What is a Shop and Establishment Registration Act?

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What is a Shop and Establishment Registration Act?

Labor law came into existence to save the rights of workers in India. At that time, different acts exist for different types of industries. The Shop and Establishment Act was launched to cater to the needs of massive unorganized sectors. After Independence, unemployment, corruption, and exploitation had no legal boundaries. 

With time every state enacted its own acts such as Maharashtra Shop and Establishment Act came into force in 1948 and Delhi Shop and Establishment Act in 1954. In this act, the shops are defined as a place where goods are sold either by a retailer or wholesaler.  

Here in this article, everything is shared related to Shop and Establishment Act. Check the meaning, objective, and benefits below.

Shop and Establishment Act

Any shop, commercial establishment, residential hotel, restaurant, eatery, theater, or public amusement park will be a part of the shop and establishment act. For any shop owner, having a license will make the business operations easier.

The work timings such as casual, part-time, or full-time are also stated in the act. The working conditions and rights of workers are protected in these establishments. The primary authority for shops and establishments licenses is the Department of Labour. This authority can change and administers the requirements of the shop's act.

The Objective of Shop and Establishment Registration

The following are the objectives of shop act registration:

Encourage Healthy Work Culture

Any business registered under the Shop and establishment act has to follow the rules of conducting business operations, there are certain rules that cover the rights of employees. Regarding the pay scale, work timing, week-off, etc. These rules and regulations encourage healthy work culture which is beneficial for employees and employers also. 

Avoid Unethical Business Activities

In unorganized sectors child labor and exploitation of workers is frequent, many teenagers are found in different sectors working for low wages, ranging from roadside stalls to hotels.

In the act, laws related to women and child labor are implemented strictly. Any license holder found doing these activities, will be punishable under the law.

Encourage Small Businesses Registrations

A major part of the Indian economy is still unorganized and for the government, it's tough to get the idea of small businesses running in this sector. By implementing the Shop and Establishment Act, growth in the number of registration has been seen. 

To encourage small shops to get register, the government is offering many befits such as low-interest bank loans, and financial plans. These benefits will not only increase the registration but also help shop owners to grow in the market.

Benefits of Obtaining a Shop and Establishment License?

The benefits of having a shop and establishment certificate are as follows:

Bank Account

To open a new bank account, a shop owner requires a shop establishment certificate. Fill out an application form to obtain a license and remember that the application must be submitted to the bank within 30 days of commencing the business. If you get the shop act license then the procedure for other certifications will be easy.

Inspection

To avoid any issues and problems during an inspection by the Department Inspector, a business must have a shop license. As stated earlier, businesses must consider this license immediately after starting a business.

Compliance

To comply with the requirements of the Shop and establishment act, all businesses and shops must secure this license. On the other hand, every individual requires this license as per the requirements of the state. This license is proof of commercial establishment to get other licenses.

Raising Loans

Every registered business can secure a loan from a bank without much process and in a very seamless way as compared to an unregistered business. In the process of applying for a loan, different documents are required related to the owner and shop such as address proof of shop, photo of the owner and shop, PAN card, identity of sole proprietorship, etc. So, having a license will help you get a loan fast.

Who can Obtain a Shop Act License in India?

The following entities required a shop and establishment act registration:

• Retailer and Wholesaler Shops
• Workhouse or workplace used for trade
• Theatre or amusement park
• Commercial establishment
• Storeroom, warehouse, or godown
• Restaurants, Eatery or Hotels

Conclusion

To run a shop successfully without any legal intervention, the business owner must have a shop and establishment license. Any applicant who is found running a shop without the proper certification will face penalties from the Department of Labor. So, it is advisable to register for the shop and establishment license as soon as possible. 

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