How to Start a SHOP & ESTABLISHMENT LICENSE
In India, most businesses, including shops, restaurants, cafes, and eateries, are governed by the provisions of the Shops and Establishment Act. This law mandates businesses to obtain a Shop and Establishment License. The rules and regulations under this Act are state-specific and may vary from one state to another. The primary goal of this Act is to ensure that businesses provide fair working conditions for their employees, including proper wages, holidays, and other essential rights.
A Shop and Establishment License is required when a business starts employing individuals, whether they are full-time employees, casual workers, or contract-based staff. The license helps regulate working conditions and protects the rights of workers. Informally known as a Shop License, this certificate is issued to businesses, professions, and trades registered under the Shop and Establishment Act.
All regulations of this Act are administered by the Department of Labour, which also oversees the functioning of various establishments, including charitable trusts, educational institutions, and commercial entities like insurance companies, banks, stock exchanges, and brokerage firms.
The key objectives of the Shop and Establishment Act are as follows:
The Shop and Establishment License offers several key benefits, which include:
The following types of businesses and establishments are eligible to apply for a Shop and Establishment License in India:
The vital documents needed for obtaining Shop and Establishment License are as follows:
Other vital documents required as per the concerned business/establishment:
The process to obtain a Shop and Establishment License online involves the following steps:
The first step is to visit the official website of the Labour Department of the respective state where you plan to set up your shop or establishment.
Once on the website, you need to complete the application form by providing accurate details about your business. The required information may vary depending on the state and the type of business.
After filling out the form, the next step is to upload the necessary documents. In some states, you may also be required to physically submit the documents or provide a printout of the application form.
The fee for the license depends on the type of business and the company. Many states offer an online payment gateway for this process.
After submitting the application, the Labour Department will review your details. If needed, an inspector may be assigned to verify the information and documents provided. However, in most cases, an inspection is not required.
Once all the necessary steps are completed, and if the application is approved, the authorities will issue your Shop and Establishment License. The license is typically valid for one year, after which it needs to be renewed annually.
Note: The registration process usually takes around 15 to 20 working days in major cities. However, the timeline may vary depending on the state or region.
The Shop and Establishment Act outlines several provisions that regulate critical aspects of working conditions in shops and establishments across India. These provisions ensure the welfare and rights of employees while maintaining a smooth and fair business operation.
The key aspects regulated by the Act include:
Maximum Working Hours: The Act sets limits on the number of hours employees can work in a day.
Meal and Rest Breaks: It defines permissible time durations for meals and rest periods during working hours.
Child Labour Prohibition: The Act includes laws that prohibit child labour in shops and establishments.
Women Employment: It specifies provisions regarding the employment of women, ensuring their safety and rights in the workplace.
Weekly Holidays: The Act mandates a minimum number of weekly holidays for employees.
Closed Days: The establishment or shop must observe specific off days or closure days.
Working Hours for Shops and Establishments: The opening and closing times for shops and establishments are regulated.
Holiday Wages: The Act requires employers to pay wages for holidays, including weekly off-days and public holidays.
Accident Coverage: Provisions related to accident insurance or coverage for employees are included.
Fire Safety: The Act requires establishments to implement fire safety measures and prevent fire hazards.
Workplace Conditions: It mandates proper lighting, ventilation, and cleanliness to ensure a healthy and safe environment for employees.
Hygiene: Establishments must maintain clean and hygienic premises for workers.
Payment Calculation: The Act provides guidelines for the calculation of wages and the timing of payments.
Payment Deductions: It governs the regulations for permissible wage deductions.
Leave Policy: It sets guidelines on employee leave, including casual, sick, and earned leave.
Dismissal Procedures: The Act outlines the procedures and rules for dismissing employees.
Employee Record Maintenance: Employers must maintain proper records of their employees, including their details and employment history.
Note: For more detailed information, businesses should refer to the specific provisions on their respective state government portals.
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