Small Trading Firm in Uttar Pradesh: Do We Need a Labor License and How to Get It?

We are a trading firm in Uttar Pradesh and have only 3 employees. Are we required to obtain a license from the labor department? If yes, under which act do we have to take it and what is the procedure? Please reply soon.

Labour Licence is issued under the Contract Labour (R&A) Act 1970. You are liable to take this Licence when you execute any work under a contract, and the said work is being executed on the premises or workplace of the company that awards the contract to you, with the help of 20 or more persons. This Licence is for that particular workplace only.

If you are a trader, this Licence is not applicable to you. You are liable to obtain a certificate under the Shops and Establishment Act. This certificate is also called a Gumasta Licence.

Regards

Thanks to both of you for your replies. But please tell me, what are the consequences if this license is not obtained? What demands and other penalties can the labor department impose?

It seems that instead of knowing the provisions of the Act applicable to your trading business, you are more interested in knowing about the consequences if a license is not obtained and the penalties that can be imposed by the labor department. It is for your information that the Act provides that any person found guilty of an offense under the Act shall be liable to a fine, which may, for the first offense, extend to one hundred rupees and for every subsequent offense, to five hundred rupees.

Please do not think of violating the law as it may seem cheaper in terms of money, as explained above, but it is actually much costlier in terms of harassment in attending court and paying the lawyer's fees for years together.

Regards,
BS Kalsi
Member since Aug 2011

Note that it is not actually 'license' but registration under the Shop & Commercial Establishment Act that is required.

Varghese Mathew

Thanks to both of you for your replies. But please tell me, what are the consequences if this license is not obtained? What demands and other penalties can the labor department impose?

Please keep in mind that this is a statutory obligation that needs to be followed. With regards to consequences, they can seal or attach the property for not abiding by the law or rules.