No more delays or difficulties! Register your business with India’s Best CS/CS/Lawyer. The Shops and Establishment act makes sure that both organized and unorganized sectors are providing appropriate working conditions to the labourers.

Shop & Establishment License Registration Online In India

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Shop and Establishment License

Most of the businesses in India, including shops, restaurants, cafes, etc., are regulated under the provisions of the Shop and Establishment Act. To regulate the work environment and to ensure the rights of the workers are being protected, it is mandatory to get your business registered under the Shop and Establishments Act. However, the rules and regulations vary from state to state in; which the Act aims at providing proper working conditions to the labourers and taking care of their holidays, wages, and rights.

As per the Act, the establishment includes shops, commercial establishments, residential hotels, restraint, eating houses, theatres, or other places of public entertainment and also those establishments as notified by the State government in the official gazette.

 A shop means any place or premises where goods are sold and services rendered to customers. It includes store-rooms, go-downs, warehouses or workplaces other than a factory, commercial establishment or other places used for public amusement and entertainment. The License is issued to the following establishments: –

  • Business,
  • Trade,
  • Professions registered under the Shop and Establishment Act.

Eligibility to Obtain a Shop and Establishment License in India

  • Wholesalers or the retailer’s shops and establishments
  • Service Centres
  • Warehouses, Storerooms, and go-downs
  • Additionally, any other working places
  • Hotels
  • Eateries and restaurants
  • Entertainment houses, Amusement parks, Theatres, etc.Bottom of Form

Benefits of Obtaining Shop and Establishment License

  • Legal Recognition

the Shops and Establishment license provides legal recognition to the respective establishment/shop.

  • Acts As a Business Proof

For further business registrations in India, the Shops and Establishment license acts as a business proof.

  • Helpful In Opening the Bank Accounts and Other Formalities

The registration of Shops and Establishments becomes necessary for reasons like opening a bank account in the name of an establishment/shop.

  • Provides A Platform for Raising New Investment

The Shops and Establishment license helps the proposed entrepreneur in raising investments through loans or venture capital for the proposed business establishment.

  • Avails The Government Benefits

By getting the shop and establishment license, the entrepreneur can avail of the government benefits in a different stage of business.

  • Saves Time

As the process of shop act registration has turned online, it saves time in the registration procedure as well as creates less hectic while in operation.

Documents required for obtaining the Shop and Establishment License

Below-mentioned documents are required for Shop and Establishment License-

  • Id proof such as Aadhar card/PAN card/ voter identification card/ driving license of the employer.
  • Passport size photograph of the employer
  • The Affidavit, Cancelled cheque, and Bank statement,
  • A photo of the establishment/ shop along with the employer
  • In the case of rented property, a copy of the rent agreement
  • Any utility bill of the working premises.

Other Documents Required as Per the Establishment or Business Entity

  • In the case of a trust, a list of the number of trustees
  • Certificate of incorporation, MOA, and AOA as per the Companies Act,
  • In the case of co-operative societies, a list of the number of members and chairman
  • Partnership deed with all the important information such as the name of the partners along with their signature and share percentage of partners.

Registration Procedure of Shop and Establishment License

Physical Registration Procedure: – Any commercial establishment/shop has to apply for the License to the chief inspector of the respective area within 30 days of commencement of business activities. It is applied through a prescribed form that requires some important information, such as-

  • The name of the respective employee,
  • Name and address of the establishment,
  • Number of employees in the establishment, and
  • The category of the proposed establishment and some other details vary from one state to another.

Once applied is reviewed by the inspector, then in the next step license is provided to the establishment. The Shop and Establishment License must be displayed at the premises and should be renewed at the prescribed time. Additionally, it is mandatory to obtain the Shop and Establishment License for all business entities, even if they are working from home.

Note-As per the Act, any establishment or Shop in case of closing down the business has to notify the chief inspector in writing before 15 days of closing. The chief inspector further cancels the registration certificate of the establishment or Shop by removing it from the register.

Online Procedure for Obtaining a Shop and Establishment License

  • Visit The Website

First of all, an applicant needs to visit the Labour Department website of the respective state (as applicable) and create the user ID and password through the same link.

  • Fill In the Requisite Details to Create the Profile

Below mentioned details are required-

  • Name of the proposed establishment/shop
  • Name and details of the employer
  • Name and details of the employees at that time
  • Registered establishment address along with NOC or rent agreement (only for rented premises)
  • PAN card details of the employer
  • Form A

Click on Shop and Establishment Registration Form A.

  • Fill In the Requisite Details

Select the state and district of your shop or establishment and fill in the requisite details asked in the form.

  • Upload Documents

Once the form is filled, click on the Upload documents, and attach the requisite documents.

  • Fees

After uploading all the documents, click on the fees button and make the payment.

