Shop and Establishment Act is a significant act which is regulated by the Department of Labor. It is engaged in the regulation and supervision of commercial establishments, charitable trusts, societies, educational institutions. The act is formulated for every state. Thus, there are separate acts for states such as New Delhi, Karnataka, Tamil Nadu, Mumbai, etc. In this article, we will talk about important aspects with regards to the shop and establishment act.


What Are The Functions Of The Shop And Establishment Act?

The act is involved in the supervision of working hours, rest intervals for employees, opening and closing hours, closed days, national and religious holidays, overtime work, annual leave, maternity leave, sickness, and casual leave, etc.

What Aspects Are Regulated By The Shop And Establishment Act?

It is important to understand various aspects that are regulated by the Shops and Establishment Act.

Shop And Establishment License

  • Hours of work
  • Interval for rest and meals
  • Prohibition of employment of children
  • Employment of young person or women
  • Opening and closing hours
  • Close days
  • Weekly holidays
  • Wages for holidays
  • Time and conditions of payment of wages
  • Deductions from wages
  • Leave policy
  • Dismissal
  • Cleanliness
  • Lighting and ventilation
  • Precautions against fire
  • Accidents
  • Record keeping

What Is The Meaning Of “Commercial Establishment”?

The definition of the Shop and Establishment act includes the words commercial establishment, thus it is important to understand the meaning of it.

As per the Act, the commercial establishment is –

  • Any commercial sector such as banking, trading, or insurance establishments
  • Any establishment where individuals are employed pr engaged in office work or are service providers
  • Hotels, eateries, and boarding houses, cafes or refreshment houses
  • Amusement and entertainment places such as theaters and cinema halls

Benefits of Shop And Establishment License

What Are The Benefits Of Obtaining A Shop And Establishment License?

Following are certain benefits of a license acquired by shops, establishments –

  • It provides a legal right to start a business
  • It helps in the creation of a current business account
  • It boosts that smooth functioning of the business activities
  • The businesses receive several benefits from the Government

Eligibility Requirements For Shop And Establishment Act

What Are The Eligibility Requirements For That Shop And Establishment Act?

The following are certain requirements that are required to be considered eligible to obtain the shop and establishment act.

  • Shops and establishments of wholesalers or retailers
  • Service centres
  • Hotels
  • Amusement parks
  • Theaters
  • Warehouses, godowns, and similar places
  • Restaurants

Shop And Establishment License

A license is a permit that allows the individual to carry out business activities legally by following prescribed rules and regulations. Obtaining a license is significant before undertaking any business activity. In order to acquire a license for a shop or establishment, the individual must apply for its registration. It is significant to note that every state has different rules with regards to the registration of a shop.

Delhi Shop And Establishment Act Registration

The shop, establishments, and commercial establishments that are commencing business in New Delhi must obtain shop and establishment act registration. Following are steps which must be followed in a proper manner –

  • The name of the employer and the manager
  • The postal address of the establishment
  • The name of the establishment
  • The category of the establishment, whether it is a shop, commercial establishment, hotel, restaurant, eating house, theatre or other places of public amusement or entertainment;
  • The number of employees who will be a part of the establishment

Benefits of Shop And Establishment License (2)

What Is The Registration Process To Obtain The Shop And Establishment License?

The registration process involves several steps, which must be followed by individuals who want to start a business.

Filling And Submission Of The Application Form

The first step in the registration process is the filing of all the required details in the form and submitting the form.

Submission Of Documents

All the documents required by the authority must be prepared and submitted to the authority.

Inspection Of The Form And Documents

The authority, upon receiving the form, evaluates it on the basis of their requirements. If all the requirements are met, the form is approved by them.

Issuance of License

After an evaluation, the license or certificate of registration will be issued to the applicant

Documents Required For Shop And Establishment Act

What Documents Are Required For The Shop And Establishment License?

The following are certain documents that must be prepared and submitted to the authority before the prescribed duration.

  • Employer’s identity proof. The ID proof can be in the form of Aadhar Card, PAN (Permanent Account Number) Card, Driving License, Voter ID.
  • Employer’s passport-sized photograph.
  • Photo of the Establishment or Shop.
  • A copy of Rent Agreement or Lease Deed is required if the property is rented.
  • A list of Utility Bills which could be in the form of Electricity Bill, Water Tax Receipt of the working premises. The utility bill that is submitted must not be two months older.
  • If the business is a Trust, a list must be presented that contains the total number of Trustees.
  • Memorandum of Association (MOA) that contains all the details must be submitted
  • If the business is aCo-operative Society, a list that contains details of the Members must be submitted.
  • Partnership deed with all the information in detail with regards to the firm’s name and signature of all the partners along with the share percentage of each partner.
  • A copy of the permission granted by RBI (Reserve Bank of India).
  • A copy of the Certificate of Incorporation (COI) issued under the Companies Act, 2013.
  • A copy of the COR (Certificate of Registration) granted by the Charity Commissioner.
  • A Resolution that prescribes a list of Designated Directors.
  • A Resolution with regards to the commencement of the society’s business.
  • Transportation Permit is s necessary requirement and thus it must be acquired
  • FSSAI license and Drug license must be acquired by the applicant
  • A copy of the permission granted by the collector is a crucial requirement.
  • NOC (No-Objection Certificate) issued by the Police Department for the opening of a Cybercafe.
  • IEC (Import Export Code) certificate.
  • NOC (No-Objection Certificate) which will be issued by the Municipal Corporation.
  • Excise License is required if the business is of a beer bar, restaurant, or a wine shop.
  • A Certificate issued by the SEBI (Securities Exchange Board of India) to the Share Broker.
  • A license issued by the Police Department for the establishment of Security Services.

Shop Establishment Act


Every business that falls under the category of a shop or establishment must follow all guidelines to obtain a shop and establishment license. Only after acquiring a license, the business can function and undertake business operations within particular states.