Shop Act Registration

Introduction

Every small shop, hotel, or commercial establishment must obtain a Shop and Establishment License to legally carry out business activities. The license requirements vary by state; for example, procedures in Rajasthan differ from those in Uttar Pradesh. It is important for applicants to understand both Central and State-specific rules before applying.

This registration regulates the working conditions, employment terms, and labor rights for employees in both organized and unorganized sectors.

---

Meaning of Shop and Establishment Registration

• It is a legal permission to run a business in India under the Shop and Establishment Act, governed by the Department of Labour.
• Any shop or establishment must register within 30 days of commencement of business.
• The registration certificate serves as proof of existence of the business entity.
• Registration applies to businesses registered as:
  • Business entity
  • Startups
  • MSME Enterprises
  • Under respective state’s Shop & Establishment Act

---

Who Needs Shop and Establishment Registration?

Applicable to:

• Commercial establishments like trading firms, insurance, banks, etc.
• Service establishments like call centers, offices with employees.
• Restaurants, cafes, hotels, boarding houses, eateries.
• Entertainment venues such as cinemas, theatres, amusement parks.

---

When to Apply?

• When an entity employs any workers (full-time, contract, or casual), it must apply within 30 days of starting operations.

---

How to Know If You Need Shop Act Registration?

1. Check if your business qualifies as a “shop” or “commercial establishment” under the Act.
2. Review the state-specific list of shops and establishments covered under the Act.
3. Understand that exclusions may vary by state.
4. If covered, comply with all norms and file online application within 30 days of starting.

---

Employer’s Declaration at Registration

• Working hours of employees
• Number of employees
• Rest intervals
• Opening and closing hours
• Health and safety measures
• Overtime wages
• National and religious holidays

---

Documents Required

• Photo of establishment with name board
• List of directors/managers with ID & address proof
• Details of company and employee salaries
• Address proof of establishment
• Affidavit
• PAN Card copy

---

How to Apply?

• Apply online via the respective state government labor department’s website.
• Submit application with the required documents and fee.
• After application, a labor inspector may visit to verify details.
• Upon approval, the Shop and Establishment License/Certificate is issued.

---

Benefits of Shop and Establishment Registration

1. Current Bank Account Opening:
   Needed by banks as legal proof to open current business accounts per RBI norms.
2. Proof of Legal Entity:
   Legitimizes your business to operate in the state.
3. Smooth Inspections:
   Having the certificate eases inspections by local authorities and municipality.
4. Government Benefits:
   Eligibility for state schemes and benefits designed for small businesses.
5. Less Compliance:
   Reduced ongoing legal compliance with mostly one-time registration cost.

---

Records to be Maintained

• Employment details, fines, deductions, advances
• Salary and holidays registers
• Requirements vary by state
• Annual submission of employee and holiday details may be required to Municipal Corporation

---

Amendment in Registration

• Any changes must be reported to the concerned officer within prescribed timelines.
• On business closure, employer must notify the officer and apply for surrender of registration.
• After verification, registration is cancelled officially.

---