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Shops and Establishment

Why Should You Obtain A SE License?

The Maharashtra government recently reduced the number of approvals/permissions for the hospitality and tourism sector to 15. As a result of the pandemic, the state cabinet decided to streamline the approval process. The Mumbai Municipal Corporation (BMC) will use a single-window registration system to complete the SE Act, 2017.

The SE document covers all business entities such as shops, restaurants, commercial establishments, retail trade/businesses, benefit making organisations, public amusements and so on. Irrespective of any business establishment you start, you need to register it within 30 days, whether it is fully functional or not. However, this registration is not compulsory for workplaces that fall under the provisions of the Factories Act of 1948.

This license comes under the purview of the SE Act. Governed by the State Labour Department, this Act seeks to regulate the rights and working conditions of the employees engaged in the Indian unorganised business sector and also specifies the obligations for the employers in this regard. 

The primary objective of this Act is to mandate establishment registration so that all employees receive equal benefits and rights. As a result, it regulates matters such as working hours, wages, payments, leaves, holidays, juvenile/women enlistment, hiring, terminating, and other terms of service related to individuals who work in shops, commercial establishments, or public amusement places.


Records to Be Maintained Under the Act

By applying for the Shops & Establishment License, business requests for the approval of the Department of Labour to operate. It is subject to periodic inspections/visits by concerned Government officials. Must keep the below-mentioned records ready for verification during such visits.

  • Hiring particulars
  • Credit reductions
  • Payments to workers
  • Employee leave records
  • Declaration for non-employment of child labour (any child below the age of 14 years)

Besides, the shops/establishments need to ensure the safety, security, and wellbeing of their employees. They should also make provisions to ensure a reasonable level of tidiness, lighting, ventilation and suitable insurance from damage, as per provisions of law. 

However, these laws may vary from state to state. Some states adhere to stringent rules to prevent child labour in such shops/establishments.  There are rules for employing ‘youngsters’ (a worker who is not a kid and is below the age of 17 years) as well. 

According to these rules, they should not be employed after 7 p.m. and before 6 a.m. on any given day. The maximum permissible duty hours for a ‘youngster’ are 7 hours per day and 42 hours per week.

A shop/establishment will not allow an individual to work for more than 8 hours per day and over 48 hours per week. Or should provide him with adequate compensation for every additional hour at work. 

Further, every individual worker is entitled to receive an entire day’s leave every week. Upon completion of a year of continuous service with the establishment, he/she will also be entitled to 12 holidays in a year, with full wages. All businesses will need to fix a period to pay regular wages. Remember that this period of compensation should not surpass one month. The business should maintain the compliance records about the rules/regulations mentioned above. And should be able to produce these during periodic inspections by Government officials.

Benefits of Obtaining a SE License

  • Right of Doing Business

If you can submit a legal entity proof for your business (such as a partnership firm or a proprietorship firm) you will obtain the right of doing business in your location or your state.

  • Ease of Opening a Current Business Account

As per the RBI norms, every shop and establishment needs to open a separate business account. This is to make sure that it has to reflect its day-to-day transactions. The banks require you to submit a valid entity proof to open such an account. Perhaps, the shops and establishment license will help you to open this account with ease.

  • Facilitates Smooth Inspections

The local municipality and the State Government authorities conduct visits and regular inspections to check whether the shops & establishments in a particular locality are functioning properly or not. If you have the shops & establishment license in place, you can get over such inspections quickly and smoothly.

  • Government Benefits

The State DIC Department is the policy-making body for all small businesses in a State. It comes up with certain schemes to benefit small businesses from time to time and businesses having the shops & establishment license can only avail of these schemes. Therefore, it’s imperative for you to obtain this license, if you have not got one so far.


We hope that we have provided you with information on why you should obtain a shop and establishment license for further help contact our team

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