One of the key guidelines to which most of the businesses in India are subjected to is the Shop and establishment act, which is followed by every state in India.
This Act is designed in order to regulate -payment of wages, number of working hours, holidays, terms of service and other work conditions for people employed in shops.
So,’ If you own a shop and you don’t have a shop registration’, then it’s very important to get the shop registered in the respective state that you live in India.
‘Shop Registration ‘in India can be advantageous in many ways. It can be done in terms of -:
- A Business Entity
- A startup
- An MSME enterprise
- Establishment Act with respect to different states of India.
Now, let us discuss these points in detail-:
To Register as a Business Entity.-:
Registration of the shop as a Business entity can be done as a Private Limited Company, LLP, Partnership, and OPC etc. it is quite simple visiting the Ministry of Corporate Affairs website and filling the application using an online portal for registration.
If you open a shop, then you are officially accountable for all aspects of your business, including any debts and losses. But a company is a separate legal entity and it is an easy way to protect your personal assets from your business actions.
Registering a company helps enormously when there is a clash between founders. When you register a company, the company owners are limited to the number of shares purchased.
The owners will have a clear understanding that their investment in the company is determined by the number of shares they own and not by any pre-registration verbal or written promises.
To Register as a Startup-:
If you choose to register your shop as a Startup, First, you need to get Registration as Business Entity and then visit the startup India website–to complete the formalities for registration.
Registering your shop as a startup can be beneficial in many ways and few of them are -:
- Simple and less costly Business registration,
- Ease in raising funds for business,
- Recognition as a legal entity
- Low tax liability.
To Register as an MSME Enterprise-:
In order to register your shop as an MSME Enterprise, you need to visit the Udyog Aadhar website and File an application for Registration and upload all documents to complete the Registration process.
The MSME registration is not constitutional. However, the MSME registration process in India has been framed to provide maximum profits to all types of enterprises.
Some of the benefits from Central Government includes- Easy sanction of Bank loans, lower rates of interest, excise exemption scheme, exemption under Direct Tax Laws and legal support such as- reservation and the interest on Delayed Payments Act.
To Register as an Establishment Act-:
Registering your shop under a ‘Shop And Establishment Act’ can be done by visiting the website or the State government office to complete the Registration Formality in a method that is approved by the State Government.
Following documents should be carried during registration -:
- Pan Card
- Aadhar Card
- Voter ID Card
- Driving License
- Ration Card
- Electricity Bill
- Water Bill
- Partnership Deed
- Rent Agreement
- License and permits that are required by particular shops
- FSSAI License In Case of Food Shop.
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
This method of registration can be beneficial in Opening – A Current Bank Account with less legal fulfillment that needs to be followed.
Shop and Establishment License is compulsory to be displayed at all Shops.
Registration of any business/a shop is the act of incorporating it under a particular authority. It is an essential phase that is just as crucial as obtaining a business license.
It is a necessary legal process and entity that must be conducted within most jurisdictions.
Hence, Registration for any company /shop is compulsory for its long-run.