Shops & Establishment Registration Online in India

An Overview

Shops and Establishment registration is a state-based registration required when establishing a shop, hotel, or any commercial place in a particular state. It is mandatory for every new shop or establishment to register under the Shops and Establishment Act and obtain the license within 30 days from the commencement of work.

Governed by the labour department of each state, the Shops and Establishments Act regulates working conditions and establishes the rights and privileges employees are entitled to. This act applies to shops, profit-making establishments, hotels, restaurants, cafes, cinemas, and all public places of entertainment across India.

The main objectives of Shop and Establishment Registration are:

• To operate in compliance with state law.
• To secure uniform benefits for employees working in different establishments.

What Records Are to Be Maintained Under the Shops and Establishment Act?

• Employee register and full details
• Payroll records — salary details, deductions, leave, overtime, fines, holidays, advance salaries
• Attendance records
• All other details related to employees
• All other allied registers

Why Is It Required to Obtain a Shop and Establishment License?

Every shop and commercial establishment requires this license for the following reasons:

• Bank Account: A bank account opened for business purposes typically requires this license. The applicant must file the application within 30 days of commencing the business.
• Inspection: Businesses with this license will not face issues during inspections by the department inspector.
• Compliance: Compliance with this registration is mandatory. Any shop or establishment that meets this requirement will have minimal issues with government agencies and departments.

Top Four Features of the Shops and Establishment Act

1. Fundamental objective: The act ensures all employees are given equal rights and benefits across all establishments — offices, cinemas, and other places of entertainment.
2. Protocols and rules: The act comes under labour law and governs working hours, opening and closing times, national and religious holidays, employment of women and juveniles, maternity leave, and casual leave.
3. Upkeep of records: All organisations must maintain updated records of hiring, pay, deductions, leaves, and other details as required under the act. These guidelines may vary from state to state.
4. License requirement: A permit under the Shops and Establishments Act is mandatory. All shops and establishments must register under the act within 30 days of commencing operations.

What Is Essential for Obtaining Shop and Establishment Registration in India

1. Name of both the employer and the manager
2. Postal address of the establishment
3. Name of the establishment
4. Category of establishment (restaurant, amusement park, hotel, etc.)
5. Number of employees working

Documents Required

Primary documents required for registration under the Shop and Establishment Act:

• Employer's identity proof — Aadhaar Card, PAN Card, Driving License, or Voter ID
• Employer's passport-sized photograph
• Photo of the establishment or shop
• Copy of Rent Agreement or Lease Deed (for rented premises)
• Utility bill — Electricity Bill or Water Tax Receipt (not older than two months)

Additional documents depending on the nature of the business:

• In case of a Trust — list of trustees
• Memorandum of Association (MOA)
• In case of a Co-operative Society — list of members and chairman
• Partnership deed with firm name, partner names, signatures, and share percentages
• Copy of permission granted by RBI
• Copy of Certificate of Incorporation (COI) under the Companies Act, 2013
• Copy of Certificate of Registration (COR) granted by the Charity Commissioner
• Resolution showing the list of Designated Directors
• Resolution concerning commencement of the society's business
• RTO Transportation Permit
• FSSAI license
• Drug license
• Copy of permission granted by the collector
• NOC from the Police Department (for Cybercafe)
• IEC (Import Export Code) certificate
• NOC from Municipal Corporation (for Flour and Masala Mill)
• Excise license (for beer bar, restaurant, or wine shop)
• Certificate from SEBI (for Share Broker)
• License from the Police Department (for Security Services)

Procedure for Obtaining Shop and Establishment License

1. Download the Application Form: Download the application form from the official website of the respective state where the shop or establishment is located.
2. Fill in Required Details: The owner must fill in all necessary details including:
   1. Name of the proposed shop or establishment
   2. Name and details of the employer
   3. Name and details of all current employees
   4. Address proof of the establishment along with NOC or Rent Agreement (if rented)
   5. PAN card details of the employer
3. Submit the Application Form: Submit the completed form to the Inspector-in-charge or Chief Inspector of the Shop and Establishment Act along with the prescribed fee.
4. Verification: The application and all submitted documents will be verified by the authorities.
5. Issuance of License: If all documents meet the requirements of the act, a certificate of registration will be issued to the shop or establishment.

Note: The registration process may take approximately 15 to 20 working days in major city areas. This may vary from state to state.

Benefits of Shop and Establishment License

• Legal Acknowledgment: The shop license provides official legal recognition to the establishment.
• Foundation for Further Registrations: This license is an essential prerequisite for obtaining additional registrations in India.
• Business Proof: The license serves as valid proof of business existence.
• Bank Account: A shop cannot open a business bank account without this license. Banks also offer certain incentives to registered shops and commercial establishments.
• Raising Investments: The license helps in securing venture capital or loans for the business.
• Compliance: Registering ensures compliance with state requirements and minimises issues with government agencies.
• Seamless Further Registration: Holding this license makes subsequent registrations straightforward.
• Proof of Establishment: The license adds credibility and public reputation to the shop or business.
• Loan Facilities: A registered establishment can secure bank loans more easily than an unregistered business.

