When is a shop and establishment license required? Every shop and small business has to be registered under the Shops and Establishments Act. A shops and establishments license required is a basic license and support of a commercial business.

Shops and Establishments Act registration provide various employment conditions such as wage payments, working hours, breaks, meals, holidays, vacations, and other working conditions for people working at various business establishments. In this blog, we will cover all the essential aspects of the Shops and Establishments License, including its benefits, application process, and renewal requirements. So, let’s dive in and gain a deeper understanding of this crucial license for businesses in India.

This registration is required for all businesses except those already covered by the Factory Act of 1948. 

The shops and establishment registration certificate is a basic license and must be presented when applying for other licenses. For example, most banks require it as proof of commerce to open a business current account. Anyone wishing to establish a commercial presence within the scope of the Act must apply for registration within 30 days of starting the business. This registration is mandatory for a variety of reasons, including opening a business account at a bank. A license under the Shops and Establishments License Act serves as a mandatory document for business.

Benefits of Shops and Establishments Registration

1. Legal Evidence of Business 

The shop and establishment registration certificate serve as evidence of the legal body of a store or other commercial organisation that grants the right to do business in that particular area.

2. Commercial Bank Account 

This meets one of the documentary requirements for a bank to open a verifiable checking account as a legal entity. According to RBI standards, each company and facility must open a separate bank account for daily transactions. You can easily open a checking account at a commercial bank based on your company or Company Registration Certificate.

3. No Compliance Costs 

Currently, companies/entities do not need to request compliance after registration. So it is mandatory for a shop and establishment registration certificate.

4. Smooth inspection

 If a state or municipal inspector conducts an inspection visit to confirm the proper functioning of the store/facility and has a store/facility registration certificate, it should be registered as usual. The inspection can be performed quickly in an open state.

5. State Benefits

Each state has a District Industries Centre (DIC) department that acts as a state decision-maker for all SMEs. Business and facility registration certificates provide easy access to various government benefits.

6. Online Settings

Most states offer the option to register online at a store or branch, making the entire process hassle-free and time-efficient.

Documents Required for Shops & Establishments Registration 

The procedure to register the document may vary from state to state. In some states they are completely online. Since shops and establishments are a state matter and hence, documents and fees criteria differ from state to state.

However, here are some of the documents, which are almost necessary for every state:  

1. Photograph of the Shop/Establishment (Any photo of office, Shops, building, etc.) 
2. Certificate of Incorporation, Memorandum Of Association (MOA)

Article Of Association (AOA) of Company, Limited Liability Partnership Agreement 

3. Copy of PAN Card 
4. List of Directors or Partners and Proof of Their Identity and Address
5. Copy of Board Resolution or Partner Consent 
6. Proof of Corporate / LLP / Partnership / Ownership Address 
7. Proof of address (POA) of establishment 

The officer may also ask for further data and documents and has to submit the same. The fee for the whole process varies on how many workers are employed in that particular organisation/business.

Steps to Get a Shops and Establishments License 

 Any owner of a shop or commercial establishment, who has commenced the operation, must apply to the chief inspector for a shop and establishment license within the prescribed time and format. All the following information has to be present in the document 

•  Employer’s name 
•  Facility address 
•  Organisation name 
•  Facility category 
•  Number of workers 

 In addition, other relevant information must be provided upon request. 

After applying, the chief inspector will review the application. If the inspector does not find any errors in the information during the inspection, the office/facility will be registered and a registration certificate will be issued to the resident. Owners are obliged to prominently display the certificate in their store or facility and renew it as required by law. 

How Vakilsearch Can Help in Registering Your Shop or Business 

Also, Read:

• How to Keep Records Under the Shops and Establishments Act?
• Guide to the Shops and Establishments Act
• Records to Be Maintained Under Shops & Establishments Registration