Shops and Establishment

How Does the Shops and Establishments Act Apply to Different Types of Premises?

Shop and Establishment licenses are granted by The State Department of Labour to the eligible entities. Which entities are eligible to register and obtain the Shops and Establishment license? In this article we shall understand how does the shops and establishments act apply to different types of premises?

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How Does the Shops and Establishments Act Apply to Different Types of Premises: Introduction

The Shop and Establishment Act regulates most of the business establishments in India. The Act is enacted by each state to govern all the business entities and commercial establishments throughout the state. The major objective of the Act is to govern the working of the establishments in the state. The Act regulates the working conditions, payment of wages, holidays, maternity benefits, description of labour, protection of children against labour, etc., 

Premises That Are Regulated by the Shops and Establishments Act

Based on the Shops and Establishments (Amendment) Act, 2018 it is mandatory for any employer employing 10 or more workers to register under the Shop and Establishment Act. The Shops and Establishments Act governs all commercial establishments in the state. As per the Act, commercial establishments include: 

As per the above, the following could be included in the ‘commercial establishments’:

  • All journalistic and printing establishments
  • Any society that is registered with the Societies Registration Act, 1860
  • Charitable trusts that are either registered or unregistered
  • Auditing and contracting establishments 
  • Mines and quarries not regulated by the Mines Act, 1952
  • Educational institutions or other such institutions that are run for private gains
  • Premises where any business like banking, insurance, stock and shares establishments, brokerage, or product exchange is undertaken.
  • Cinema halls and theaters
  • Eating houses and restaurants
  • Clubs and residential hotels
  • Any business establishment where employers provide service or perform office work.
  • Boarding houses, refreshment houses, small cafes, hotels, etc., 
  • Any place of public entertainment such as amusement parks

As per the Act, a ‘shop’ means any premises where:

  • All kinds of goods are sold, either in retail or wholesale outlets. 
  • Any premises where any form of service is rendered to customers
  • Such establishments can include:
  • Storerooms
  • Go-downs
  • Warehouses
  • Any workplace either on the same premises or another in connection with a trading or business activity.

All the aforementioned business establishments are required to register under the Shop and Establishment Act within 30 days of the commencement of business.


Why Is It Necessary to Register Under the Shops and Establishments Act?

The major objective of this Act is to provide uniform benefits to employees of all establishments across the country. Though the rules and regulations of this Act differ from state to state, the primary objective of the Shops and Establishments Act is to regulate the working conditions of the business establishments. 

Benefits of Obtaining the Shops and Establishments License

  1. The registration serves as legal existential proof of the business entity.
  2. It paves way for the opening of a current bank account
  3. Regular inspections are held by local municipalities and state governments. Obtaining such a license helps quickly get over the inspections.
  4. The District Industry Centre of each state creates a policy for running all small businesses. Based on the Shops and Establishments license, one can easily avail of government benefits.

Other Important Details of the Act

The Act regulates the working hours, wage payments, service terms, maternity benefits, holidays, and leaves received by employees of the business establishments. The act also lays down guidelines for working conditions, and the number of people employed, ensuring the wellness of the employees. 

The Act also governs working conditions like proper ventilation, ample lighting, tidiness, insurance against flame, etc. Obtaining a license under this Act opens doors to obtaining various other registrations and certifications. All aforementioned commercial establishments and businesses except those that come under the purview of the Factories Act, 1948 are required to register under the Shops and Establishments Act. 

Why Hire Vakilsearch?

Vakilsearch provides you with a trouble-free service to obtain the Shops and Establishments license. The legal and professional experts at Vakilsearch guide you throughout the entire process of registration.

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