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Shop Establishment License

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Shop Establishment License

The Shop and Establishment Act is applicable in every state of our country. All commercial organizations must obtain Shop Establishment License. For all commercial organizations where people are employed to provide services or to do office work, places like hotels, boarding houses, eateries, refreshment houses, coffee shops, etc. need to have a Shop Establishment License.

Overview of Shop Establishment License

The Shop and Establishment Act regulates most of the registered businesses in India such as restaurants, cafes, shops, etc. though, the guidelines and rules vary from state to state in India, the main focus of the Shop and Establishment Act is to make sure that the employees of the organizations have proper working conditions and their holidays, wages and rights are taken care of.

All the rules and regulations of the Shop and Establishment Act are governed by the Department of Labour that not only regulates commercial organizations but also keep an eye on the workings of charitable trusts, educational institute, societies, other entities such as stock exchanges, banks, share brokerages, insurance companies, etc.

The Shop and Establishment Act regulates organized and unorganized sectors to ensure that the workers are getting proper working conditions. The commercial organizations have to file an application for Shop establishment License to their respective state official portal.

Who can obtain Shop Establishment License?

Advantages of Shop Establishment License

  • Commercial organizations can have a legal recognition by obtaining a Shop Establishment License.
  • Shop Establishment License can be helpful for the commercial organization in other registrations.
  • The license work as business proof when commercial organizations apply for other registrations.
  • The license becomes necessary for opening a bank account in the name of the organization.
  • The commercial organization can raise investments through venture capitals and loans after obtaining the shop establishment license.

Documents Required for Obtaining Shop Establishment License

  • Identity proof such as Aadhar card, Voter ID card, PAN card, Driving license of the organization's owner.
  • Owners passport size photograph.
  • Owners photo with the organization/shop.
  • If the organization/shop is on a rented premise, then a copy of the landlord's rent agreement and NOC.
  • Utility bills such as telephone bill, electricity bill, gas bill of the working place.

Documents required for other organizations or business entities:

  • If the organization is a trust, a list of all the trustees.
  • ROC
  • Memorandum of Association (MoA)
  • If the organization is a Co-operative Society, list of chairman, and members.
  • A copy of Reserve Bank of India permission.
  • A partnership deed with all the necessary details like name, company name, signature, and share percentage of all partners.
  • As per the rules and guidelines of the Companies Act, Certificate of Incorporation.
  • A verified copy of the certificate of registration issued by the charity commissioner.
  • List of Designated Directors and a resolution showing the nomination.
  • Transportation permit by the RTO.
  • FSSAI License
  • Food and Drug license
  • Verified copy of the collector's permission.
  • In the case of cybercafe, NOC from the respective police department.
  • Import-Export Code (IEC) certificate.
  • In the case of masala or flour mill, NOC from the municipal corporation.
  • In the case of a bar, restaurant, or a wine shop, an excise license is required.
  • In case if it's a share broker, then a certificate issued by SEBI.
  • In case of a security service, license issued by the police department.

Registration Procedure of Shop Establishment License

Any commercial organization has to apply for a shop establishment license to the chief inspector of the respective area within 30 days from the date of the organization/shop's commencement. The license is obtained through filing a form in which the applicant has to provide necessary information like name and address of the organization, name of the employer, the number of employees in the organization and category of the proposed organization and some other details if asked by the respective authorities as the requirement of details varies from state to state. After the chief inspector has verified all the information provided in the form, then the shop establishment license is issued. The organization must display the license in the organization's premises and make sure that the license is renewed on time prescribed by the authorities.

In case if a shop or any establishment wants to close down the business, then the owner has to inform the chief inspector in writing 15 days before closing down the business so that the chief inspector cancels the registration and remove the name of the organization from the register.

All business entities must obtain a shop establishment license even if they are working from home.

Registration Procedure for Obtaining License

  • Download the Application

The first step is to download the official website's application from the respective state in which the establishment is situated.

  • Fill the Required Information
  1. Name of the organization.
  2. Name and information about the owner of the organization.
  3. Name and information about the employees.
  4. If the organization's registered office is on rent or lease, then the rent/lease agreement along with the NOC from the landlord.
  5. Employers' PAN card details.
  • Submission of Application

After providing the information, the application is submitted to the chief inspector along with the fee as prescribed by the Act.

  • Verification of Application

After the application is submitted to the chief inspector, the documents and information provided are verified by the authorities.

  • Issuance of License

After the verification of documents and information, If the authorities are satisfied by the information provided and the information is as per the Shops and Establishment Act, then the authority issues the shop establishment license to the proposed shop/establishment.

The process of issuing a license may take up to 15 to 20 working days for the verification and issuance of the license. However, the time for issuing licenses may vary from state to state.

Conclusion

The Shop and Establishment Act is applicable in every state of our country. All commercial organizations must obtain Shop Establishment License. The Department of Labour governs all the rules and regulations of the Shop and Establishment Act. Any commercial organization has to apply for a shop establishment license to the chief inspector of the respective area within 30 days from the date of the organization/shop's commencement.

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