Is your Business Registered under Shop and Establishment Act?
Shop Act Licence is mandatory for every business venture that come under the provisions of Shop and Establishment act. Every state has their regulating laws, but the primary purpose behind shop Act is to regulate the aspects related to business such as opening/closing timings, holidays, wages, etc. It not only gives legal identity to establishment but offers many Benefits of Shop act Licence too. So, let us discuss some of the most important features that one will uncover after getting Shop Act Licence.
- The opening of current account - getting registered under Shop and Establishment act will provide you with a license of working and a legal entity as well. The license along with a certificate from a respected chartered accountant will benefit the business for opening a current account with the banks without any trouble.
- Smooth inspections – State government and local municipality conduct regular inspection visits for checking the proper working of shops and establishments along with license as well. If you have the Shop Act license, then you can quickly get over the inspections every time.
- One-time cost – There is no need for any further fulfilment of charges. Only one-time payment is required.
- Legal Recognition to Business-Your business gets legal recognition, can be used.
- Customer Trust-Establishes trust with customers.
Who needs Shop act licence?
- Any Shop conducting a business
- Commercial establishments
- Residential hotels, restaurants and eating houses
- Theatres and other places of public amusement or entertainment and other establishments.
The Act is not applicable to persons whose work is inherently occurring at irregular intervals such as a traveller, canvasser, a watchman or a caretaker. Moreover, the persons employed in the offices of the Union or state government or local authorities are excused. This includes the employees of the Reserve Bank of India, the State Bank of India, and the Life Insurance Corporation.
There are certain conditions that every shop owner has to fulfil. Let us check the vital Conditions of shop act Licence required to be fulfilled to register a business-
- Name of the employer (or manager if any)
- Address proof (Postal address)
- Name of the establishment
- Category of the establishment to which it belongs
- The total number of employees (The minimum requirements is 10 or 10+
What are the required Documents for Shop Act Licence?
The requirements of documents vary from one state to another as nowadays every state has their provisions and rules for shop act registration. Hence, the relevant documents lists are as follows –
- Photo identity proof – it can include any one of the following –
- PAN Card, Passport, Aadhar Card, Driving License, Voter ID Card.
- Address proof – it can include any one of the following –
- Rent Receipt, Electricity/Telephone Bill, Sale/Purchase Deed, Non-Objection Certificate, Property Tax Paid Receipt.
Compulsory Documents for Shop Act Licence
- A clear photo of the establishment including sign board duly displayed
- Documents for Shop Act Licence for business identification –
- In case of co-operative society - Society resolution form and list of chairman and member with address proof
- In case of a Charitable trust – Trustee name and certificate
- In case of banks – Reserve Bank of India permission copy
- In case of cybercafé - Non-objection certificate from the police
- In case of Floor and Masala mill - Non-objection certificate from the Municipal corporation
- In case of a beer bar, restaurant – Copy of excise license and Non-objection certificate from Municipal Corporation, fire brigade, police department.
- In case of Transport business - RTO Transport permit and Copy of Collector permission
- In case of Export-import - IEC certificate
- In case of Share broker - SEBI issued certificates
- In case of food business – Food license from the concerned authority, Food and Drugs administration license and License from Agricultural department
- In case of partnership business –PAN card of the firm and Partnership deed and particulars of all partners such as name and address proof
- In case of a Private company – MOA, AOA, List of directors with name and address proof and Resolution letter in the name of signing authority, address proof.
Offenses and Penalties:
If an employer fails to send the statement to the shop and establishment inspector within the prescribed time period or if any establishment has any contravention of any section or order, it shall be considered as an offense. If any person contravenes, it is considered a punishable offense.
If an employer or manager makes an entry that is false in any material particular with the intention of deception, then it is considered an offense. On conviction, there are chances that the person convicted is given imprisonment up to one year and a fine. Depending upon the severity of the offense, both may also be awarded.
Besides this, there are penalties imposed for obstructing an inspector which is punishable by a fine. In some offenses, under Sections 47, 48, and 49 of the Act, summons is to be served to the accused. If an accused is pleaded guilty and remits the sum, no further proceedings shall take place in respect of that offense.