Shop Act of India

The Shop Act of India is a scheme which looks after the registration of shops and establishments of each state. It is compulsory for any establishment to register itself as soon as possible. The Act is formulated in such a way so that it can regulate the following for the people who are employed in various shops and commercial establishments. These are:

  • Payment of the wages
  • Hours of the work performed
  • Leave and holidays
  • Terms and conditions of service

The article will cover the basics of the Shop and Establishment Act in India.


Shop and Establishment Act in India.

The category of the Shop and Establishment Act falls under the rule of the State Legislation. This means that every state has their own set of rules and regulations when it comes to the registration of the shop. For this reason, the rules and guidelines of the shop registration varies from state to state. It is controlled and looked after by the Labor Department of the state and carries out the profession, business or trade.


Besides involving in the regulations of the commercial establishments, this Act also covers the following:

  • Societies
  • Charitable Trusts
  • Printing establishments
  • The educational institutions which is profit-based and which carries out share brokerage, stock, insurance or banking within the premises.

The areas of concern covered by the Shop Act are as follows:

  • Accidents
  • Bonus wages for the holidays
  • Cleanliness in the establishment
  • Closed days or holidays
  • Conditions of the work
  • Employment of the youth and women
  • Fire or dismissal
  • Hours of opening and closing
  • Hours of the work done
  • Intervals for meals and rest
  • Keeping records
  • Leave for maternity and the benefits
  • Overtime work
  • Payment of the wages
  • Policy about leave
  • Prohibition of the employment of underage children
  • Safety from fire and precautions
  • Terms and conditions of service
  • Ventilation and lighting
  • Casual leave or call in sick


Premises Which Are Regulated By the Shop Act

The Shop and Establishment Act varies from state to state in India. But, it is still commonly mandatory for all shops and establishments to get their registration in due time as per the regulations of that state.


Generally, the place or premise where product are sold either through wholesale or retail and where the customers are provided with services are called shops. One of the important feature of shops is that it must have a definite place of selling. This can be anything from an office, warehouse or place of work, go-down or storeroom and so on.


Meanwhile, establishment ranges from regular departmental stores, commercial establishments, and restaurants, residential hotels, eating houses, theatres or any other places which offer public entertainment or amusement according to the Shop Act. Moreover, the establishment may also cover those other types of buildings or structures as mentioned in the Act which include the establishments of the government as notified in the Official Gazette. It should be mentioned, though, that the factories are not included in the Shop and Establishment Act. They are cared for in the Factories Act of 1948.


Area of Concern in the Shop and Establishment Act

The goal of the Shop Act is to make sure that the rights of both the employee and the employer is protected. Some of the main fields maintained by this Act as follows:

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

To know more about each entry of the above list, look up the regulations in each state as mentioned by the State Government.


Click here to learn about Karnataka Shop and Establishment Act

Click here to learn about Mumbai Shop and Establishment Act

Click here to learn about New Delhi Shop and Establishment Act

Click here to learn about Tamil Nadu Shop and Establishment Act


License According to the Shop and Establishment Act

Within the given time, all the shops and establishments are expected to get their registration done. The application for the registration is to be given to the Chief Inspector. The details that are to be submitted in the application are as follows:

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


After the submission of the form of application, the Chief Inspector will review it and register the establishment if all the documents are intact. Finally, he or she will issue the certificate of registration to the occupier. It is important to display the certificate of registration within the establishment and has to be renewed from time to time according to the guidelines of the Act.


If the shop or the establishment want to close down their company, it is very important to notify the concerned authority or the Chief Inspector within 15 days of the closing through a formal writing. After the Chief Inspector has properly reviewed and assessed the application of the closure, the shop will be removed from the list of the registered shops and establishments and cancel their certificate of registration as per the conditions of the Shop Act.


For any query regarding the Shop Act and the establishment license, visit our website CompanyVakil






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