Have you ever wanted to open a business or operate a shop in Kerala, but are uncertain what license is required? This article takes you through the steps of how you can get the shop and establishment license in the state of Kerala.
There are many small and medium businesses in Kerala, which contribute significantly to the state’s economy. The government of Kerala has been keen to promote this important sector and has therefore enacted several laws and policies that are favorable to small businesses. To start and run a business in Kerala, you will need to obtain a shop and establishment license. This is a relatively easy process and can be completed relatively quickly.
What Is a Shop and Establishment Licence?
A shop and establishment license is a law that permits certain businesses to sell goods and provide services on a commercial basis. It is important to get this license if you want to run your business in Kerala. The license is valid for two years and must be renewed every year. Several requirements must be met to get the license, including having a valid Business Registration Certificate from the Kerala State Chamber of Commerce and Industry.
There are some important things to keep in mind when applying for a license.
- First, make sure that the premises you are using meet the requirements of the law
- Second, make sure that your business is complying with all applicable regulations
- Third, make sure that your staff is qualified and licensed to operate your business
- Fourth, make sure that your financial situation is sound
- Fifth, make sure that your marketing plan is effective
- Sixth, make sure that your insurance coverage is adequate
- Seventh, make sure that your Environmental Impact Assessment (EIA) Report is complete and accurate
- Eighth, make sure that you have all the necessary permits in place before starting your business
- Ninth, make sure that you keep adequate records of your business transactions
- Tenth, be prepared to answer any questions the licensing authority may have about your business.
How to Apply for a Shop and Establishment License in Kerala?
- Step 1: Go to the DCA website and search for the ‘Shop and Establishment License’ application form. You can also find this form on their website by clicking on the link ‘Application Forms’ in the main menu
- Step 2: Fill out the application form and submit it along with the required documents. Required documents include your business plan, financial statement, and proof of insurance. Make sure to save all of your documents so you can refer to them when submitting your application
- Step 3: Once your application has been submitted, it will be processed by the DCA. It may take up to six weeks for your application to be processed, so be patient! If there are any questions that you have about applying for a shop and establishment license, please don’t hesitate to contact the DCA.
What Happens After Receiving the Shop and Establishment License?
You have now received your Shop and Establishment License! Congratulations! Here is a list of things that may happen after you receive the license:
- You will need to get permits from the authorities in each district in which you will be conducting your business
- You will need to contact your bank and open a business account
- You will need to hire a manager for your business
- You will need to purchase or lease suitable premises for your business
- You will need to create a logo for your business and post it online.
Who Can Apply?
Shop and establishment licenses can be obtained by any individual, company or society. To apply for a shop or establishment license, you will need to provide information about the business, such as the name of the business, contact details, opening hours, and whether the business is for sale or not. You will also need to provide information about the owner/manager and any other relevant employees. If you are applying for a new shop or establishment, you will also need to provide information about the area in which the shop or establishment is located and a plan of how the shop or establishment will be organized.
Applicability of Kerala Shop and Establishment Registration
The Kerala Shop and Establishment Registration applies comprehensively across the entire state, covering all shops and commercial establishments unless specifically exempted under the Act. The Act categorizes establishments into three sizes: small, medium, and big. Small establishments have nil to five employees, medium establishments have six to 19 employees, and big establishments employ 20 or more individuals. This inclusive framework ensures that businesses of varying scales are within the purview of the registration, promoting standardized work conditions and regulatory compliance throughout the state.
Registration and Renewal Fees
Ensuring timely renewal is crucial under the Kerala Shop and Establishment Registration Act. If renewal applications aren’t submitted within the stipulated time mentioned in Section 54(6), a penalty of 25% over the standard fee becomes applicable. Amendments to the registration certificate, processed through Form B III, incur a nominal fee of ₹ 50. Duplicating the certificate also carries a fee of ₹ 50. In cases of disputes, individuals can appeal to the appellate authority within sixty days of the order, with an appeal fee set at 10% of the registration fee. Familiarity with these fee structures is essential for businesses seeking adherence to registration requirements.
Monthly Contribution and Welfare Schemes
Under the Kerala Shop and Commercial Establishment Act of 1960, every registered commercial establishment is mandated to deduct a specified amount, ₹ 20 per month, from employees’ salaries. Simultaneously, employers are required to contribute an equal amount. This monthly deduction, to be deposited by the 5th of the following month, contributes to the Labour Welfare Fund (L.W.F.). The funds collected are utilized for a range of welfare activities and benefits for employees, with eligible individuals able to seek assistance from the Labour Welfare Fund. The state government administers various Labour Welfare and Benefits Schemes, enhancing the overall welfare of L.W.F. members.
