Shop and Establishment Act

Shop and Establishment Act

Shop and Establishment Act

All those, who are planning to enter the business world, need to understand the provisions of Shop and Establishment Act in India. Registration under the Shop and Establishment Act is mandatory for most businesses and since this is the first step towards the promising business world, we have tried to cover the basics of the same.

Shop and Establishment Act is covered under state legislation and each state has framed its own rules and regulations for the same. Since rules are framed by the state government, obviously, rules will differ from state to state and hence rules for the state in which registration is to be obtained needs to be followed.

Applicability of Shop and Establishment Act

Broadly, all shops, hotel, eating house, restaurant, theatres, place of public amusement or establishment and other commercial establishment etc. are covered under the Shop and Establishment Act and are required to obtain registration under the same.

The main objective of the Act is to protect the rights of both employer and employee. The Shop and Establishment Act generally regulates payment of wages, hours of work, terms of service, wages for holidays, leave policy, work conditions, overtime work, interval for meals and rest, prohibition for employment of children, employment of young persons or women, maternity leave and benefits thereof, opening and closing hours, closed days, weekly holiday, dismissal, cleanliness, lighting and ventilation, fire safety and precautions, accidents, record keeping, etc.

Shop and Establishment Act Registration

Establishment covered under the Act must apply for registration, within 30 days from the date of commencement of establishment, in prescribed form along with prescribed fees. Shop and Establishment Act is governed by labour department of the state and generally registration application is to be submitted to local district labour officer. If the concerned officer is satisfied with the application he/she will issue Shop and Establishment Act registration certificate. As mentioned earlier, application procedure would differ from state to state, however, basic details to be provided at the time of applying for registration are as under:

  • Name and address of the establishment
  • Name of the employer
  • PAN of establishment
  • Address proof
  • Sale deed or rent agreement
  • Category of establishment
  • Number of employee
  • Details of employee
  • Other relevant details as called for

A sample shop and establishment act application form is reproduced below for reference:

Andhra Pradesh Shop and Establishment Act Application

Any amendment to the Shop and Establishment Act registration must be intimated to the concerned officer within the prescribed time. In case of closure of  the establishment, the employer is required to intimate the respective officer and apply for surrender of the registration. The officer on being satisfied about the correctness of the application, will issue an order cancelling the

Penalty under Shop and Establishment Act

It is mandatory for all the establishment covered under the Act to obtain registration and follow all the rules and regulations prescribed under the same. In case of any failure in obtaining registration and / or following the rules and regulation of the Act, the establishment would be liable to pay the penalty. The penalty amount would vary from state to state.

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