Governed by the state labour departments, the Shops and Establishments Act sets standards for work environments and employee privileges. This act applies to all shops, hotels and restaurants in India. All owners of these establishments must register with the government within 30 days of commencing business operations.

Every state has its own Shop and Establishment Act, but the general provisions of the laws are the same in all states. The Shop and Establishment Act is regulated by the Labour Department of the respective states, which issue registrations to shops and commercial establishments within their borders.

Shops are generally defined as the place where goods are sold by retail or wholesale, or where services are rendered to customers. They include offices, godowns, storerooms and warehouses used in connection with the trade or business.

The Act defines a commercial establishment as one that conducts business in the course of which goods or services are provided by a person to another person or where persons are employed for office work. This includes hotels, restaurants, cafes, theatres and other public entertainment or amusement places. However, factories and industries are not included in this definition and are regulated by the Factories Act, 1948, and Industries (Development and Regulation) Act 1951.

Important points for Shops & Establishment license.

Applicability – This Act includes all commercial establishments such as shops, offices, schools, hospitals, societies, charitable trusts, educational institutions that operate for the motive to earn profits. However, factories are not covered by this Act and are regulated by the Factories Act of 1948.

Meaning of Shop – A place where any business is carried on or where services are rendered to customers. This includes offices or warehouses, whether in the same place or not, used in connection with such a business. It does not include a shop or office attached to a factory within the scope of the Factories Act.

Commercial Establishment – A Commercial Establishment shall mean a commercial or trading or banking or insurance establishment, an establishment or administrative service in which persons employed are mainly engaged in office work, a restaurant, hotel, eating house or boarding etc a cafe or any other refreshment house.

Time to Apply for Registration – To register a business, you must apply for Registration for Shops and Establishment at the Labour Department in the state where the head office is located. You must also apply for Registration at every other place of business where employees are employed. You should apply within 30 days of establishing a new place of business.