The Shops and Establishment Act in Delhi, Haryana, and Uttar Pradesh
Shops and establishment registration is a state-based license applicable to every business planning to set-up in India. The registration is an important labor law compliance that informs the business about the number of hours it can keep its employees working, and dictates other working conditions for employees.
In the Delhi National Capital Region (NCR), every entity established with the commercial purpose, including companies involved in trading and service, offices, warehouses, journalistic and printing establishments is required to obtain this registration. However, certain establishments such as theatres, cinemas, restaurants, eating-houses, residential hotels, and clubs are completely exempted.
Businesses must note that, since the Delhi NCR constitutes the capital city of Delhi as well as the satellite cities of Gurugram, Faridabad (Haryana state) and Noida (Uttar Pradesh state), three different state laws apply to different parts of the region. This mean, there is no uniformity in the statutory provisions and businesses have to comply with rules, procedures, and documentation process at a very granular level for each state separately.
For instance, while the theatres, cinemas, restaurants, eating-houses, and residential hotels are exempt under the Delhi Shops and Establishment Act, the branches of the same restaurant, hotels, eating-houses, and cinema fall within the purview of the Haryana Shops and Establishment Act, and must register in Gurgaon.
Businesses setting up in the region should review the shops and establishment law in each state to see which act best suits their business, while employers across the region need to ensure their HR policies are compliant.
How to register under the Act
Every state follows their specific registration process. However, all states require shops or establishments that commence operation in India to apply to the chief inspector of the area for registration within the stipulated time.
The application requires the submission of fees and documents prescribed by the state government. In general, the businesses are required to furnish the following documents and information:
- Permanent account number (PAN) of the proprietor;
- Address proof (Aadhaar, voter ID, or a driving license) of the proprietor;
- Proof of establishment (rent agreement, electricity or a telephone bill); and
- Details of employees and manager of the establishment.
Fees for registration depends on the type of establishment or on the number of workers employed.
Key provisions for employers
Below are some of the key provisions of the Shops and Establishment Acts in Delhi, Haryana, and Uttar Pradesh: