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Shop & Establishment License

Overview of Shop and Establishment License

To ensure worker’s rights and regulate work environments, most businesses in India, such as shops, restaurants, and cafes, must register under the Shop and Establishment Act. Each state has its own rules and regulations, but the Act aims to provide proper working conditions, protect worker’s rights, and ensure holidays and wages are given.

The Act covers various establishments, including shops, hotels, theaters, and other places of public entertainment, and it also covers establishments notified by the State government.

A shop refers to any place where goods are sold or services are rendered to customers, including store-rooms, warehouses, or workplaces that are not factories or places used for public entertainment. Businesses, trades, and professions registered under the Act can obtain a license.

Eligibility to Obtain a Shop and Establishment License in India

  • Wholesalers, retailers, service centers, warehouses, storerooms, go-downs, hotels, eateries, restaurants, entertainment houses, amusement parks, theaters, and more.
  • Shops and establishments that sell goods or services, as well as warehouses, service centers, and other workplaces, can apply for a Shop and Establishment license in India. This includes hotels, restaurants, entertainment venues, and more.
  • To obtain a Shop and Establishment license in India, your business must fall under one of these categories: wholesalers, retailers, service centers, warehouses, storerooms, go-downs, hotels, eateries, restaurants, entertainment houses, amusement parks, theaters, and any other types of workplaces.
  • Whether you run a shop, a warehouse, a hotel, a restaurant, or any other type of establishment that provides goods or services, you may need to obtain a Shop and Establishment license in India. This license is also available to service centers, entertainment houses, and more.

Benefits of Obtaining Shop and Establishment License

  • Legal Recognition: The Shop and Establishment license grants legal recognition to the business.
  • Acts as Business Proof: The license serves as proof of business registration, required for further business registrations in India.
  • Facilitates Bank Accounts and Other Formalities: The registration of Shops and Establishments is necessary for opening a bank account in the name of the business.
  • Platform for Raising Investment: The license helps entrepreneurs raise investments through loans or venture capital for the proposed business.
  • Government Benefits: The business can avail government benefits at different stages by obtaining the license.
  • Time-Saving: The online process of registration saves time and creates less hassle during operation.

Documents required for obtaining the Shop and Establishment License

These are the documents required for obtaining a Shop and Establishment License in India:

  • ID proof of the employer (such as Aadhar card, PAN card, voter identification card, or driving license)
  • Passport size photograph of the employer
  • Affidavit, cancelled cheque, and bank statement
  • Photo of the establishment/shop along with the employer
  • Copy of the rent agreement (in case of rented property)
  • Utility bill of the working premises

Additionally, depending on the type of business entity, other documents may be required such as:

  • List of trustees (in case of a trust)
  • Certificate of incorporation, MOA, and AOA (as per the Companies Act)
  • List of members and chairman (in case of co-operative societies)
  • Partnership deed (with information such as the name of partners, their signature, and share percentage)

Registration Procedure of Shop and Establishment License

To obtain the license, a commercial establishment/shop must apply to the chief inspector of the area within 30 days of commencing business activities. The application is made through a prescribed form that requires important information, such as:

  • the name of the employee,
  • establishment name and address,
  • number of employees, and
  • establishment category, among other details that vary by state

After application, the inspector reviews it and provides the license to the establishment. The license should be displayed at the premises and renewed at the prescribed time. It is compulsory for all business entities to obtain the Shop and Establishment License, even if they operate from home.

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