The Shops and Establishments Act regulates conditions of work, lists rights of employees in the unorganised sector and provides a list of obligations for every employer. It applies nationwide to shops, commercial establishments, hotels, restaurants, eating houses, theatres and other places of public amusement or entertainments. Every shop and establishment is required to register itself under the Act within 30 days of commencement of work, whether or not it has employees.
Registration is required by all business entities, including sole proprietors working out of their homes. If you’re trying to raise investment, get a loan for the business or even something as simple as a current account, you need to be registered.
You need not have a physical shop. However, you should have an establishment. It can be any office. Even if you are operating an office from home, you can apply for this registration.
Every Indian state has enacted certain rules and regulations with regard to conditions of work. The objective is to secure uniform benefits for employees working in different establishments, from shops, commercial establishments and residential hotels to restaurants, theatres and other places of public amusement or entertainment.
This Act sets rules for working hours per day and week, guidelines for spread-over, rest interval, opening and closing hours, closed days, national and religious holidays, overtime work, rules for employment of children, young persons, and women, rules for annual leave, maternity leave, sickness and casual leave, rules for employment and termination of service, maintenance of registers and records and display of notices and obligations of employers as well as employees.
Under the Shop and Establishment Act, every business has to seek approval from Department of Labour and keep up-to-date registers regarding details of employment, fines, deductions and advances, salary and holidays. The requirements may vary from state to state. Files related to annual holidays and number of employees need to be submitted to the office of the Municipal Corporation annually.
Every shop and establishment needs to register itself compulsorily under this Act within 30 days of commencement of work. As this is such a basic license, many other licenses require this as proof of a commercial business. For example, most banks will require you to furnish it if you want to open a current account. To get this license, you would need to provide the PAN card of the business owner or the business itself, a copy of the rental agreement or sale deed, and details of all the employees.