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What is the Procedure to apply for the Shop and Establishment License?
Savvy Midha
| Updated: Dec 16, 2019 | Category: Business

What is the Procedure to apply for the Shop and Establishment License?

If you are planning to commence the trade business in India, you shall get the necessary Licenses mandatory to start the business such as Trade License, Shop & Establishment License, etc. If the entrepreneur owns the shop or any other commercial establishment in India shall apply for the Shop & Establishment License.

Shop & Establishment License is a state license and is applied to the concerned Chief Inspector of the respective state. Shop & Establishment Act regulates the work condition and ensures the rights of employees in an Organized Sector. The act is not restricted to shops or commercial establishment however it extends to apply to societies, charitable trusts, educational institutes or other NGOs. Act entrusts a certain responsibility on the part of the employer and covers the areas such as working hours, holidays and leaves, overtime, work policies, etc.

Department of Labor supervises and administers the establishment were in any commercial transaction or trade is carried on. Shop and Establishment License is a State License and varies as per the state to state thus the provisions of Act may slightly differ.

Scope of Shop & Establishment Act

Following aspects are covered under Shop and Establishment Act such as: 

  • Working hours including opening hours and closing hours
  • Rest and Intervals
  • Employment of children is prohibited
  • Weekly holidays and paid leaves
  • Deductions from wages such as PF, Pension, Leave Policy
  • Cleanliness and working conditions
  • Lightning and ventilation
  • Maintenance of records concerning accidents occurring during working hours
  • Precautions were taken against fire such as the installation of necessary equipment.
  • Leaves on gusted or national holidays
  • Wages for overtime
  • Health and safety measures for employees and workers

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Registration of Shop and Establishments License

Following is the brief step to get Shop & Establishment License for your business:

  • Apply in prescribed format to the Inspector of the concerned region where the establishment is situated within 30 days of starting the business
  • Furnish the following information in an application:
  • Name of the firm
  • Address of the firm
  • Name of manager or authorized person
  • Nature of establishment whether it is a clothing shop, furniture store, crockery store, etc.
  • Apply along with prescribed government fees and necessary documents attached to it.
  • Once the application is submitted, the inspector shall verify the application for its correctness
  • If the registrar is not satisfied with the information can demand further information or document
  • Once the registrar is completely satisfied with the application it shall enter the details of such establishment in the Register of Establishments.
  • After entering the details in register, Registrar will issue a Registration Certificate for the establishment.
  • A license issued remains valid for 5 years from the date of issue and shall be renewed thereafter before it gets expired.

Documents required for License Issue

Documents required for applying shop & establishment license vary as per the applicant:

  • Proprietor or Individual:
    • PAN and Aadhar of the proprietor
    • Id proof such as Voter Id or Passport of applicant
    • Address proof such as electricity bill or bank statement of proprietor
    • Details of the employee, if any
    • Nature of entity such as owned or rented along with its address proof
  • Partnership:
    • PAN and Aadhar of all the partners
    • Identity proof and address proof of partners
    • Partnership Deed
    • Employee’s details if employed
    • Premise address proof
  • Company:
    • MOA and AOA of the company
    • Certificate of Incorporation
    • Details of directors and members such as name, address, contact details, etc
    • Number of shares held by subscribers
    • Identity proof of directors (Voter Id/Passport/Driving License)
    • Identity proof of subscribers (Voter Id/Passport/Driving License)
    • Address proof of directors (Electricity bill/Bank Statement)
    • Address proof of shareholders (Electricity bill/Bank Statement)
    • Details of employees and staff employed in an organization

Communication of Change to Inspector

The following communication shall be made to the inspector:

  • Notify to the Registrar or Inspector if there is any change in the information provided during application for registration. Intimate the authority within 15 days of such change occurred.
  • Any change such as a change in firm address, change in name of the establishment, change in nature of activities, etc. shall be notified to the inspector.
  • Inspector verifies for the correctness of information of change notified before making the relevant changes in Register of Establishments.
  • After making the changes in register, the registrar shall amend the registration certificate and shall issue a fresh registration certificate with amended details.
  • If the establishment is planning to shut down its business, the owner shall notify the registrar within 15 days of closure of the establishment. An entity shall return the certificate to the registrar.
  • Registrar after verification shall remove the name of establishment from Register of Establishment.

Renewal of License

A license issued under this act remains valid for 5 years and shall be renewed before expiry. As Shop & Establishment License is a state license, rules and procedures may vary as per state to state. Application for renewal can be made online similar to the original application made to the registrar:

  • Visit the official website of Shop & Establishment and login to the portal using Username & Password.
  • Click the tab “Apply for renewal” and proceed further
  • Fill the complete information by filing necessary details and attach the supporting documents
  • Following documents are required for application of renewal:
    • Scanned self-attested copy of PAN & Aadhar of proprietor/partners/directors
    • Copy of voter-id/passport/driving license
    • Passport size photograph
    • Rent agreement of commercial premise and NOC from the landlord
    • Registers maintained such as attendance registers, accident entry, etc.
    • Name and address of the establishment

Conclusion

In India, Shop & Establishment License is one of the mandatory requirements to obtain before starting the business in India and shall display the License every time on its premises. Failure to obtain the same can attract heavy penalties and damages therefore it is advisable to get the same to avoid any interference from government authority.

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Savvy Midha

Savvy Midha holds the degrees of B.Com(honors), LL.B and Company Secretary. She is an experienced Legal and Financial writer with expertise in research, drafting, and copy-writing.

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