Business PlanShops and Establishment

Is a Shop and Establishment License Compulsory in Tamil Nadu?

The Tamilnadu Shops and Establishments Act ensures the dutiful functioning of businesses in the state. Read this article to know if Is a Shop and Establishment License Compulsory in Tamil Nadu?

Voiced by Amazon Polly

What Is the Shops and Establishments Act?

 Is a Shop and Establishment License Compulsory in Tamil Nadu: The Tamilnadu Shop and Establishment Act is state legislation governing the proper functioning and conduct of businesses, within the state of Tamilnadu. The Shops and Establishments Registration has to be obtained from the Labour Department of the State. For Small Scale Industries (SSI) or Micro, Small, Medium Enterprises (MSME) businesses in the unorganized sector, the Shops and Establishments Act registration serves as an existential proof of the business. 

The proper functioning and conduct of companies and businesses in Tamilnadu are governed by The Tamilnadu Shops and Establishments Act. As per the act, some commercial establishments that are required to register are shops, residential hotels, restaurants, theaters, places of public amusement or entertainment, or any other place where trade is carried out.

What Is the Purpose of the Shops and Establishments Act?

The major purpose of this act is to protect the rights of employees. The act also mentions all the rules and regulations of the payment of wages, overtime work, maternity leave and benefits, closed days, holidays, rules for employment of children, maintenance of records, etc., 

Is It Compulsory for Shops to Register Under the Act?

The State Government mandates the registration of shops and establishments for any employer employing ten or more workers, based on the Tamil Nadu Shops and Establishments (Amendment) Act, 2018

Key Definitions of Terms Under the Act

Shop:  A shop means any premises where trade or business is carried on. It is a premise where certain services are rendered to customers. It includes offices, storerooms, godowns, and warehouses, be it on the same premises or any other, not including a restaurant, eating house, or commercial establishment.

Commercial Establishments includes

  • Establishments that are not shops, but an establishment that carries on an advertising business, commission, forwarding, or commercial agency come under commercial establishments 
  • It also includes the clerical department of a factory or industrial undertaking
  • Insurance company, joint-stock company, broker’s office, or banks
  • Any other establishment the State Government notifies to declare as an establishment, for the purpose of this act.


Exemptions From Registration

Though organizations must register under the Act. there are certain exemptions to the registration under the shop and establishment Act. Such exemptions are for

  • Persons employed for any position of management in any establishment
  • Persons who are employed as caretakers, or canvassers
  • Employees whose work involves traveling
  • Central and State Government establishments, or any other local Government establishments, the Reserve Bank of India, any railway establishment
  • Mines and oil field establishments
  • Establishments like fairs and festivals held in bazaars temporarily for a period not exceeding fifteen days at a time
  • Establishments that are not factories as per the Factories Act, 1948 are in respect of matters dealt with in this Act, governed by a separate law for the time being in force in the State.

Major Elements of the Shop and Establishment Act

Child labour prevention: No child can work at an establishment. A ‘child’ by law is any person who has not completed 14 years. A youngster is someone who has not finished 17 years of age.

Opening and Closing of Establishments: No employee can work for more than eight hours a day, or forty-eight hours a week. Also, one day off would be compulsory for every employee, once a week.

Safety and Health: The well-being and protection of employees in the shops and businesses are compulsory. 

Settlement Of Wages: Payment of wages by the managers for the employees working in the establishment promptly.

The Takeaway

As mentioned above, the Shop and Establishment License is mandatory. The experts at Vakilsearch can help you obtain the license in a hassle-free manner.

Also, Read:


Back to top button


Remove Adblocker Extension