Shop and Establishment Registration

The prevalence of shops in India is extremely high and densely distributed. Shops are one of the most commonly found small businesses of the nation and are generally not subjected to stringent statutory regulations. However, it is essential to note that shops must obtain registration at a state level and be issued a license under the Shops and Commercial Establishments Act 1958 to carry out their business in the relevant state. Moreover, it is essential to note what qualifies as a shop and how it is distinct from establishments.

Shop and Establishment Registration-Overview

Whenever a business is functioning as a shop or an establishment of a commercial nature, they are required to obtain a certain clearance at the state level, which is commonly known as a “trade license”. This license is issued to shops and establishments on the basis of the strength of their workforce as well as the nature of their work. Although the shop and establishment registration procedure are state-specific, the general process for obtaining registration is mirrored under the Shops and Commercial Establishments Act 1958, complemented by state-imposed regulations. 

The difference between shops and establishments:

Shops are defined as premises, not specifically tangible, wherein transactions of sale of goods or services are carried out through retail or wholesale mechanisms. Moreover, shops include ancillary locations related to the sale or rendering of services, including warehouses, offices, or other connected locations used in the trade. 

However, shops do not include commercial establishments, which are broadly defined as establishments wherein commercial, trading, or administrative practices are carried out and persons are employed in service positions. Certain examples of the same would include hotels, theatres, or restaurants. 

It is essential to note that the Shops and Commercial Establishment Act, 1958 and the additional state practices that are based on it are not inclusive of factories or major industrial establishments, which have other statutes dedicated to them. 

Types of Certificates or Trade Licenses under Shop and Establishment Act

• Shop license that deals with retail and wholesale transactions in shops such as grocery stores, or 
• Industries license is granted to establishments engaged in industrial or technical activities such as cyber cafes and such.
• Food establishment license is granted to shops engaged in selling food items such as restaurants and food joints.

Shop And Establishment Act Registration Online

The procedure to obtain a license or a certificate under the Act has been simplified considerably. It is generally based on a similar process across states. 

Mandatory Documents:

The general list of documents necessary to obtain a trade license under the Shop and Establishment Act are:

• Address proof of the business that the license is being obtained for
• Canceled cheque along with Bank details
• Identity proof, photograph, and personal details of each director or owner
• Company details such as Memorandum of Associations, Articles of Association, etc. if applicable. 
• Permanent Account Number of the shop or establishment, if available. 

Procedure:

• The process of online registration may be carried out by visiting the official e-district services website or the official website State Labour Department.
• The applicant needs to click under registration under the Shop and Establishment Act on the website.
• They shall then proceed to an online form wherein they are required to submit the details and documents that are mandatory for registration. 
• The applicant needs to make the payment of a certain fee which is ascertained based on the state that they belong to. For instance, shop and establishment registration Gurgaon costs four thousand seven hundred and twenty rupees. 
• Alternatively, there are provisions for shop and establishment registration offline. The same details have to be furnished and submitted along with the prescribed fee to the designated Inspector of the locality where the shop or establishment is located.

Shop Registration Certificate Download and Term:

The concerned Inspector scrutinizes the application, and if approved, the Shop Registration Certificate, also known as trade license, is issued. After signing in with credentials, you may download the same from the website. The certificate or license is subject to renewal, depending on the concerned state. While some states provide a one-five year term of validity, others might allow perpetual registration.