How to obtain the Shop and Establishment License in India?

Shop and Establishment Act works on the aim to secure the unchanging benefits for the employees, who are working in various establishments such as shops, commercial establishments like residential hotels, restaurants, and theatres. Under the course of the Act, Shop and Establishment License is necessary for all businesses in India. If any person has established any business entity, then it is essential to obtain a shop and establishment registration to carry business within 3o days of commencing of business.

What is Shop Establishment License?

Shop establishment license is informally known as Shop license. The objective behind the grant of license is to regulate the work conditions and to ensure the protection of the rights of the worker. Department of Labour governs the shop and establishment act in India, and this Act is not just applicable to the working of commercial establishments but also societies and educational institutes.

What are the aspects regulated under Shop and Establishment Act?

The aspects regulated under Shop and Establishment License are-

·         Employee work hours

·         Break timings

·         Opening closing hours

·         Weekly holidays

·         Wages

·         Wages for overtime

·         Deductions on wages

·         Wages for holidays

·         Leave policy

·         National and regional holidays

·         Cleanliness of premises

·         Lightning and ventilation

·         Accidents

·         Precautions from fire

·         Record keeping

·         Welfare and safety of workers

·         Prohibition of discrimination against women worker

Who can obtain Shop and Establishment License?

·         Wholesalers;

·         Retailers;

·         Warehouse, godowns

·         Services centres

·         Eateries

·         Entertainment houses

What are the documents required to be submitted?

The documents needed for the applicant-

·         Passport size photo of the applicant

·         Photograph of the owner along with the shop

·         List of employees and directors

·         Details of employee

·         Address proof of establishment

·         The affidavit needs to be shared by the employee

·         PAN

·         ID proof

Other documents required as per the establishment or business entity:

·         In case of a trust, a list of number of trustees

·         ROC

·         Memorandum of Association

·         In the case of co-operative societies, a list of number of members and chairman

·         Address Proof

·        Partnership deed with all the essential information such as company name, name, and signature of the respective partner and share the percentage of partners

·         A copy of RBI permission

·         Certificate of incorporation as per the Companies Act

·         A copy of the receipt of the registration issued by the charity commissioner

·         A resolution showing the nomination and list of designated directors

·         A recommendation regarding the commencement of the business of society

·         RTO Transportation Permit

·         Food or FSSAI license

·         Food and drug license

·         A copy of the collector permission

·         NOC by the respective police department for a Cybercafe

·         IEC certificate

·         NOC from the municipal corporation for opening a masala and flour mill

·         Excise license for opening a beer bar, restaurant or wine shop

·         A document issued to the share broker by SEBI

·         A permit issued by the police department for opening security services

What are the objectives behind the Shop and Establishment License?

The chief purpose behind the registration is to safeguard the rights and provide benefits to the employees working in the organized sector such as establishments, hotels, and restaurants as well as in the unorganized sectors.

Additionally, it regulates the wages, holidays, incentives, etc. to set better standards for the working conditions of the employees.

Why should you obtain the Shop and Establishment License?

The main benefit of the Shop & Establishment License is as follows:

• It gives you a legal recognization.
• It forms a basic license.
• The registration is compulsory for several reasons one which is opening of a current account in a bank.
• You need to raise investment through bank loans or venture capitals, which requires license or registration to prove the validity.

What is the process for the Shop and Establishment License Online?

Step1

Download the application form

Download the application in the approved format from the official website. Every state has a different website.

Step 2

Fill the required details

Provide the following information-

• The name of the shop
• Name and details of the owner and the employees
• The address of the establishment along with a copy of sale deed or rental agreement
• PAN

  

Step3

Submit the Application

Submit the application form along with the prescribed fees to the  Chief Inspector of Shop and Establishment Act, or from any other inspector delegated to the area where you run the establishment.

Step4

Verification of the application

The higher authority will examine the application form.

Step 5

Issuance of the license

If everything goes accordingly, the registration certificate will be granted by the Chief Inspector of the Shop and Establishment Act.

How much time will it take for the registration process?

The registration process with the verification can take about 15 to 20 working days in major cities. The time duration varies and takes a longer time, depending on the state in which you have the establishment of the business.

What is the Inspection Procedure for the license under the Shop and Establishment License?

The inspection procedure includes the following-

• Locating and identifying  the shops
• Joint Team Inspection
• Inspection report
• Non-Compliance notice has to be sent if any
• Final Action has to be taken

What records have to be maintained under the Shop and Establishment Act?

Every business has affirmed the following documents:

•       The register regarding details of employment,
•       Any fines Imposed with a specific reason,
•       Any deductions from salary
•       Advances issued,
•       Salary details,
•       Holidays awarded

What are the things to be considered while applying for a Shop and Establishment License?

·   The inspector can visit for an examination of the registered premises.

· Display your shop and establishment registration certificate in your respective premises where it is easily visible.

·   The license cannot be renewed before its expiry date.

·    Notify the inspector in writing in case of closing the establishment within 15 days of the closure.

·   Despite the shop and establishment license, you also have to get the approval from respective states' department of labour for commencing the business activities in that state.

Conclusion

If any person has established any business entity, then it is essential to obtain a shop and establishment license to carry business within 3o days of commencing of business. Department of Labour governs the shop and establishment act in India, and this Act is not just applicable to the working of commercial establishments but also societies, charitable trust and educational institutes. In case of any query, contact Corpbiz.