Business PlanShops and Establishment

6 Things You Need To Know About the Shop Act In India

Since its inception, the Shop Act has been important and relevant. The legislation introduced a few fascinating things you may not be aware of, with the goal of providing legislative duties and rights to employees and employers. Understanding the purpose, scope, and coverage can aid you in exploring them, especially if you are establishing your own small business. In this article you shall see 6 things you need to know about the shop act in India.

Voiced by Amazon Polly

6 Things You Need To Know About the Shop Act In India : Need for a Shops and Establishments Act:

6 Things You Need To Know About Shop Act In India : When running a firm or a place of business, an entrepreneur must adhere to the terms of the ‘Shop Act’. The Shop Act was enacted to improve the management of working conditions and employment in shops, commercial establishments, restaurants, dining establishments, hotels, theatres, and other public places of amusement. 

Scope of Reach of the Shops and Establishments Act:

The Shop Act is a piece of state legislation, and each state has its own set of rules and restrictions. What the legislation has in common is that it applies to everyone who works in a business, whether they are paid or not, and it does not apply to the employer’s family members.

The state government has the authority to exclude any establishment from any section or whole legislation, either permanently or temporarily.

Where Does this Act Apply? 

These rules apply to people employed in: shops, commercial establishments, establishments for public entertainment or amusement and, other establishments. This includes all kinds of businesses like banks, insurance companies, NBFCs, private educational institutions, restaurants and cafes, theatres, amusement parks, quarries and mines ( excluded in the Mines Act 1952), registered or unregistered trusts (charity/non-charity), any other trade or business, media and broadcasting houses, etc. 

  1. Adaptability

  • If the business premises are located inside municipal borders, the Shop Act is a legal necessity.
  • It’s valid even if you’re running a business out of your house or apartment.
  • You must apply for either a Shop Act Intimation or a Shop Act Intimation based on the number of employees you have.
  • The Shop Act Intimation applies to businesses with up to 9 employees.
  • Shop Act Registration is required for businesses with more than nine workers.
  • The Shop Act Intimation/Registration certificate must be displayed in a conspicuous location in the business premises.
  1. Hours of Work

  • According to the act’s rules, a notice detailing working hours, rest intervals, and even weekly holidays must be posted in the place of business.
  • Businesses that work shifts are expected to post a shift plan for each employee, as well as weekly holidays, well in advance.
  • Between two shifts, there must be at least a 12-hour interval.
  1. Occupational Health and Safety

  • Maintaining a clean and sanitary environment is also part of the legislation and must be rigorously adhered to. 
  • Not only should the premises be free of filth and rubbish, but they should also be odourless and cleaned on a regular basis using approved procedures such as lime washing, colour washing, disinfecting, and deodorising.
  • The area should be properly lighted with lights or natural sunshine, and the fire precautions should be clearly stated. 
  • The employer is responsible for taking all necessary precautions to ensure that the premises and employees are safe from fire. 
  • It is necessary to keep a fully stocked first aid kit with first aid supplies and medications.
  1. Business Closure:

  • If a business closes, the employer is required to notify the shop act authorities within 30 days of the closing.
  • This is true for both Shop Act Registration and Intimation under the Shop Act. 
  • The employer must complete the appropriate paperwork and physically submit it to the appropriate shop act authority.
  • The authorities will remove the name of the establishment from the register of establishments and invalidate the registration certificate after receiving the application and verifying the forms.
  1. Records and Registers: 

  • Every employer must keep a Muster roll and wage record in the approved format, whether electronically or manually.
  • The registration must be written in either English or Marathi.
  • The register should be authenticated either digitally or manually by the employer or any manager who is authorised to do so.
  • The entries of overtime should be recorded immediately after completion of such overtime.
  1. Renewal:

  • The employer or any management who is authorised to do so should authenticate the register, either digitally or manually.
  • Overtime entries should be made as soon as possible after the overtime has been completed.



To conclude, other business licences, such as shop or business address proof, ID evidence, PAN card, payment challan, and further business licences, are required to get a licence under this act. A comprehensive review of all the provisions of the Act is necessary for any and every business person, especially for someone who has a small business or is beginning a small business, to prevent any legal issues after the establishment. As a decent citizen, as well as for the betterment of the establishment, business, and those working with you, the same is expected. 

Contact Vakilsearch for speaking to experts who provide a detailed explanation about the registration process and required documentation.

Also, read:



Back to top button


Remove Adblocker Extension