IT IS POSSIBLE IN INDIA TO START A BUSINESS WITHOUT SHOP ACT License

INTRODUCTION

One of the important regulation to which most businesses in India are subject to is the Shop and Establishment Act, enacted by every state in India. The Act is designed to regulate payment of wages, hours of work, leave, holidays, terms of service and other work conditions of people employed in shop and commercial establishments.

Any person who wishes to own the above-mentioned shops and business shall apply either online or offline to register the establishment within 30 days from starting the business. If all valid documents are found in place, the chief Inspector will issue the registration certificate. The application details the name of the employer and the establishment, the number of employees, the category of the shop, and all relevant details.

Once obtained, the registration certificate should be displayed in a visible place inside the premises of the shop. Usually, this certificate is valid for a 5-year period, after which it is to be duly renewed. If needed, the owner must make changes in the address, ownership, or employee database

PURPOSE OF SHOP AND ESTABLISHMENT ACT

The Shop and Establishment Act in India is promulgated by the state and may slightly differ from state to state. However, as per the Act, all shops and commercial establishments operating within each state are covered by the respective Shop & Establishments Act.

Shops are defined as premises where goods are sold either by retail or wholesale or where services are rendered to customers, and includes an office, a store-room, godown, warehouse or workhouse or work place.

Establishments are defined as shop, a commercial establishment, residential hotel, restaurant, eating-house, theatre or other places of public amusement or entertainment. Further, establishments as defined by the Act may also include such other establishments as defined by the Government by notification in the Official Gazette. However, factories are not covered by the shops & establishments Act and are regulated by the Factories Act, 1948.

MEANING OF AN ESTABLISHMENT FOR THE PURPOSE OF THE ACT

Establishments included in this Act are commercial establishments, residential hotels, restaurants, eating houses, theaters, or other places of public amusement or entertainment. Additionally, other establishments that the State Government may, by notification in the Official Gazette, declare to be an establishment for the purposes of this Act would then classify as establishments.

MEANING OF A SHOP FOR THE PURPOSE OF THE ACT SHOP MEANS ANY PREMISES:

• Where goods are sold, either by retail, wholesale, or

• Where services are rendered to customers.

• It includes an office a store-room, godown, warehouse or work place, whether in the same premises or otherwise, used in connection with such trade/ business. A shop does not include a factory, a commercial establishment, residential hotel, restaurant, eating house, theater or other place of public amusement or entertainment

DOCUMENTS TO BE SUBMITTED FOR REGISTRATION

• Identity or Address proof of the owner like the Aadhar card, Driving license, or the voter’s ID,
• PAN card of the Proprietor
• Passport size photo of the proprietor
• SOP or commercial establishment address proof.
• A photograph of the commercial establishment along with the owner
• A rent agreement in case of a rented property.
• Incorporation certificate or the Memorandum of Article
• Authorization letter for an authorized signatory or Self-attestation letter in case of the owner

FEATURES OR BENEFITS OF THE SHOP REGISTRATION UNDER THE MSME ACT 2006?

a) Legal Entity Proof – Each shop or business required a legal entity proof like proprietorship firm or partnership firm etc. Shop Registration under the msme act 2006 provide a legal entity proof which gives the right for doing the business in your area or state for the same.

b) Business Bank Account – Every banks is required a legal entity proof to open a current bank account. Each shop have to open a separate bank account for the daily transactions as per the RBI Compliance. So on the basis of the shop certificate you can easily open a current business bank account.

c) Government Benefits – Each state have a DIC Department which create the policy in the respective state for the all small business. On the basis of Shop License Registration Certificate you can easily avail the government benefits.

d) Trustworthy – Shopkeeper are trader or wholesaler or any other type of business but all needs the trust from the customer. Shop Registration under the MSME Act gives you trust between the customers when you mentioned your license registration number on the invoice or shop board.

e) Lifetime Certification – Shop License Registration under the MSME Act 2006 gives you the lifetime valid Certification so its is not required the renewal cost. So it’s just only one time cost for the same.

REGISTRATION OF SHOPS & ESTABLISHMENTS

As a business owner of a shop or establishment, you are compulsorily required to get the same registered under the Shops and Establishment Act. Here are the specific rules:

1. Submit an application in the prescribed form to the Inspector of the area within 30 days of starting any work in your shop/establishment. The application is to be submitted along with the prescribed fees and should contain the following information:

a. Your name as the employer and the name of a manager, if any;

 b. The postal address of your establishment;

c. The name of your establishment;

d. Such other particulars as may be prescribed.

2. Upon receiving the application for registration and the fees, the Inspector shall verify the accuracy and correctness of the application. Once suitably satisfied, he shall enter the details in the Register of Establishments and issue a registration certificate of your establishment to you. This certificate will be valid for 5 years and has to be renewed thereafter.

(IT IS IMPORTANT THAT THE REGISTRATION CERTIFICATE HAS TO BE PROMINENTLY DISPLAYED AT YOUR ESTABLISHMENT)

Communication of Change to the Inspector

In case of any change with respect to any of the information given during the application for registration, the same has to be notified to the Inspector’s office within 15 days after the change has taken place. The Inspector will verify the correctness of the details furnished, make the related change in the Register of Establishments, amend the registration certificate or issue a fresh registration certificate, as he may deem fit.

Closing of Establishment to be communicated to Inspector

• In case the shop or establishment would like to close down the business, the occupier should notify the Chief Inspector in writing within fifteen days of the closing.

• The Chief Inspector after reviewing the request for closure can remove the name of the shop or commercial establishment from the register and cancel the registration certificate.