The Shop and Establishment Act’s rules currently control and govern the majority of companies in India, including stores, restaurants, cafes, and diners. As a result, obtaining a Shop and Establishment License is mandatory. However, it is important to remember that each State has its own norms and regulations, and that they may differ from one another. Additionally, this Act intends to give hired labourers proper and adequate working circumstances as well as to protect their earnings, holidays, and many other fundamental rights.
When an organisation or business begins hiring individuals as full-time employees, contract workers, casual employees, etc., in order to control and administer the working conditions and also to ensure that their rights are safeguarded, a shop establishment certificate is necessary. Informally, it is also called the Shop License. Therefore, a Certificate or License awarded to a business, profession, or trade registered under the terms of the Shop and Establishment Act is referred to as a “Shop and Establishment License.” It is also important to note that the Department of Labour is responsible for overseeing and enforcing all of this Act’s rules and regulations.
Additionally, this Department monitors the operations of charitable trusts, educational institutions, and other organisations in addition to regulating commercial companies.
Additionally, this Department oversees the operations of charity trusts, educational institutions, societies, and other organisations including insurance firms, banks, stock exchanges, share brokerages, etc. in addition to regulating commercial businesses.
The Shop and Establishment Act’s objectives
The Shop and Establishment Act’s stated objectives are as follows:
- The Shop and Establishment Act’s primary goal is to safeguard the privileges and rights of workers in both organised and unorganised sectors, including those employed in hotels, businesses, and restaurants.
- The Shop and Establishment License also strives to improve employment standards by monitoring and managing the daily treatment of employees.
- Benefits of a License for Shops and Establishments
- The advantages of the establishment and shop
Benefits of a License for Shops and Establishments
The following is a list of the advantages of the Shop and Establishment License:
It gives the specific store or establishment legal recognition.
- It serves as a prerequisite for registrations that follow.
- As evidence of your business, this License. As a result, it aids in gaining more registrations in India.
- Furthermore, without a Shop and Establishment License, businesses cannot open bank accounts. Therefore, in order to create a bank account in the name of a store or establishment, a Shop and Establishment License is required.
- Obtaining a shop licence aids in securing loans or venture capital investments for the intended business establishment.
- Moreover, any additional workplaces.
- Hotels,
- eateries and restaurants.
- entertainment venues like theatres and amusement parks
Documents Required for Shop and Establishment License
The vital documents needed for obtaining Shop and Establishment License are as follows:
- Identity proof such as Aadhar Card, PAN Card, Driving License, Voter ID.
- Employer’s latest passport-sized photograph.
- Photo of the Establishment or Shop along with the employer.
- Copy of Rent Agreement, in the case of the rented premise or property.
- Any utility bill of the working premises such as electricity bills, water bills, mobile bills, etc. However, the said utility bills should not be 2 months older.
Other vital documents required as per the concerned business/establishment:
In the case of a Trust, a list of the number of Trustees.
- MoA (Memorandum of Association).
- For a Co-operative Society, a list of a number of Members and Chairman is required.
- Partnership deed with all the crucial information regarding the firm’s name, name & signature of all the partners, along with the share % of each partner.
- A copy of the permission issued by RBI (Reserve Bank of India).
- A copy of the COI (Certificate of Incorporation) issued under the Companies Act, 2013.
- A Resolution regarding the commencement of the society’s business.
- RTO Transportation Permit.
What are the Key Aspects Governed by the Shop and Establishment Act?
There are various provisions prescribed by the Shop and Establishment Act, which regulate the key or critical aspects concerning the working of establishments and shops in India.
The key aspects that are regulated by the Shop and Establishment Act are:
- Maximum Working Hours for the labours and employees.
- Permissible time durations for having meals and rest.
- Regulating Laws to forbid child labour in factories.
- Women Employment.
- The number of compulsory weekly holidays offered to the employees.
- Close or off days of the said establishments and shops.
- Opening and closing time of the establishments or shops.
- Wages are given to employees for the Holidays.
- Accidents Coverage Policies.
- Preventive Measures against Fire.
- Proper Lighting and Ventilation for workers.
- Clean, hygienic, and sterile premises for the workers.
- Conditions, provisions and timing for the payment calculation.
- Regulations regarding payment deductions.
- Leave Policy.
- Dismissal
- Proper maintenance of records containing employee details.