The shop and establishment license is an essential business registration that governs various aspects of employment, including wages, leaves, work hours, and more. This license is mandatory for all shops and commercial establishments operating within a specific state or union territory. Regulated under the Shop and Establishment Act of each state, it applies to various types of businesses, from retail shops and offices to restaurants, hotels, and entertainment venues.
Why You Need It:
The shop and establishment license is crucial for businesses to ensure compliance with labor regulations. It regulates employment conditions and helps maintain fair practices for workers. Additionally, this license serves as proof of your registered business entity, making it easier to secure bank loans and open bank accounts.
Businesses operating from home or engaged in online and e-commerce activities (excluding factories regulated under the Factories Act) are also required to obtain this license, usually within 30 days of commencing operations.
Procedure to Obtain the License:
The process to obtain a shop and establishment license may vary slightly from state to state, depending on the respective labor department’s guidelines, required documents, and fees. However, there are common steps and documents that typically include the establishment’s ID proof, owner’s ID proof, PAN card, employment details, and more.
For an example of the online procedure, let’s look at how to obtain the shop and establishment license in Delhi:
- **Visit the Delhi government’s labor department website at laborcis.nic.in and click on ‘Online Registration.’
- **Fill Form A Part-I with establishment details such as name, category, address, contact information, and shop-specific details like the employer’s name and nature of business. Then, click ‘Continue.’
- **Complete Part-II with employee details, including the number of employees, establishment start date, and details of family members working in the business. Click ‘Register.’
- **Your registration certificate will be generated with a certificate number, titled ‘Registration Certificate of Establishment.’
Notably, this certificate is issued free of cost and does not require any document submissions. In Delhi, the certificate’s validity is 21 years. The shop and establishment license not only ensures legal compliance but also promotes fair labor practices in businesses across various sectors.
