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In India, the Shop and Establishment Act was introduced to monitor/regulate work conditions & to protect the employees’ right in an unorganised sector of employment under the Indian Labor Law. The Shop and Establishment Act Registration is compulsory for all types of food businesses in India be it a food truck or a fine dining restaurant. Generally, shops are defined under the Shop and Establishment Act as the premises where the products selling take place either by retail or wholesale or where services are provided to customers. It comprises offices, storerooms, warehouses & godowns used in association with the trade or business.
Commercial establishments under the Act are defined as a commercial, trading, banking, or insurance establishment or administrative services in which individuals are employed for office work. It comprises a hotel, eating house, theatre, restaurant, café, or other public entertainment or amusement places. However, industries & factories are not covered by the Shop and Establishment Act & are regulated by the Factories Act, 1948 and Industries (Development & Regulation) Act, 1951. The Shop and Establishment Act Registration Certificate or License acts as a Basic Registration or Licence for the business. The Shop and Establishment Act Registration Certificate is produced for getting many other business Licences & Registrations. It serves as incorporation proof of commercial shops or establishments. It is useful when the business owner wants to get a loan or open a current bank account for the business. Most banks will ask for the Shop and Establishment Act Registration Certificate for opening a current bank account.
Following are the regulations under the Shop and Establishment Act:
Following is the list of entities that can apply for Shop and Establishment Act Registration:
Following is the list of benefits that you can avail after getting Shop and Establishment Act Registration:
This Licence provides legal protection to the business and its employees. It also ensures that the business is following all the labour laws and regulations, and protects employees from exploitation & unfair treatment.
Child labour is very common in the unorganized sector. Despite a law prohibiting such activities, adolescents can be found working in a number of industries for extremely low rates from a café to a fabrication industry. The Shop & Establishment Act includes some strong anti-child labour regulations.
Essentially, an owner of the business who devotes 100% to the Shop Act’s requirements will be able to enjoy unanticipated rewards in the long term. The Shop and Establishment Act gives an entity or a company a legal status, allowing the business owner to have better exposure to a neglected part of the market over time.
Many Government subsidies & schemes are available only to businesses that have a valid Shop & Establishment License. Businesses that have Shop & Establishment Act License can take benefit of these subsidies & schemes to lessen their operating costs & grow their business.
As per RBI regulations, every business must have a separate business account to manage its money. Under the Act, only a Shop and Establishment Act Registration Certificate can be used to create this business account.
Following is the list of all the documents required for Shop and Establishment Act Registration:
The complete process for getting the Shop and Establishment Registration Certificate differs from state to state and it can be obtained offline or online.
Note: The validity of the Shop and Establishment Registration Certificate differs from state to state and some states provide the Registration Certificate valid for a lifetime, while other states provide the Registration Certificate valid for 1 to 5 years.
Under the Shop & Establishment Act, penalties vary by state & are generally monetary, imprisonment, or operational-based. Although the monetary value is high, the risk of a closure notice hangs over various non-compliances.
The shop and establishment act is a state-specific law that governs the working conditions, safety standards, and business registration requirements for shops, commercial establishments, and service providers.
Registration under the shop and establishment act is required for all establishments involved in commercial activities, such as shops, hotels, restaurants, theatres, and offices.
By registering under the act, you can demonstrate compliance with legal requirements, protect the rights of your employees, and avail various social security benefits for your workforce.
To register, you need to submit an application with the prescribed fees and required documents to the respective state’s labour department or the online portal, if available.
The commonly required documents include identity proof, address proof, ownership proof or rental agreement, details of employees, and other relevant business documents.
Yes, it is mandatory to display the registration certificate prominently at your establishment where it can be easily seen by employees and customers.
The validity of the registration certificate varies from state to state, typically ranging from 1 to 5 years. After it expires, it needs to be renewed.
The penalty for non-compliance may include fines, imprisonment, or even closure of the business in severe cases, depending on the severity of the offence and the respective state laws.
Yes, you can make changes in your registration details by submitting an application for amendment to the labour department within the specified time frame.
Yes, you are required to maintain registers and records related to attendance, wages, leave, holidays, and other relevant details of your employees.
Yes, the shop and establishment act mandates that certain employee benefits, such as weekly offs, annual leave, maternity leave, etc., should be provided as per the state-specific rules.
The working hours and weekly offs prescribed under the act may vary by state, but in general, establishments are required to adhere to a maximum limit of working hours per day and provide employees with weekly rest periods.
The renewal period varies from state to state. Some states require annual renewal, while others may have longer renewal periods such as once in three or five years.
Yes, you can transfer your registration to another owner in case of a change in ownership. It is necessary to inform the labour department and follow the prescribed procedure for transfer.
Many states have introduced online registration portals to simplify the registration process. You can check the respective state’s labour department website for more information.
Operating without a valid registration certificate can lead to legal consequences, including hefty fines, penalties, closure of the business, and other legal liabilities.
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