Shops and Establishment Registration: How Does It Happen?

Shops and Establishment Act regulates the working conditions and also the rights of the workers involved in the unorganized sector. This includes wages, holidays, work hours, leaves, etc. However, shop/trade licenses are incorporated in the state subjects and the rules differ accordingly.

This license is compulsory for all business entities. It covers commercial establishments, restaurants, shops, hotels, retail trade, etc. Within 30 days of commencing operations, all such establishments need to register themselves.

Documents Required for Shop & Establishment Registration

Eligibility of Shop and Establishment Registration

Commercial Establishment
As per the act, a commercial establishment refers to any premise where work related to trade, profession, business, or any work is undertaken. Accordingly, a commercial establishment could include:

  • Unregistered or registered charitable or other trusts1.
  • Societies registered under the Societies Registration Act.
  • Printing and journalistic establishments.
  • Auditors and contractors establishments.
  • Mines and quarries not governed by the Mines Act.
  • Theatres and Cinemas.
  • Educational or institutes operating for private gain.
  • Eating houses and restaurants.
  • Premises where the business of insurance, banking, shares, stocks, brokerage, and produce exchange is being undertaken Residential hotels, clubs.
  • Other places of public amusement or entertainment.

Shops

Shops are defined as any premises where:

  • Goods are sold, either by wholesale, retail, etc.
  • Services are rendered to customers.
  • This could also include an office, godown, a store-room, workplace, or warehouse, whether in the same premises or otherwise, utilized in connection with such business/trade.

However, a commercial establishment or a factory under the Factories Act, 1948 is not included in this definition.

Regulations Under Shop And Establishment Acts

While all states have their own laws on shops and establishments, they are very similar in nature. The groundwork of the shop and establishment laws administer:

  • Working hours in a week & day.
  • Opening and closing hours, spread-over, closed days, rest interval, national & religious holidays, overtime work.
  • Employment of young persons, children, and women.
  • Maternity leave, annual leave, casual and sickness leave, etc.
  • Termination and employment of service.
  • Preservation of registers, records, and display of notices.
  • Obligations of employees and employers.

How is a Shop & Establishment Registration/ License helpful for an entity?

  • It serves as a legal entity proof to conduct a trade, company or profession;
  • It aids in availing the government benefits that are furnished from time to time to those registered with the Act;
  • It provides proof for the opening of a current bank account for business purposes;
  • It contributes to the legal resolution of disputes arising in a company or establishment.

Essential Documents Required

  • Photo of the shop/store entrance with the Name Board in local language.
  • Memorandum of Association (MOA), Certificate of Incorporation, and Articles of Association (AOA)/ LLP (Limited Liability Partnership) agreement, in case of an LLP and Company respectively.
  • Identity proof of the owner- Driving license, Voter ID, etc.
  • Copy of PAN card of the establishment or shop.
  • Identity-proof of the owner- Aadhar, Voter ID, driving license, etc.
  • Copy of board resolution or partners’ consent.
  • Address proof of establishment/shop coupled with NOC(if required)- rent agreement, utility bills, etc.
  • Details of directors/partners with Address & Identity proofs.
  • Details of employees- wage rate, duration, number of yearly working days, etc.

By choosing to partner with KBP Advisory & Tax Consultancy, you can have your shop/establishment registration done easily. We will take care of all the formalities and ensure that your business is legalized in the least possible time frame.

Mission

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