What is the requirement for a license for shops and establishments?

shop license

For people working at various business establishments, the Shops and Establishments Act provides a variety of employment conditions like wage payments, working hours, breaks, meals, holidays, and vacations. 

The Factory Act of 1948 exempts businesses from registering under this requirement. 

When applying for other licenses, you must present the shops and establishment certificate. A business current account, for instance, requires it as proof of commerce. It is required that anyone starting a business within the scope of the Act apply for registration within 30 days of establishing a commercial presence. Various reasons require registration, such as opening a bank account for your business. Businesses are required to obtain a license under the Shops and Establishments Act.

Registration of shops and establishments has many benefits

1. Evidence of business transactions 

Shop and establishment registration certificates serve as proof of the legal entity granting the right to operate in a particular area for a store or other company.

2. Account for commercial purposes 

In order for a bank to open a verifiable checking account as a legal entity, it must meet one of the documentary requirements. Companies and facilities must open separate bank accounts for daily transactions, according to RBI standards. Commercial banks will easily open a checking account for your company if you have a registration certificate for it.

3. No Compliance Costs 

Compliance is not required after registration for companies/entities. A certificate of registration for shops and establishments is therefore required.

4. Smooth inspection

 It should be registered as usual if a state or municipal inspector inspects the store/facility and has a certificate of store/facility registration. When the inspection is conducted in an open setting, it can be done quickly.

5. State Benefits

Each state has a District Industries Centre (DIC) department that acts as a state decision-maker for all SMEs. Various government benefits can be accessed through business and facility registration certificates.

6. Online Settings

A convenient online registration option is available in most states, ensuring a hassle-free and efficient process.

Documents Required for Shops & Establishments Registration 

States may have different procedures for registering documents. They are available completely online in some states. The documents and fees criteria for shops and establishments vary from state to state because they are a state matter.

The following documents, which are almost necessary for every state, are listed below:  

  1. Photos of the shop/establishment (offices, shops, buildings, etc.). 
  2. Memorandum of Association (MOA), Certificate of Incorporation

Limited Liability Partnership Agreement, articles of association of a company 

  1. A copy of your PAN card 
  2. Proof of Identity and Address of Directors or Partners
  3. Copies of Board Resolutions and Consents of Partners 
  4. An address proof for the corporation, LLP, partnership, or ownership of the company 
  5. Establishment proof of address (POA) 

Further data and documents may also be requested by the officer. This fee depends on the number of workers employed by the organization/business.

The steps for getting a license to operate a shop or establishment 

 Owners of shops and commercial establishments must apply for a shop and establishment license to the chief inspector within the specified timeframe and format. The document must contain all the following information 

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

 The requester must also provide any other relevant information. 

An application will be reviewed by the chief inspector after it has been submitted. A registration certificate will be issued to the resident if the inspector finds no errors in the information during the inspection. As required by law, owners should display and renew their certificates prominently in their stores or facilities.

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