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Overview

All establishments and business, including the people working and maintaining a business from home, must obtain a Shop and Establishment Registration Certificate or Shop License (“Certificate”) under the Act. The proprietors who run a business from home without having any physical store or premises are also required to obtain this Certificate. The proprietors of e-commerce business or online business, or online stores and establishment must register under this Act and obtain the Certificate. Every shop and commercial establishment should register itself under the Act within 30 days of commencement of business. 

It is necessary for every establishment and foundation to register within 30 days of commencing under this act irrespective of the business being fully functional or not. As this is such a basic license, many other licenses require this as proof of a commercial business. For example, most banks will require you to furnish it if you want to open a current account. To get this license, you would need to provide the PAN card of the business owner or the business itself, a copy of the rental agreement or sale deed, and details of all the employees. Premises governed by the Act are shops, commercial establishments, residential hotels, clubs, restaurants, eating houses, theatres and other places of public amusement or entertainment etc. except those who falls under Factories Act 1948.

Records to Be Maintained

  • Employee register and full details
  • Payroll records - salary details, deduction, leave, overtime, fines, holidays, advance salaries
  • Attendance
  • All other details related to an employee
  • All other allied registers.

Regulations

The Act, among other things, regulates the following matters-

  • Hours of work, annual leave, weekly holidays.
  • Payment of wages and compensation.
  • Prohibition of employment of children.
  • Prohibition of employing women and young persons in the night shift.
  • Enforcement and Inspection.
  • Interval for rest.
  • Opening and closing hours.
  • Record keeping by the employers.
  • Dismissal provisions.

Procedure

To register your shop or establishment online, follow the steps outlined below:

Step 1: Visit labour department website

The entire registration process takes place online in many states, while others are semi-online. Every state's labour department has a website with an online registration form and instructions.

Step 2: Fill up application form

Fill out the online application form accurately with information about your business. Details differ depending on the state and type of company.

Step 3: Upload documents

After completing the form, upload the necessary documents online/ In few states, physical submission of documents and a printout of the application form is required.

Step 4: Fee payment

The fee varies depending on the type of company and the type of licence. Many states have an online payment option, but DD/cash payments may also be made offline.

Step 5: Inspection

The labour department examines your application and, if they believe an inspection of your business premises is required in order to verify the particulars you filled up and documents attached, an inspector might be appointed to carry out an inspection. In the majority of cases, Inspection is not required.

Step 6: Approval and issuance of license

Following a review of your application and/or a visit to your business location, the authorities approve your application and issue a valid licence (normally valid for 1 year with renewal every year).

Documents

The documents required for obtaining the shop and establishment registration certificate is-

  • Shop or Business Establishment address proof.
  • ID proof of the proprietor.
  • PAN Card of the proprietor.
  • Details of the employees.
  • Payment challan.
  • Additional business licenses necessary for starting the business, if any.

Benefits

The following benefits are present with Shop and Establishment Registration:

  • Compliance

All businesses and shops secure this license to comply with the requirements of the act. Apart from this, every individual requires this form of registration based on the requirements of the state.

  • Further Registration becomes Simple

Securing this license would enable the business with seamless registration. Securing prospective registration becomes simple with this form of registration.

  • Proof of Establishment

Any shop or establishment, with this license, will be reputed in the eyes of the public. The shop or business would have some form of proof of evidence of establishment through this license.

  • Bank Account

It is compulsory to secure this form of license to open a business bank account. Usually, banks would require this license for registering the bank account. Hence under this process, it is compulsory to open a bank account. Apart from this banks, would provide some form of incentives to shops and commercial establishments.

  • Raising Loans

Usually, a registered shop and establishment can secure loan facilities from banks seamlessly when compared to an unregistered business. Apart from this, there are different forms of benefits availed by registering the establishment.

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