To improve working conditions and employment in commercial establishments, restaurants, dining establishments, hotels, theaters, and other public places of entertainment, the Shops Act was enacted. There is no legal oversight in India’s massive unorganized work sector, which suffers from unemployment, corruption, and exploitation. A labour law that caters to its needs. There are specific rules and restrictions for each state, and the legislation applies to everyone who works in a business, regardless of whether they are paid.
The Shops and Establishments Act Governs What Rights?
As a result, the Shops and Establishments Act consists primarily of amendments and laws related to:
- Regulation of working hours,
- Paying wages,
- Holidays or leaves,
- Terms of service,
- Benefits for maternity leave; and
- People working in various establishments may be subject to any other conditions of employment.
Shops and Establishments: Who Can Apply?
As per the Shops and Establishments Act, an establishment is classified as a shop, a commercial establishment, or a place of public amusement or entertainment. These establishments include commercial spaces, residential hotels, restaurants, theaters, or any place of public amusement. Further, a commercial establishment refers to a premise where any trade, business, profession, or any work-related to it is undertaken, such as societies registered under the Societies Registration Act, 1860, charities and trusts, journalism and printing businesses, In addition to contractors and auditors’ establishments, quarries and mines not covered by the Mines Act, 1952, educational institutions and other organizations operated for private gain, any premises carrying on banking, insurance, stock and share brokerage, or product exchange. Factory registrations made under the 1948 Factory Act do not fall under this category.
When registering a shop or establishment, the following information must be provided:
- Firm name
- Firm’s address
- Manager’s name, if any
- The type of establishment, such as a clothing store or furniture store
- Establishment’s employee count
- Observance of a holiday, etc.
Registration Documents for Shops and Commercial Establishments:
- Aadhar, PAN, driving license, and voter ID
- Owner’s photo
- A front-view photo of the shop and its owner
- Contract of rent, if rented
- Bill for electricity
- Incorporation certificate
- The company’s AOA/MOA/LLP agreement
- Copies of the partners’ consent or the board’s resolution (in the case of a partnership)
- A list of partners/directors, along with their addresses and proof of ID (if any)
- Existing employees’ details.
Depending on the state, you will also need to pay a statutory fee with these documents.
The Shops Act Provides the Following Procedure for Obtaining a License
Registration for shop and establishment must be completed within 30 days of starting a business in order to avoid penalties.
- Register your business on the website of the state where it will be located
- This application form will include certain details such as how to register as an individual or organization, depending on the type of establishment/business initiative being registered
- Fill in the organization’s and proprietor’s information
- Documents must be uploaded
- Sign the document and upload it
- Fees must be paid
- Inspection of the application by the labor department and appointment of an inspector to inspect the premises if necessary
- The approval of the application by the authorities and the issuance of a valid license (a one-year license that must be renewed annually).
Process for Renewing an Application
- Log on to the labour department website of your state and select the registering procedure for individuals or organizations
- Sign in with your login ID and fill out the application with your details and submit
- You will be prompted to re-upload all your documents when you request renewal of your license using the application ID
- Depending on the state and establishment category, license renewal fees vary
- Once you make payment, your application status will change to ‘Under Scrutiny’. Until this status changes to ‘Completed’, your work is not complete.
- You will see an option on your right side of the screen to ‘Download Certificate’ once it’s done.