All those businesses which operate commercially even if it operates form home needs get registered under shops and establishment as per the applicable rule and regulation of the state concerned act. This act comes in to the existence in year 2016 .
Shop & Establishment registration: A Detailed Guide
Applying for FSSAI made Simple & Easy
Most of the businesses in India, including shops, restaurants, cafes, etc., are regulated under the provisions of the Shop and Establishment Act. To regulate the work environment and to ensure the rights of the workers are being protected, It is mandatory to get your business registered under the Shop and Establishments Act. For any new business or shop, we need to obtain Shop & Establishment registration within 30 days of commencing operations under the respective state act. The application will submit to the local municipality of the concerned state. All those businesses which operate commercially even if it operates form home needs get registered under shops and establishment as per the applicable rule and regulation of the state concerned act. This act comes in to the existence in year 2016 for regulating premises wherein any trade, business, or profession is carried out. This act is regulated by the department of labor. It not only regulates the working of commercial establishment but also societies, charitable trust, printing establishment, education institutions run for gain and premises in which banking, insurance, stock, or share brokerage is carried on.
As per the Act, the establishment includes shops, commercial establishments, residential hotels, restraint, eating houses, theatres, or other places of public entertainment and also those establishments as notified by the State government in the official gazette.
This act comes in the ambit of state legislation so the provision may differ from state to state. All operating shops and commercial establishments within each state are covered by the respective Shop & Establishments Act. A premise where goods are sold either by retail or wholesale or where services are rendered to customers is termed as a shop under this act. Establishments is defined by the act, may also include such other establishments as defined by the Government by notification in the Official Gazette.
Eligibility to Obtain a Shop and Establishment License in India
- Wholesalers or the retailer's shops and establishments
- Service Centres
- Warehouses, Storerooms, and go-downs
- Additionally, any other working places
- Hotels
- Eateries and restaurants
- Entertainment houses, Amusement parks, Theatres, etc.Bottom of Form
Benefits of Obtaining Shop and Establishment License
Legal Recognition: The Shops and Establishment license provides legal recognition to the respective establishment/shop.
Government Benefits: If you obtain the shop act registration, then you can easily avail the government benefits.
Lifetime Certification: Shop Act registration gives you the lifetime valid certificate, so it is not required the renewal cost and its just one time cost for the same.
Acts As A Business Proof: For further business registration in India, the Shops and Establishment license acts as a business proof.
Business Banking Account: According to RBI regulations, every business must have a separate business account to manage its money. This business account may only be created with a certificate issued under the Shops and Establishments Act.
Encourage Expansion: A company owner who is 100 percent committed to following the Shop Act’s compliances will be able to reinforce the entity’s root in the market by giving it legal status, which will help the business owner to attract exposure to newer segments of consumers and client base over time.
List of documents required for IEC registration
Private Limited Company
- Certificate of Incorporation, MOA, and AOA
- PAN Card of Company
- PAN card & Aadhaar/DL/VoterID
- Address Proof of Company
- A photo of the shop along with the employer.
- Shop & Owner's photographs
LLP / Partnership
- PAN Card of LLP/Partnership Firm
- LLP Certificate / Partnership Deed
- Partners Pan & Aadhaar card
- Address Proof of Company
- A photo of the establishment/ shop along with the employer
- Shop & Owner's photographs
Individual/Proprietorship
- PAN Card of proprietor
- Aadhaar/DL/VoterID of Proprietor
- Address proof of Shop
- Shop & Owner's photographs
Penalties for Shop and Establishment Act
It is compulsory for the entire establishment under the Act to obtain Shop and Establishment registration and comply with all the rules and regulations prescribed under the Act. However, in case of any failure in getting registration and following the rules and regulations of the Act, the establishment would be liable to pay the penalty. The amount of penalty would vary from state to state.
| Types of licenses | FSSAI Central License | FSSAI State License | FSSAI Registration |
|---|---|---|---|
| Eligibility in terms of Turnover | Above ₹20 crores annually | Annually ₹12 lakhs to ₹20 crores | Less than ₹12 lakh annually |
Advantages of FSSAI License
Legal Advantage The cost of penalty imposed if not registered with FSSAI Department is much lower than the Registration Fee.
