Shop and Establishment Registration

Last Updated at: Jul 06, 2021
The Shop and Establishment Act requires every business to approach the Department of Labour for approval, although the rules and regulations vary from state to state.


The Shop and Establishment Act in India was implemented to govern the rights and working conditions of workers that are employed in the unorganized sector. The act requires all commercial establishments like theaters, eateries, hotels, amusement parks, shops, retail/trade business, etc. to apply for the license and registration within 30 days of commencing the business.

The Act asks the employers to declare the following:

  1.     Working hours
  2.     Rest interval of employees
  3.     Opening and closing hours
  4.     Health and safety measures
  5.     Wages for overtime work
  6.     National and religious holidays

When do You Need a Shop and Establishment License?

When a business entity starts employing people as contract-based or full-time employees, casual workers, etc. then they need to register for the Shop and Establishment licence within 30 days of starting a business to enforce proper regulations for workers’ rights and work conditions.

The shop and establishment registration is required while establishing any commercial place and is a state-based registration for which rules vary according to the state. The commercial establishment as defined in the Act include:

    1.     Commercial sector establishments like trading, insurance, or banking organization
    2.     Establishments where people are employed to provide service or do office work
    3.     Refreshments house, small café, boarding houses, eateries, hotels, etc.
    4.     Entertainment and amusement establishments like cinema halls, theatres, amusement parks, etc.

To know more about the need of Shop and Establishment License: Click here

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Documents Required for registering a Shop Establishment license

How to Apply for Shop and Establishment Registration?

The Shop and Establishment Act requires every business to approach the Department of Labour for the approval, although the rules and regulations vary from state to state. You will need the following documents to apply for the license:

  1.     Applicant’s passport size photograph
  2.     Photo the establishment along with the owner/manager
  3.     List of directors and management employees, if applicable
  4.     Details related to the company, employees, salaries
  5.     Establishment’s address proof
  6.     Affidavit

Click here to know about the documents required for shop and establishment registration in detail.

You will also need to submit the following information:

  1.     Manager and employer’s name
  2.     Establishment’s postal address
  3.     Establishment’s name
  4.     Category of establishment
  5.     Number of employees

You can apply for shop and establishment registration online through the state government’s website. The application in the format prescribed on the website needs to be submitted with the above-mentioned details along with the prescribed fee. Once the application is received by the Department of Labour an inspector will visit your establishment to check the details and will provide the registration certificate/licence in accordance with the Act.

Shops And Establishments Act License Renewal:

As this registration is governed by the state, the procedure may be a little different in every state. Any shop or commercial establishment that commences operations must apply to the Chief Inspector for a Shop and Establishment Act License within 30 days. Do note that renewal must be completed before expiry of the license.

To know more about the Renewal of Shops & Establishment License : Click here

Shop and Establishment Registration: Advantages

The owner of the establishment may benefit from the registration in the following ways:

  1.     The license will help the owner in getting a current account with the bank
  2.     The owner will be at ease in case of unexpected visits by the inspector from the State
  3.     The registration can be renewed easily online with minimal fee without the hustle
  4.     Online registration is an easy and quick process

The owner of such establishments can also contact companies like Vakil Search that offer legal counsel through legal experts and advocates and can help them get the registration within no time and without much effort.

Eligibility Criteria for Shop and Establishment Act

The Act is applicable nationwide, and all the commercial establishments, such as the hotels, and eateries, amusement parks, theaters, and other entertainment houses, as well as any other such public amusement places come under the purview of the Act.

The definition of a ‘Commercial Establishment’, as given in the Act is:

  1. Any commercial sector, such as banking, trading or insurance establishments
  2. Any establishment where individuals are employed or engaged to do office work or provide service
  3. The hotels, eateries and boarding houses or a smaller cafe or refreshment house
  4. Amusement and entertainment places such as theaters and cinema halls or amusement parks

All such above mentioned commercial establishments come under the Act, and need to adhere to the norms and regulations set by the Act for treatment of their employees.

To know more about eligibility criteria click here.

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A lawyer with 14 years' experience, Vikram has worked with several well-known corporate law firms before joining Vakilsearch.