Shop and Establishment License

Shop and Establishment license in Bihar- Every shop and establishment needs to register itself compulsorily under Shop and Establishment Act within 30 days of commencement of work. Governed by the Labour department of the state, the Shops and Establishments Act institutionalized the ambience and the state of the work environment and also establishes the privileges the employees are allowed by their company or the management. This is best suited for shops all across India, every benefit making foundations, lodgings, bistros, eating circles and joints, eateries, cinemas and for all public places of entertainment. It is a must for every shop and foundation to enlist oneself within 30 days of commencing under this act irrespective of the business being fully functional or not.

A Shop and Establishment License is a legal requirement for all businesses operating in Bihar, India. The license is issued by the Labour Department of Bihar and is governed by the Bihar Shops and Establishments Act, 1953. The license is mandatory for all businesses, including shops, commercial establishments, and residential hotels, operating within the jurisdiction of Bihar.

Meaning and Definition: A Shop & Establishment License is a legal permit issued by the government that allows businesses to operate within the state of Bihar. The license ensures that the business operates under certain rules and regulations and ensures that the workers in the business are protected under the labour laws of the state.

Legal Provisions: The Bihar Shops and Establishments Act, 1953, governs the Shop & Establishment License in Bihar. The act provides rules and regulations that businesses must follow to obtain and maintain the license. The act also ensures that businesses follow the labour laws of the state, such as working hours, weekly holidays, and wages.

Process: The process of obtaining a Shop & Establishment License in Bihar involves the following steps:

  1. Filling out the application form: The application form for the license must be filled out with the required information, such as the business name, address, and details of the employees.
  2. Submission of documents: The application form must be submitted along with the required documents, such as proof of identity and address of the business owner, proof of address of the business, and details of the employees.
  3. Inspection: The Labour Department of Bihar may conduct an inspection of the business premises to ensure that the business is operating in compliance with the labour laws of the state.
  4. Payment of fees: The applicant must pay the required fees for the license.
  5. Issuance of the license: Once the application is processed and the inspection is completed, the Shop & Establishment License is issued to the applicant.

Advantages: The Shop & Establishment License provides several advantages to businesses, such as:

  1. Legal compliance: The license ensures that the business operates in compliance with the labour laws of the state.
  2. Employee protection: The license ensures that the employees of the business are protected under the labour laws of the state.
  3. Better credibility: The license can enhance the credibility of the business as it demonstrates that the business operates under certain rules and regulations.

Disadvantages: The Shop & Establishment License does not have any significant disadvantages. However, the process of obtaining the license can be time-consuming and may require additional paperwork.

Cost involved: The cost involved in obtaining a Shop & Establishment License in Bihar depends on the number of employees in the business. The fees for the license vary from Rs. 100 to Rs. 2500, depending on the number of employees.

Time involved: The time involved in obtaining a Shop & Establishment License in Bihar can vary depending on the Labour Department’s workload. Generally, it takes around 7-15 working days to obtain the license.

Documents required: The following documents are required to obtain a Shop & Establishment License in Bihar:

  1. Proof of identity and address of the business owner
  2. Proof of address of the business
  3. Details of the employees, such as name, address, and age
  4. PAN Card of the business owner
  5. Rent agreement or ownership proof of the business premises.

Eligibility Under Shop And Establishment Act

Get to know what commercial establishment meaning is. The definition of a ‘Commercial Establishment’, as given in the Act is:

  • Any commercial sector, such as banking, trading or insurance establishments
  • Any establishment where individuals are employed or engaged to do office work or provide service
  • The hotels, eateries and boarding houses or a smaller café or refreshment house
  • Amusement and entertainment places such as theatres and cinema halls or amusement parks

All such above mentioned commercial establishments come under the Act and need to adhere to the norms and regulations set by the Act for the treatment of their employees.

The exceptions to the Act vary in the States and each State has given a list of shops and establishments act that come into the Act, and who require the registrations under the Act to run their business in the State.

Advantages of the Shop and Establishment License or registration

It helps in opening a current account: It can help an individual to open the current account with the bank by getting this certificate from Chartered Accountant.

Smooth inspector visits: Any inspector from the state government or local municipality visits the premises of your office, then you can easily flow from his trap as you are already registered.

Documents required for Shop and Establishment License in Bihar:

Some states have a 100% online process or some states are still following the manual procedure. Since, Shops and Establishment is a state matter and hence, documents and fees criteria differ from state to state. However, the following are a set of documents, which are almost necessary for every state:

  1. Copy of Pan card, Aadhar of Proprietor or partners or directors or members
  2. Copy of MOA, AOA, COI, Pan of Company or,
  3. Copy of Partnership deed and Pan of Partnership firm or LLP,
  4. Copy of Electricity bill, Municipal Tax Receipt of Office
  5. Copy of rent agreement (if office office is on rent)
  6. Photograph of Office

Registration procedure for the Shops and Establishment Act

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The following is the registration process for the Shops and Establishment license:

1. Check Applicability– Once you have started your business, then the first thing you must do is to check for necessary licenses. Almost within 30 days from the date of commencement of any business, the employer of the commercial shop/establishment should send an application to the inspector in-charge.

2. Procurement of Documents and Filing of Application– You are required to arrange all the necessary documents (list of documents required mentioned above). The application should be in the agreed form. Moreover, the employer should submit it along with the given fees. The Shops and Establishment Act is a state actor and hence, the process for each state is different. Indeed it depends on the type of establishment/business and the state in which you are applying for registration. On the satisfaction of the inspector in-charge, the registration of the Shops and Establishment will be successful and the employer will get a registration certificate. Prominently, the registration certificate must be displayed at the establishment, and the employer is required to renew the license periodically as per respective state law

Process for cancelling the license registration

The following is the procedure, in case you are looking to cancel your shops and establishment Act license.

  • The prescribed form for the cancellation of application should be filled in fully and coherently.
  • The same should be applied within 10 days of actual closure of the establishment.
  • The registration number of the establishment should be mentioned on the cancellation form including the name, business address and other relevant information.
  • The reason for cancellation of the license must be mentioned in the application form.
  • Make sure the reasons cited for cancellation are valid
  • Finally, a copy of Paid Legal Dues of Employee(s) should also be attached.

FAQs (Frequently Asked Questions)

Qus:-What are the major details that are to be filled in Application Form?

Application form for shop and establishment certificate would contain details like-

  • Name of the establishment
  • Address of establishment
  • Full name of the employer
  • Category of establishment
  • Nature of business
  • Name of the manager
  • Date of commencement
  • Employee details

Qus:-What records to be maintained by a shop owner after registration?

Following record should be maintained –

  • Working hours.
  • Rest period
  • Leave taken
  • Leave with wages
  • Fines
  • Salary

QUS:-What is the objective of the Shops & Establishments Act?

Every Indian state has enacted certain rules and regulations with regard to conditions of work. The objective is to secure uniform benefits for employees working in different establishments, from shops, commercial establishments and residential hotels to restaurants, theatres and other places of public amusement or entertainment.

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