owner can apply for Grant, Renewal of Licence for one or five or ten years, and accordingly, the fee shall be deposited in the multiplication of a number of years.

The registration process for Shop & Establishment license in the state of Delhi:

Step 1: Got to link http://164.100.190.38/

Step 2: Click on Online Registration.

Step 3: After, you click on Online Registration, then enter the details such as:

• Name of Establishment,
• Address of Establishment,
• Category of establishment as to whether Shop, commercial Establishment, Residential Hotel, Restaurant, Theatre, Public Amusement, Retail Trade, or Business.
• Enter your mobile number, an e-mail I’d. Also, if you have any Website, then enter that.
• Then enter the Name of the employer and manager with their father’s name.
• Then select the nature of business from the drop-down box.

Step 4: Click on continue and submit the form.

Step 5: Enter the following details

• Number of Employees
• Date of Commencement of Establishment
• No. of Members of Employer's family, working in the establishment
• No. of other persons occupying the position of management or employees engaged in a confidential capacity.

Step 6: Click on Register and Submit the form with applicable fees.

Step 7: The inspector shall verify the accuracy and correctness of the application.

Step 8: After being satisfied with the information available, the Inspector shall issue the Registration Certificate.