The Scope of the Shop and Commercial Establishment Act of 1960
The Shop and Commercial Establishment Act of 1960 in Kerala encompasses a broad scope, addressing various aspects of work conditions and employee rights:
Hours of Work and Wages for Overtime
- Employees are limited to eight hours per day and forty-eight hours per week.
- Overtime work warrants wages at twice the ordinary rate.
Spread Over and Interval for Rest
- Work periods, including rest intervals, should not exceed ten and a half hours in a day.
- Employees are entitled to one hour of rest after four consecutive hours of work.
Closing of Shops and Grant of Weekly Holidays
- Shops must be closed on one designated day each week.
- Employees are entitled to one whole day of weekly holiday.
Holiday and Leave
- Twelve holidays with wages after twelve months of continuous service.
- Twelve days of sick leave with wages.
- Twelve days of casual leave with wages for reasonable grounds.
- Special casual leave for sterilization.
- Wages during the leave period.
Dismissal of an Employee
- Employees with six months of continuous service cannot be dismissed without reasonable cause.
- One month’s notice or wages instead of notice is required.
- Appeals can be made to the appellate authority within sixty days.
Employment of Children and Women
- Prohibition of child employment, except as an apprentice.
- The establishment must form a complaints committee for addressing issues, headed by a woman.
Maintenance of Register and Records by the Employers under Kerala Shop and Establishment Act
Ensure adherence to statutory requirements by fulfilling the following obligations:
- Keep a Register of Employment in Form A or B (Sec. 30) Rule 10(1).
- Maintain a comprehensive Service Record in Form B.B. (Rule 10(1) A.
- Track and record employees’ working hours meticulously using Form D (Rule 10(3)).
- Display a notice of employee holidays using Form E (Rule 10(4)).
- Exhibit information containing Act and Rules extracts (Rule 10(5)).
- Keep a register of holidays and leave accurately documented in Form F (Rule 10(9)).
- Maintain an inspection book for regulatory purposes (Rule 10(11)).
- Display a notice of the establishment’s weekly holiday (Sec 11(1)).
- Exhibit the registration certificate prominently within the establishment (Sec 5(c)(1)).
- For establishments employing ten or more individuals, submit a quarterly return in Form H to the inspector by the 10th of the subsequent month for March, June, September, and December (Rule 12 A).
Penalties Under the Shop and Establishment Act 1960
Violations of the Shop and Establishment Act 1960 and its rules incur specific penalties:
I) Breach of Sections 5A and 5C
- Fine up to ₹ 5,000.
- Additional ₹ 250 per day post-conviction.
- ₹ 250 per day after notice for breach discontinuation.
II) Contravention of Various Sections (5D, 5E, 5F, 6, 8, 9, 10, 11, 12, 13, 13A, 14, 18, 21, 21A, and 22)
- Fine up to ₹ 5,000.
- For subsequent offenses, the fine may extend to ₹ 10,000.
Appellate Authority (Under Rule 7)
- Appeals against Chapter VI (Health and Safety) orders go to the Labour Commissioner.
Authorised Officer for Exercising Power (under Sections 5 and 35)
- Granting exemption for up to 30 days: Labour Commissioner.
Authorised Officer for Exercising Power (under Section 10(2))
- Fixation of opening and closing hours:
- Labour Commissioner.
- District Labour Officers.
Licensing Requirements
To obtain a shop and establishment license in Kerala, businesses must meet certain licensing requirements. These requirements vary depending on the type of business but generally include having a valid business license, meeting safety requirements, and complying with local zoning laws. To learn more about these licensing requirements and how to meet them, contact Vakilsearch today.
Conclusion
If you are planning to start a business in Kerala, then you must obtain the proper shop and establishment license. Once you have received it from the relevant authority, your business can commence operations. Make sure to speak to an accountant or lawyer if you have any questions about obtaining this license or any other related documentation. For more information contact Vakilsearch today.
FAQs
What is the Shops and Establishment Act in Kerala?
The Shops and Establishment Act in Kerala is a state-specific legislation that regulates the working conditions, terms of employment, and other aspects for establishments. It encompasses various rules and provisions ensuring the welfare of employees and smooth operation of commercial entities within the state.
What is the validity of Shops and Establishment License in Kerala?
The validity of the Shops and Establishment License in Kerala typically lasts for one year. Establishments are required to renew their licenses annually to ensure compliance with statutory regulations and to continue their lawful operation within the state.
What is the last date for shop license renewal in Kerala?
The specific last date for shop license renewal in Kerala can vary. Establishments should diligently check with the relevant authorities or government websites for the latest information on renewal deadlines to avoid any penalties or disruptions in their operations.
