Uncover the possibility of utilising a single Shop Act License for multiple businesses in India. Learn about regulatory nuances and practical aspects to make informed decisions for your ventures.
What is a Shop Act License?
A Shop Act license is a legal permit allowing business operations at a specific location, essential for physical stores or offices. It signifies the existence of a particular enterprise at that site. In India, each state enforces the Shop and Establishment Act, varying slightly. However, all stores and commercial setups within a state must possess the relevant Shop Act License. In Maharashtra, this act is also known as Gumasta, mandating registration for all shops. Know more about Shop Act License for Multiple Businesses In India.
| The Factory Act and the Shop and Establishment Act are separate regulations governing various facets of business initiation, encompassing employment and labour conditions. |
In India, the state promulgates the Shop and Establishment Act, which differs slightly from state to state. All stores and commercial establishments operating inside each state, however, are protected by the appropriate Shop Act License, according to the Act.
For instance, the other name Gumasta for the Shop and Establishment Act is known in Maharashtra. This act requires that all shops be registered.
Documents Required
To Receive a Shop Act license, you must provide the following documents:
- Aadhar Card
- Address evidence, such as a utility bill or a letter of authorisation from the owner
- To the municipal corporation of greater Mumbai, write an application letter in the approved format
- Letter of authorisation for business
- Form-A, which is an application for registration to the local inspector within 30 days after beginning any work
- Fees set by the government for a joint firm
- Deed of partnership
- PAN card
- Proof of partner’s identification and proof of address.
Can a Proprietorship Firm Use a Shop Act License for Multiple Businesses?
The answer to this question is very clear and simple – ‘YES’, you can use a Shop Act license for multiple businesses in India as a sole proprietor. If you own a multiple business with a common name you have to register for a Gumasta or Shop Act license. But, if you own another business with a different name then you have to collect a separate certificate for your other business as well.
For example – if I own a business as a sole proprietorship with the name Universe Mobile and I decide to start a new business with a unique name then I have to register for a GST and Shop Act license with the desired shop name.
If you are starting many firms, you must ensure that none of them require you to be a private Limited company, LLP, or partnership firm, among other things. For instance, if you want to create a Franchise Business in India, you must register your company as a business organisation rather than a sole proprietorship.
Even if you wish to launch many businesses under the same proprietorship firm name, you can do so.
Could a Person Register More Than One Proprietorship Under One Company?
A sole proprietorship is a business structure where one individual owns and manages the entire operation. It can be established in under 15 days, representing India’s oldest and most basic business format, commonly chosen by independent small business owners. Sole proprietorship firms are often exempt from registration, as they can be identified through other government registrations like Goods and Services Tax (GST). The terms individual business and one-person company registration are synonymous with sole proprietorship.
While a sole proprietor can operate multiple businesses, managing them under a single tax ID simplifies tax return procedures. In this business structure, the owner is personally responsible for all company obligations, and there is no legal distinction between the proprietorship firm and its owner, as it lacks a separate legal identity. This simplicity makes sole proprietorship advantageous, especially when owning multiple enterprises.
How Does a Foreigner Form a Sole Proprietorship Company?
Ans. No, foreign nationals can only open a business in India through the formation of a Private limited company or a Limited Liability Partnership. FDI – Foreign Direct Investment is restricted by the Indian government. The simplest approach to start a business in India is to form a limited liability partnership or a private company.
What is the Shop and Establishment License’s Purpose?
Workers in informal employment lack a governing body to make sure that their privileges and working circumstances are up to par. The Shop Act license was created to address this issue. The Shop/Trade license maintains a certain level of consistency within a certain area in terms of leaves granted, work hours, and remuneration, among other things, even though the rules vary from state to state.
The Shop and Establishment Act governs the operation of firms that engage in any type of trade. This applies not only to commercial businesses, but also to charitable trusts, for-profit educational organisations, and other locations where brokerage, stock, or insurance transactions are conducted.
The rest interval for employees, open and shutting hours, maternity leave, sick and unofficial leave, as well as restrictions surrounding overtime working, national and religious holidays, and so on, are all included by the Shop and Establishments Act.
The Shop Act Registration
It establishes certain basic requirements to guarantee the workers’ safety and rights, as well as to prevent the owners from exploiting them. It has established the following guidelines and restrictions:
- Work hours Breaks for rest and meals
- Children’s employment is prohibited
- Young people’s or women’s employment
- Hours of operation and closing
- Days when the school is closed
- Weekly vacations
- Pay for vacations
- Wage payment schedule and conditions
- Payroll deductions
- Leave of absence policy
- Leave of absence policy
- Dismissal
- Cleanliness
- Ventilation and lighting
- Fire safety precautions
- Accidents
- Keeping track of things
Any merchant or shopping centre owner must get a Shop and Establishment License before 30 days of the establishment’s opening, according to the Shop Act. The Chief Inspector of the neighbourhood obtains this license.
If you have not received a shop license for your business or multiple businesses, it’s not too late to get your Shop Act License. Simply complete an application form followed by the employee name, address, and the establishment’s name, and choose the category, number of workers and other related details.
Conclusion
We hope we cleared your doubts regarding ‘Can I use one Shop Act license for multiple businesses in India?’ If you’re still having trouble, contact our Vakilsearch team to clarify things and get your Shop Act licence work done at home.
Read More:
