Are you curious as to why a business needs a Shop and Establishment License? The shop and establishment license certificate acts as proof of ownership. Read on to know more.
Every business owner in India must be aware of the significance of obtaining a shop establishment license. In this blog, you will learn everything about shop and establishment licenses in India.
In India, each state has created its own set of rules and regulations governing working conditions. The goal of the Shop and Establishment Act is to ensure that employees working in various places, including shops, commercial establishments, residential hotels, restaurants, and theaters, receive uniform benefits. All commercial entities must get a license in accordance with the Act. If a person forms a business entity, he must get a shop and establishment license for the purpose of conducting business within 30 days of commencing the business.
About Shop and Establishment License
Meaning of shop
A location where any type of business or trade is conducted, as well as a variety of services, are provided to customers. It also comprises offices and warehouses that are set up for trading purposes.
The major goal of a shop and establishment license is to regulate and enhance the working conditions of a shop or workplace, as well as the rights of employees, their earnings, vacations, and working hours.
The validity of a license varies by state. The validity is for a lifetime in some states. In some states, the validity period varies from one to five years.
Is a Shop and Establishment License Required for a Home-based Business?
Yes, a valid shop and establishment registration or license is required for businesses operating from home.
Under the same Act, owners of e-commerce businesses, online businesses, e-commerce platforms, and establishments must register and get a certificate. It is mandatory to get a shop and establishment license and get your business registered within thirty days of starting a business.
The Shop and Establishment Act is applicable nationwide, and all commercial establishments, such as hotels, eateries, amusement parks, theaters, and other entertainment houses, as well as any other such public amusement places, come under the purview of the Act.
When Do I Need Registration?
If you are starting a commercial or a shop, (as mentioned above), you need to file for registration under the Act, within 30 days of commencement.
This registration is mandatory for several reasons, including the opening of the current account in a bank. This Establishment Act license, forms as a basic license and proof of your business to apply for other registrations required to run a business in India.
Obligations Mandated Under the Shop and Establishment License
- Record of employees and their complete details
- Details of payroll including salary, overtime, leave, holidays, and advance salaries.
- Attendance of all the employees
- For removal of his/her institution or organization, the owner will notify the chief inspector and, if necessary, have it documented as a hard copy
- Maintain allied registers and all the other basic details of employees.
Any business, which has an office or in turn, an establishment, (even sole proprietors and freelancers operating from home) and are planning to raise investment through bank loans or from venture capitals, require the license or registration to prove their validity. The registration process can be completed, and the hard copy of the certificate will be issued within 10 working days in major cities and might take a longer time (say, 15 to 20 working days) in other places.
- Business Eligibility Under the Shops And Establishments Act
- How to Get a Shops & Establishments Registration