So, you decided to open a shop in your neighborhood. You are all delighted about this creation. But, ever knew that you had to register that tiny innovation of yours regardless of how small it is? Yes. It is time to run to the next law bookstore and grab your state’s Shop and Establishment Act. Hence, in a way, as you discovered that passion of running your own business, you were introduced to our little License Raj that is still in place in India. Buckle up, to hear more about it.

Shops and Establishment Act is a state legislation and has been enacted by every state in the country. The act is a beneficial legislation as it provides guidelines for the treatment of the employees recruited in the shops. It provides the closing hours and opening hours of the shops and requires the employers to maintain registers and records as specified. Also, the working hours, minimum wages, list of holidays, maternity benefits etc. are provided in the act and it is the obligation of every employer to allow it to his employees working under him.

Before that, starting on the registration of the act, you might be why your shopwill necessarily have to comply with this Act. Shops and establishments are usually given a liberal definition by the state legislatures to encompass all the commercial establishments. Usually, those establishments that are covered by the Factories Act alone are exempted. Nevertheless, the state government reserves the power to add or delete the establishmentsfrom the purview of the Act by notifications that can be issued. Generally, all the shops including hotels, hostels, café, theatre, and such other commercial establishments are included.

Now, we shall start with the procedure of the registration of the Establishment.

  • File the Application

Within 30 days of the commencement of the establishment, the business owner should send to the Inspector (Chief Inspector of Shops or other Inspectors under the Act) of the area concerned, an application form and fees [as prescribed in the Act]detailing:

  • Name of the establishment, the employer and the manager, if any;
  • Postal address of the establishment;
  • Such other particulars as may be prescribed.

Fees: Depends on the fee prescribed by the State Government for each category of the establishment. It may range from Rs. 100 – 50,000/-.

  • Issue of the Registration Certificate

The Inspector, on verifying the statement, shall register the establishment in the register of establishments and issue a registration certificate. This certificate has to be prominently displayed at the establishment and needs to be renewed before it expires.

Time period: Very much depended on the Inspector

  • Changes in the Registration Certificate

If there is any change in the initial statement, the same has to be communicated within 15 days to the Inspector and he will make changes in the register of establishments and issue a fresh registration certificate.

Once again the Inspector will verify the correctness of the details furnished, make the related change in the Register of Establishments, amend the registration certificate or issue a fresh registration certificate, as he may deem fit. It is essentially the same cycle as mentioned above.

  • Closure of the Business

Now, if you are closing down your innovative creation any time soon, make sure that you report 15 days before to the Inspector and return the registration certificate. The Inspector shall remove your establishment after due verification.