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 The Shops And Establishment Act

Most businesses in India are regulated by The Shops and Establishment Act which is enacted in every State in the Country. The main objective of this Act is to regulate payment of wages, terms of service, holidays, leaves, work conditions, hours of work, overtime work, maternity leave and benefits, rules for employment of children, description of labour, etc. for people employed in shops and commercial establishments (such as hotels, restaurants, theaters, bakeries, societies, charitable trusts, educational institutions (run for gain), eating houses, premises of business (for brokerage/banking/insurance firms, public places of amusement/entertainment, etc.).

All these listed places of employment are required to register under the Shops and Establishment Act within 30 days of commencement of work, irrespective of the number of employees. Factories are not covered under the Shops and Establishment Act but instead, the Factories Act, 1948.

Regulations Under The Act

Some of the regulations of the Shops and Establishment Act are:

Hours of work, interval for meals and rest, prohibition for employment of children, employment of young persons or women, opening and closing hours, closed days, weekly holiday, wages for holidays, deductions from wages, time and condition for making payment of wages, leave policy, dismissal, cleanliness, lighting and ventilation, fire safety and precautions, accidents, record keeping, etc.

Shops And Establishment Act Licences

Any commercial establishment or shop must apply to the Chief Inspector for a Shops and Establishment Act License within the prescribed time frame (30 days of commencement of operations). The application form for the licence must contain the following particulars: name of the employer, name and address of the establishment, the category of establishment, number of employees, PAN card of the business owner/business itself, rental agreement or sale deed, details of all the employees, and other relevant details. The Chief Inspector verifies the application and if approved, issues a registration certificate to the applicant (occupier). The registration certificate should be prominently displayed at the shop or establishment. The license should be renewed periodically as per the Shops and Establishment Act. The registration fee is based on the number of employees hired by the shop or establishment.

For any shop or commercial establishment going to shut down or stop business, the occupier must notify the Chief Inspector within 15 days of closing (in writing). The inspector then reviews the request for closure, followed by canceling the registration certificate and removal of the same from the register.

How Can We Help?

Registration is required for all businesses entities (including sole proprietors working from home). In order to open a current account, raise investment or obtain a loan, a business needs to be registered. It is important to note that each State Government has separate criteria for registration of the Shops and Establishment Act. Here at LegalDesk.com, you can get your shop or commercial establishment registered and obtain licenses for conducting business operations.