Process to Obtain Shops and Establishment License

All the shops, hotels, restaurants and theatres need to obtain registration for shops and establishment act. The shops and establishment act was enforced with a view of regulating the working condition of the employees that work in such establishments.

Shop establishment license is issued by the government which gives permission to carry on a particular trade or business to personal. The act regulates the working conditions, wages, hours of work, leaves and other provisions of the working environment.

The law was implemented for protecting the right of both the employer as well as the employee.

What is Shop Establishment License?

Every Entrepreneur in India know about Shop and Establishment act but is unknown to the fact that it is essential for all to obtain the license from their respective state government. The said licence is necessary to be obtained within 30 days of incorporating the shop or establishment.

The licence makes it necessary to follow the regulation of the act regarding the working conditions of the workers and the employees working in the establishment.

Registration Process for Shop and Establishment License

For obtaining one, the application is to be made with the local municipal corporation for obtaining trade license. The owner of the shop and establishment will have to submit some basic documents with the labour department of that respective state. The application will be forwarded to the local officials who will further the application to the registrar.

The registrar will require the following information about the owner and the establishment.

  • Name of the employer
  • Name and address of the establishment
  • Address Proof of the employer
  • Ownership document which includes Sale Deed or Tax documents
  • Number of employees present in the establishment
  • The category of the establishment obtaining a licence
NOTE:  The applicant has to submit Form-B with the local municipal officials to obtain a license.

Renewal of Shop and Establishment License

Shop and establishment licence is valid for 23 years after which the applicant or owner of the establishment will have to file a renewal application with the municipal authority again.

Exemption Under the Act

As per the provision of the act following companies are exempted from obtaining shop and establishment license:

  • Establishment of legal Practitioner
  • Foreign News Agencies
  • Stalls in central and state government fairs or Exhibition that are organised simply for development of industries and science.
  • Barber Shops or Hairdressers established in India
  • Retail shops that deal in poultry such as eggs, milk and Milk products
  • The shops that deal exclusively in medicines and surgical equipment
  • Shops established that deal in Funeral or crematory products or services
  • All the military Canteens or canteen Store Department established or Regimental shops that are located on or outside the Cantonment area.
  • Automobile Service stations and petrol pumps
  • Retail shops that are established in petrol pumps
  • Mental hospitals that provide indoor treatment
  • Refreshment Stalls installed at railway stations
  • Air services companies

Since every company has their own rules and regulation, it is essential to understand that exemption may differ based on the state in which you are obtaining a license in.

Cancellation of Registration

If at any time during the registration the registrar of the act finds that the license was obtained through misrepresentation or suppression of material facts the license can be revoked or cancelled. The registrar may provide a chance of being heard, but ultimately the decision of the registrar will prevail.

If the allegations are found to be true the establishment or the shop will be removed from the register of establishment in the manner prescribed in the act.

What if you are an Online Business?

The act was established in the year 1954, and hence the recognition was given in only to establishments that are physically present. Hence if you operate through a virtual office, there is no need to obtain shop and establishment license although if you deal with clients in a house, it is important that you obtain a license.