Business Expansion FSSAI License helps to grow your business and opening up new branches as the license qualifies you to get the reputation and qualification for your business growth
Consumer Trust An FSSAI logo is a mark of validity and an assurance to your consumers that the food is safe to consume and a certified product is more likely to be picked off the shelf than unregistered vendor
Standardization: FSSAI laid down its standards and sub-standards to supervise and regulate the FBOs with the goal that safe food can be reached in the market for consumption purposes.
Business Expansion: The goodwill of the Food Safety Management Systems (FSMS) will make a business available and effortless to expand.
Use of FSSAI Logo: The use of FSSAI logo on your product will normally create goodwill trust worthiness amongst the consumers.
Government Funding and Loans: The FSSAI registration will offer the privileges of Government Funding and Loans that can be easily accessible for the business operators
Penalty for Not Registering
A food business operator (FBO) who runs their business without registering under FSSAI may face imprisonment and an FSSAI licence penalty of up to ₹5 lakhs for the same.
| Form of Business | PRIVATE LIMITED COMPANY | ONE PERSON COMPANY | LLP | PARTNERSHIP FIRM | PROPRIETORSHIP FIRM |
|---|---|---|---|---|---|
| Recommended For | Startups & Growing Companies | Sole Promoters | Professional Services Companies | Small Businesses Firms | Small Traders, Agents & Manufactures |
| Prevailing laws | Companies Act | Companies Act | LLP Act | Partnership Act | NA |
| Charter Documents | MOA & AOA | MOA & AOA | LLP Agreement | Partnership Deed | NA |
| Limit of Members | 2-200 | 1 | 2-Unlimited | 2-20 | NA |
| Separate legal identity | Yes | Yes | Yes | NO | NO |
| Limited Liability | Yes | Yes | Yes | NO | NO |
| Tax Advantage | High | High | Low | Low | Low |
| Annual Statutory Compliances | High | High | Low | Low | Low |
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FAQs
Simplified Performa for Incorporating Company Electronically, also known as SPICe, was introduced in the year 2016 for the purpose of incorporation of the companies. Under the Ease of Doing Business (EODB) initiative, the MCA released the new form SPICe+ to further ease the company incorporation process. The new SPICe+ form encompasses more features than the earlier SPICe form. Name approval is integrated as part of the SPICe+ form. The AGILE form has been converted to AGILE Pro to provide GSTIN / ESIC / EPFO / Bank account as well along with company incorporation. Apart from that, even after affixing DSC in the form, information can be modified in the SPICe+ form.
After the introduction of the SPICe+ form, the name approval has been integrated with SPICe+. Part-A of SPICe+ is for name approval. Therefore, from 15th February 2020, the RUN form can only be used for a change of name.
Company Limited by Shares: The liability of the shareholders is limited only to the amount that is unpaid on the shares held by them. Company Limited by Guarantee: A company having no share capital where the liability of the shareholders is limited up to the amount undertaken to be contributed by them in the event of liquidation of the company.
Yes. private limited companies are eligible for attracting foreign direct investments in compliance with the relevant laws and regulations.
DIN, also known as Director Identification Number, is an identification number of a person intending or has become a director in a company. DPIN, also known as Designated Partner Identification Number, is an identification number for a designated partner in LLP. It is similar to DIN in the case of companies. DIN and DPIN are issued by the Ministry of Corporate Affairs.
Yes. Even a foreign national can become a director in a private limited company.
As per the Companies Act, 2013, only an individual natural person can become a director in a company. Therefore, neither a company, firm, or association can become a director in any company. This is to ensure the fixation of duties and responsibilities that would be difficult in the case of companies and firms becoming directors.
The private limited company registration cost depends upon various factors like authorized capital, number of directors, etc. Initiate your Pvt. Ltd. Company Registration with eAuditor Office as your partner in corporate compliance! Reach out to us for any professional assistance.