  • Checking The Status

An applicant can check the status on the under-scrutiny option.

  • Issuance Of the License

If all the documents are as per the requirements of the act, the certificate shall be issued to the proposed establishment/shop.

Note: However, in the case of Physical form Submission, it might take around 15-20 working days for the physical verification and issuance of registration certificate in the major city areas. However, it may vary from one state to another.

Penalties for Shop and Establishment Act

It is compulsory for the entire establishment under the Act to obtain Shop and Establishment registration and comply with all the rules and regulations prescribed under the Act.

However, in case of any failure in getting registration and following the rules and regulations of the Act, the establishment would be liable to pay the penalty. The amount of penalty would vary from state to state.

Aspects Regulated as per the Provisions of the Shop and Establishments Act

The Shop and Establishment Act has made various provisions to regulate the aspects relating to the working of shops and establishments in India. Following are Some Key Aspects Regulated by them: –

  • Maximum working hours of the employees/ labours
  • Time duration allotted for meals and rest
  • Regulating laws to prohibit child labour in factories and other establishments
  • Women employment
  • Number of compulsory weekly holidays provided to the employees
  • Close/off days of the establishments/shops
  • Opening and closing hours of the establishments/shops
  • Wages to employees for the holidays
  • Accident’s coverage policies
  • Preventive measures against fire
  • Proper ventilation and lighting for workers
  • Clean and hygienic premises for the workers
  • Conditions and timing for the payment
  • Regulation of deductions on the payments
  • Leave Policy
  • Dismissal
  • Employee’s proper record keeping

Note: More information related to the Shop and Establishment Act can be gathered on the relative state government portal.

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Frequently Asked Questions

  1. Private Limited Company

    By virtue of section 2(68) of the Companies Act, 2013, Private Limited Company is a type of company which offers limited liability with certain restrictions defined in regulations:

    • restricts the right to transfer shares
    • Limits the numbers of its members to 200
    • Prohibits any invitation to the public to subscribe for any shares in, are debentures of the company(No Public Trading of Shares)
    • Prohibits any invitation or acceptance of deposits from persons other than its member
    • The word ‘Private Limited’ must be added at the end of its name
  2. One Person Company

    One Person Company popularly known as OPC introduced in India under the Companies Act, 2013. The concept of OPC is a fusion of sole proprietorship and private company which intends to permit single economic entrepreneurship to take the advantages of a corporate form of organisation.

  3. Limited Liability Partnership

    Limited Liability Partnership is a corporate entity registered under Limited Liability Partnership Act, 2008. It is a form of partnership firm that enjoys limited liability. It is a hybrid form of a partnership that includes the features of a company. Compliances for a company are applicable to LLP.

No, the whole incorporation process is online. You can send the scanned copy of all the required incorporation documents via e-mail. All the forms and documents are filed electronically and even signed digitally.

The company name should be selected with utmost care. The rules for selecting a company are:

  • The name should be ended with the words “Private Limited” in case of private company, “OPC” in case of one person company and “LLP” in case of limited liability partnership which is mandated by law.
  • The name must be unique.
  • Follow the naming guidelines for better chances of approval.
  • The name should be suggestive of the main objectives to be taken by the business entity.
  1. Private Limited Company
    • Appointment of auditor
    • Statutory audit of accounts
    • Filing of annual return
    • Filing of financial statements
    • Holding Annual General Meeting (AGM)
    • Prepare directors’ report
    • Filing of income tax return
  2. One Person Company
    • Appointment of statutory auditor
    • Holding Board Meetings (BM)
    • Filing of financial statements
    • Filing of annual return
  3. Limited Liability Partnership
    • Filing of financial statements
    • Filing of annual return
    • Filing of income tax return
    • Appointment of auditor
    • Filing of LLP annual return

You don’t need a proper office to incorporate a business entity. You can register your residential address as a registered place of your business with MCA for which some address proof along with the NOC (No Objection Certificate) has to be filed with the prescribed form.

NRIs only allowed to incorporate limited business entities in India including private limited company and limited liability partnership. Also, there is no requirement to obtain the prior approval from the government or RBI. But, in order to register a private company or an LLP at least one director/partner must be a resident of India. However, the private limited company is ideal for NRIs.

In order to execute the idea into a long-term business, choosing the right form of business is important. For start-ups, Private Limited Company is the best option for the following reasons:

  • Limited legal compliances
  • No minimum capital contribution
  • Need only 2 directors and shareholders (both can be the same person)
  • Funding can be raised
  • Limited liability of the members

As per the relevant Act, there is no minimum requirement for Paid-up Share capital or contribution to incorporate a private company, one person company or limited liability partnership. However, each shareholder/partner should subscribe to a minimum one share of Rs.10 face value.

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