Why Legal Tax?

• Our experts provide a detailed explanation of the registration process and required documentation.
• We prepare your application and help gather all necessary employee and shop information.
• We process your shop registration and submit it to the labour department — online or in person as required.
• We keep you updated on your application status throughout the process.
• Following acceptance, the shop license certificate is sent via courier or in person.
• The fee charged by Legal Tax is just Rs. 1499/- — significantly lower than other service providers.

FAQs

Q1. What is EPOS?

EPOS stands for Electronic Point of Sale — a computerised system used to record sales and manage inventory.

Q2. What is Private Label?

Private labels are brands owned not by a manufacturer but by a retailer or supplier, who purchases, labels, and markets the goods under their own name.

Q3. How much time does it take to get a Shop License?

It takes approximately 5 to 7 working days to file the documents with the relevant authorities and complete the registration.

Q4. On which parameter does the validity of the Shop and Establishment Act depend?

The validity of the shop license depends on the respective state's Shop and Establishment Act.

Q5. I am running a factory. Do I need a shop license?

No. Factories are not covered by the Shop and Commercial Establishments Act — they are regulated by the Factories Act.

Q6. Do all shops and businesses need to register under the Shop and Establishment Act?

Almost all shops and businesses are required to obtain a shop license under the respective state's Shop and Commercial Establishment Act.

Q7. What documents are required for the Shop and Establishment Act?

• Employer's identity proof — Aadhaar Card, PAN Card, Driving License, or Voter ID
• Employer's passport-sized photograph
• Photo of the establishment or shop
• Copy of Rent Agreement or Lease Deed (for rented premises)
• Utility bill — Electricity Bill or Water Tax Receipt (not older than two months)

Q8. What are the benefits of Shop and Establishment Act registration?

• Legal acknowledgment of the shop or establishment
• Acts as a foundation for further registrations
• Serves as business proof
• Required for opening a business bank account
• Helps in raising loans and investments
• Ensures compliance with state requirements
• Adds public credibility to the business

Q9. Why choose Legal Tax for Shop and Establishment registration?

• Expert guidance on the registration process and documentation
• End-to-end application preparation and submission
• Regular status updates throughout the process
• Certificate delivered via courier or in person after acceptance
• Fee of just Rs. 1499/-

Q10. What is the fee charged by Legal Tax for Shop and Establishment registration?

The fee charged is Rs. 1499/- only.

Q11. If the business has no employees, does it still need to register?

Yes. All shops, irrespective of the number of employees, are required to obtain the license where applicable.

Q12. What records must be maintained under the Shop and Establishment Act?

Mandatory records include: Employment Register, details of fines imposed, advances issued, salary details, salary deduction details, and holidays awarded.

Q13. What is a Commercial Establishment?

Under the Shop and Establishment Act, a commercial establishment includes banking, insurance, and trading establishments; hotels, eateries, cafes, and refreshment houses; offices providing services; and entertainment venues such as cinemas, theatres, and amusement parks.

Q14. Is prior approval from the Labour Department required?

Yes. Every business registered under the Shop and Establishment Act must obtain prior approval from the labour department before commencing operations.

Q15. What are the objectives of the Shop and Establishment Act?

The primary objective is to provide uniform privileges and benefits to all employees working in different establishments — shops, commercial places, hotels, restaurants, theatres, and other entertainment venues.

Q16. What is the validity period of the Shop and Establishment License?

A Shop and Establishment License is valid for one year and must be renewed annually. Rules regarding issuance and renewal vary from state to state.

Q17. Is it mandatory for all shops to register under the Shop and Establishment Act?

Yes. Almost all shops and establishments are required to obtain a license under the respective state's Shop and Establishment Act.

Q18. What is the difference between an Establishment and a Factory?

An establishment includes hotels, restaurants, theatres, and amusement parks. A factory is a facility set up to manufacture and produce goods. An establishment is not necessarily a factory, but a factory can be considered an establishment.

Q19. What is the difference between an Establishment and a Shop?

An establishment includes hotels, theatres, restaurants, and amusement parks. A shop is a premises where goods are sold or services are offered — such as storerooms, offices, or warehouses.

Q20. Is there any penalty for not obtaining the license?

Yes. Penalties are imposed for operating without a license and vary from state to state.

Q21. What are the risks of not obtaining a shop license?

Operating without a Shop and Establishment License is risky. Regulatory authorities may seal and close the business. Heavy fines, penalties, or litigation may follow if the business is found operating without a license.

Q22. Can I open a current bank account with the Shop and Establishment Certificate?

Yes. A current bank account can be opened using the Shop and Establishment Certificate, which is accepted as valid documentary proof by all banks.

Q23. Is physical presence required for the registration process?

No. The entire process is online-based. You only need to submit the required documents through the portal.

Q24. Is the registration certificate required to be renewed?

Yes. The registration certificate issued under this act must be renewed periodically.