Are you aware of all the Legal Licences & Registrations required to run a business? Here is one such Licence you might be unaware of, keep reading to know more....
Before beginning operations, business owners must obtain a Shops and Establishments License because Non-Compliance with any of the provisions of this Act or any Rules made thereunder is punishable by imprisonment for up to six months or a fine of up to one thousand rupees on conviction.
Keep reading to make sure you stay on the right side of the law.
Introduction
The Shops and Establishments Act is applicable nationwide, and it covers all commercial establishments, including hotels, restaurants, amusement parks, theatres, entertainment houses, and public amusement places.
As a result, business owners must obtain the necessary documentation and licences if they fall under the purview of this Act.
Hence, business owners must first understand what a commercial establishment is according to the Act's guidelines.
Here's a quick rundown of the requirements for registering under the Shops and Establishments Act.
What Is a Commercial Establishment?
As per the Act, a Commercial Establishment is defined as one of the following:
Any commercial sector undertaking, such as banking, trading, or insurance establishments.
Any establishment wherein individuals are employed or engaged to do office work or provide various services.
Hotels, eateries, boarding houses, small cafés, or refreshment houses.
Amusement parks and entertainment places, such as theatres and cinema halls.
Consequently, all of the commercial establishments mentioned above are subject to this Act and must follow its regulations.
The Act's exceptions vary by state, and each state in India has a list of commercial establishments that are required to register under the Act.
Therefore, business owners must consult with legal experts in order to understand local laws and operate legally in any location.
When Should You Register?
Anyone planning to open a commercial establishment that falls under the purview of the Act must apply for registration within 30 days of starting their business.
This registration is required for a variety of reasons, including opening a current account with a bank.
The Shops and Establishments Act licence serves as a necessary licence or proof of business that businesses require in order to apply for other registrations and loans.
Why Should You Register with the Shops and Establishments Act?
The primary goal of such a registration is to ensure that employees serving various establishments across the country receive uniform benefits.
The Act also governs work hours, wage payment, terms of service, and employee holidays. It also establishes guidelines for working conditions, the number of employees, and their overall well-being.
The registration serves as a starting point for obtaining additional registrations and certifications. Except for those covered by the Factories Act of 1948, all commercial establishments must register under this Act.
Documents Required for the Registration of Shops and Establishments
Certificate of incorporation/ Memorandum or Articles of Association/ LLP Agreement (if applicable)
Copy of PAN card
List of directors and partners (if applicable)
Identity and address proof of all directors and partners (if applicable)
Copy of partners consent or board resolution (if applicable)
Address proof of the establishment
Details of all employees
Additional business licenses (eg: Trade Licence), necessary for starting the business (if any).
How to Obtain a Shops and Establishments License?
Individuals can apply for a Shops and Establishments licence by filling out an application form on the government's official website.
However, each state has its own set of rules governing the registration process and eligibility requirements.
As so, entrepreneurs must seek legal counsel to ensure they have the necessary documentation ready for registration.
The application form must include information about the establishment's name, address, and employees. These details must be submitted to the inspector in charge of your area in order for the application to be approved.
We hope the above blog was helpful in enhancing your knowledge on the matter. In case of any queries feel free to get in touch with our team of experts.
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Hemant Bardia
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umang@caumang.com
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