An Overview of Karnataka Shops and Commercial Establishments Act 1961

An Overview of Karnataka Shops and Commercial Establishments Act 1961

What is the Karnataka Shops and Commercial Establishments Act?

Every state in India enforces a set of rules on all the shops and commercial establishments that are operating under its jurisdiction, hence as the name suggests, The Karnataka Shops and Commercial Establishments Act, 1961 governs various shops, commercial establishments, and other similar establishments located within the state of Karnataka. The broader aim of the Act is to govern the employment and various aspects of employee working conditions, leave applicability, Statutory registers and returns, and other set of rules in the state.

What is the purpose of the Karnataka Shops and Commercial Establishments Act?

The Karnataka Shops and Commercial Establishments Act serves many purposes. Here are a few of the main highlights:

• Employee Welfare: The act aims to safeguard the rights and interests of employees by establishing regulations related to working hours, rest intervals, overtime,spreadover leave applicability,statutory registers, periodical returns and other aspects that directly  have an effect with their working regulatories.
• Standardization: By setting uniform standards for various aspects of employment, such as opening and closing hours, weekly rest days, engagement of women during night and holidays, the Act promotes consistency and fairness in the treatment of employees across different businesses and industries.
• Child Labor Prevention: The Act includes the clauses that prohibits the employment of children, ensuring that young individuals are not engaged in work that could potentially harm their health, education, and overall development of the child.
• Facilitation of Inspections: Regulatory authorities are empowered to conduct inspections of establishments to ensure compliance are adhered as stipulated  in the act . This helps to compliant on businesses and prevent violations if any.
• Employer Accountability: The Act holds employers as accountable for adhering to prescribed regulations and standards. Employers are required to maintain records, registers, periodical returns, and documents related to employee attendance, wages, and other relevant information.

Is Karnataka Shops and Commercial Establishments Act applicable to you?

As the Act provides the regulation of conditions of work and employment in Karnataka, it applies to the Shops and Commercial Establishments within the state. For better clarity, it is important to understand the definition of ‘Shops’ and ‘Commercial Establishments’. The official website of the government defines the two terms as:

• Shops: “……any premises where any trade or business is carried on or where services are rendered to customers and includes offices, storerooms, godowns, warehouses, whether in the same premises or otherwise, used in such connection with such trade or business, but does not include a commercial establishment or a shop attached to a factory.”
• Commercial Establishment: “….a commercial or trading or banking or insurance establishment, an establishment or administrative service in which persons employed are mainly engaged in office work, a hotel, restaurant, boarding or eating house, a café or any other refreshment house, a theater or any other place of public amusement or entertainment.”

Subsequently , if your business falls under any of aforementioned categories, rethe Karnataka Shops and Commercial Establishments apply to it.

Are there any industries which are exempted from Karnataka Shops and Commercial Establishments Act?

Yes, there are certain industries that are exempted from the Karnataka Shops and Establishment Act. These entities are mainly government bodies, medicine shops, banking corporations, etc. Here’s the complete list:

• Offices of or under the Central or State Governments or local authorities, except commercial undertakings.
• Any railway service, water transport service, postal, telegraph or telephone service, any system of public conservancy or sanitation or any industry, business or undertaking which supplies power, light or water to the public.
• Railway dining cars.
• Establishments for the treatment or care of the sick, infirm, or the mentally unfit.
• Offices of legal practitioners and medical practitioners with less than three employees.
• Offices of banking companies
• Shops dealing mainly in medicines or medical or surgical requisites or appliances
• Clubs, residential hotels, boarding houses, hostels attached to schools or colleges, and establishments maintained in boarding schools in connection with the boarding and lodging of pupils and resident-masters.
• Smaller retail establishments: stalls, and refreshment rooms at railway stations, bus stands, ports or aerodromes; barber shops, meat shops, shops selling items for funerals,  pan (betel leaf) shops; cinemas, theaters and other places of public entertainment, stalls and refreshment rooms attached to cinemas & theaters, tanneries, brick and lime kilns.
• Shops in regimental institutes, garrison shops and troop canteens in cantonments
• Oil-mills and flour-mills not registered under the Factories Act,1948

Registration under Karnataka Shops and Commercial Establishments Act?

If the Karnataka Shops and Commercial Establishments is applicable to your business, you are required to register with the state government. Obtaining the registration is mandatory for the Shops and Commercial Establishments to operate your business and every shop and commercial establishments shall obtain the registration certificate within 30 days from the commencement of the business.

Kindly note, the term ‘license’ is used interchangeably with ‘registration’ but there is no such legal document as ‘shop act license’ or ‘shop and establishments license’. All such terms refer to the registration under the Shops and Commercial Establishments Act.

What is the procedure for registration under the Karnataka Shops and Establishments Act?

The registration certificate shall be obtained online through the Ekarmika website.  You can submit the required information and upload a few mandatory documents to start the registration process. Here’s the list of required documents:

• Form – A (Prescribed Format).
• Authorized person / Occupier – Email ID, Mobile Number, Aadhaar and PAN card
• Rental / Lease Agreement / Own premises – Property Tax / Address proof
• Certificate of incorporation / Memorandum of Articles

You are also required to pay the registration fee as per the number of employees in your shop or establishment. Refer the below table to find out the applicable fee:

Once approved, you can download the registration from the same website.

Suggested: Read the complete online registration process under the Karnataka Shops and Commercial Establishments Act

We can help you to obtain registration certificate effortlessly?

TeamLease HRtech is into the Compliance space for 20+ years. We are well versed with liaisoning activities in terms of obtaining all related registrations and licenses from the Labour department perspective. TeamLease will ease the process and place adequate requirements to our esteemed clients and obtain the Registration certificate within the time stipulated in the act. So, Fill the below given form to contact us.