Shop and Establishment Act

All those who are planning to enter the business world need to understand the provisions of the Shop and Establishment Act in India. Registration under the Shop and Establishment Act is mandatory for most businesses. Since this is the first step towards the promising business world, we have tried to cover the basics of the same. Shop and Establishment Act is under state legislation, and each state has framed its own rules and regulations for the same. Since the state government frames rules, obviously, rules will differ from state to state. Hence rules for the state in which registration is to be obtained need to be followed.

Applicability of Shop and Establishment Act

Broadly, all shops, hotels, eating houses, restaurants, theatres, places of public amusement or establishment and other commercial establishments, etc. are under the Shop and Establishment Act. They have to obtain registration under the same. The main objective of the Act is to protect the rights of both employer and employee. The Shop and Establishment Act generally regulates payment of wages, hours of work, terms of service, wages for holidays, leave policy, work conditions, overtime work, interval for meals and rest, prohibition for employment of children, employment of young persons or women, maternity leave and benefits thereof, opening and closing hours, closed days, weekly holiday, dismissal, cleanliness, lighting and ventilation, fire safety and precautions, accidents, record keeping, etc.

Shop and Establishment Act Registration

The establishment covered under the Act must apply for registration, within 30 days from the date of commencement of establishment, in the prescribed form along with prescribed fees. The labor department of the state governs the Shop and Establishment Act. The shop or the establishment submits the application of the registration to the local district labor officer. After the satisfaction of the application, the concerned officer will issue the Shop and Establishment Act registration certificate. As mentioned earlier, the application procedure would differ from state to state. However, the basic details for applying for registration are as under:

Name and address of the establishment
Name of the employer
PAN of establishment
Address proof
Sale deed or rent agreement
Category of establishment
Number of employees
Details of employee
Other relevant details as called for

A sample shop and establishment act application form for reference: Any amendment to the Shop and Establishment Act registration must be intimated to the concerned officer within the prescribed time. In case of closure of the establishment, the employer must intimate the respective officer and apply for surrender of the registration. The officer on being satisfied with the correctness of the application will issue an order canceling the registration.

Penalty under Shop and Establishment Act

It is mandatory for all the establishment under the Act to obtain registration and follow all the rules and regulations prescribed under the same. In case of any failure in obtaining registration and following the rules and regulations of the Act, the establishment would be liable to pay the penalty. The penalty amount would vary from state to state.

FAQs for Registration of shops and establishment

How can I register my shop and establishment online?

The process for registering a shop or establishment online in India may vary slightly depending on the State in which you are located. However, the general steps involved are as follows:

Visit the website of the respective State's labor department where your shop or establishment is located.
Look for the option to register your shop or establishment under the Shop and Establishment Act.
Fill in the required details, such as the name and address of the shop or establishment, the type of business, the number of employees, and other relevant information.
Upload any necessary documents such as proof of identity, address proof, and proof of business ownership. Pay the applicable fees for Registration.

Once the application is submitted, you will receive an acknowledgment or registration certificate, depending on the State, which will serve as proof of your Registration under the Shop and Establishment Act.