10 Top-Asked Questions About Shop License Renewal

Meeting the Shop and Establishment Act means staying compliant from registration to the license renewal. As the shop and establishment license is a prerequisite before establishing any commercial entity, the renewal of the license is also important. Take into consideration these ten frequently asked questions about license renewal to avoid confusion:

Q 1: Is it compulsory to renew the shop and establishment certificate?

Ans. Yes, after the approval of the license, it is valid for a specific timeline. Therefore, to keep the operations continuing and adhere to the state’s compliance, the renewal of the shop license is mandatory. The license holder must register for renewal before the license expires. Every state has its own renewal schedule because the certificate is state-wise. 

Q2: How long does the Gumasta (or Shop) license last?

Ans. The timeline of the shop license or Gumasta license online validity varies from state to state. Generally, it ranges from 1st year to 5 or 10 years. In big states like Delhi and Karnataka, the license is usually active for five years. Go through the top states list with their shop establishment certificate validity:

Q3. When should you apply for the renewal of the shop license?

Ans. An instant renewal application will be rejected by the authority, and a late submission fine will be issued. As a result, a certain number of days or months before the current license’s expiration, registered establishments must apply for a Shop Act license renewal. In some states, the renewal application must be filed at least thirty to sixty days before the expiration of the current license. On-time renewal helps to avoid the unnecessary late fine penalty. 

Q4. Can you renew your shop license digitally?

Ans: Yes, many states’ labor departments have established their own online websites. The renewal process can be done through these online websites.

Q 5. What documents are required during the license renewal process?’

Ans: Multiple documents are required to be attached to the shop license renewal application form. The supported copies that must be:

• The copy of the current shop establishment certificate

• The updated address proof. It provides a rent agreement or sale deed (if the entity rented) or ownership proof (if owned).

• PAN card copy of the proprietor/partner/director for identification proof. 

• The government-issued ID is also required, such as a voter ID, Aadhaar card, or driving license.

• The authorized signatory’s recent photographs.

• Complete and updated details of all employees. The record of employment is also needed.

Q 6. What are the consequences for missing the renewal deadline?

Ans: Failure to fulfill the shop license renewal requirements or missing the renewal deadline may lead to financial penalties, including legal complications and a significant chance of business shutdown. The state government must be stringent on the set laws. Therefore, under the Shop and Establishment Act, the renewal of the certificate is mandatory. Meanwhile, the major consequences for missing the deadline include:

• Late fine charges
• Increased fees for the regular renewal cost
• Seizure of the work operation
• Business registration will be canceled, causing permanent closure
• Business management disruption due to financial loss
• Face criminal charges or lawsuits for operating without a license.
• The business reputation damage 
• Loss to the government and private tenders

Q 7. How is the Shop Act license renewal cost calculated?

Ans: The cost of the license renewal is calculated on the basis of the business location, such as whether it comes under state or municipal jurisdiction, including the nature of the trade.

For instance, in Madhya Pradesh, renewing a shop certificate costs Rs 100 if there are no employees. For 1 to 3 employees, the renewal cost is Rs 150 and increases with the number of employees. In a similar way, the renewal cost in Haryana is Rs 5,000 if the number of workers is more than 10. The cost of renewing a license is also determined by the approved electricity load on the property. 

Q 8. What is the shop certificate registration cost?

Ans: The cost for the shop license varies from state to state. It also depends on the number of employees and the business nature, including establishment size. The major government cost varies from Rs 500 to Rs 15,000 or more. 

For example, in Delhi, the government charges for the small establishments can be Rs 500. 

Q9. Will an inspection take place when the Shop Act license is being renewed?

Ans: Your property may be physically inspected as part of the license renewal process. The inspection of the establishment is important for certain states or specific businesses. It is required to verify the specific state’s information in the application, whether it is true or not. 

Q 10. Is it necessary to obtain a separate license for multiple states?

Ans: Yes, for each different state, the businesses are required to obtain a separate license. A single shop establishment license does not apply to the other state. This is because each state has its own specific rules and regulations. Getting the different licenses is necessary to comply with the state’s labor laws. 

Learn More About: Grace Period and Penalties for Late Shop License Renewal