Registration Under Shop & Establishment Act

If you have plans to set up a business in India, you should be familiar with the terms of the country’s Shop and Establishment Act. All new businesses must register according to these terms to operate as legitimate, legal entities. Before setting up a business, make sure you know what the law in your region requires of you.

HIGHLIGHTS

Shop and Establishment Act

If you have plans to set up a business in India, you should be familiar with the terms of the country’s Shop and Establishment Act. All new businesses must register according to these terms to operate as legitimate, legal entities. Before setting up a business, make sure you know what the law in your region requires of you.
The Shop and Establishment Act is a state law. While its legal terms are similar across India, each state has a slightly different version. As this is an essential part of setting up a company, we’ll explain what the act means and how to register correctly.

Who Needs to Register with the Shop and Establishment Act?

The purpose of the act is to safeguard the rights of employees and business owners. It has an impact on everything from holiday pay to employment conditions, wages, terms of service, employment hours, breaktime rights, overtime, maternity leave and benefits, business operating hours, dismissal policies, sick pay, health and safety rules, accident management, bookkeeping and more.
Some of the types of commercial establishment required to register are hotels, restaurants, shops, theatres and places of public amusement. Other commercial entities are covered by the act so it’s important to check for yourself whether you need to register.

How to Register with the Shop and Establishment Act

In most regions, you can register a business at the local district labour centre. This is where the Shop and Establishment Act is administered by the labour department of the local government.

The process of act registration must occur within thirty days of the launch of your new business. It must occur in the prescribed form and meet all mandatory registration charges. You’ll be assigned a labour agent and they will award you with proof of registration once all required documentation is complete.

As already explained, each state has its own slightly different version of the act. However, all states ask for the following details:

  • Name of business
  • Address of business
  • Type of business (sector/industry)
  • Sales deed or proof of rental
  • Name of business owner
  • Business owner’s proof of address
  • Number of employees
  • Employee names and roles

After registering with the Shop and Establishment Act, you are required to keep this registration up to date. If there are any significant changes to your business structure, ownership or financial circumstances, you must inform the labour agent who handled your original application.

If your business is closing, you must inform the labour agent. If you do not keep your registration up to date, you may be given a penalty fine.

The Consequences of Failure to Comply with the Act

New businesses in India must comply with the terms of the act or risk penalties. Most commonly, a fine is given when companies miss the registration deadline, do not attempt to register or fail to fulfill all state requirements. A fine may also be given if a business does not inform the labour office of changes in a timely manner.

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Registration Under Shop & Establishment Act(Including government fees)