Running Two Businesses Under One Roof: Should We Register Both Under the Shop and Establishment Act?

Dear All,

We are running a private limited company and a proprietorship in the same premises. The private limited company is 3 years old, and the proprietorship is 15 years old. The employee strength is 16 in each organization. We are not registered under the Shop and Establishment Act (S&E Act).

Q1. What are the implications of the above facts?
Q2. If I take up the process of registration, should I register one or both organizations?

The registration of the Shop Act is required if you are into trading or services within the ambit of the definition of a shop or commercial establishment. If any manufacturing activity is carried on, then a Factory license is required. You can register it prospectively. If you are abiding by the rules of maintenance of muster roll, wage register, hours of work, closing and opening time, etc., then there would be no issue. Depending on the activity, you can register them as one or two separate entities.

These are two different entities, and if it's not covered under any other Act like the Factories Act, you should go for registration of both separately. Since both are already running firms, you may have to face penalties for the delay in registration, but there is no problem in registering prospectively.

Dear Mr. Smrit,

You need to register both companies under the Shop and Establishment Act. In case of a delay in registration, you may need to pay a penalty.

For further assistance, please contact Mr. Vinodh at 0989461 0088 or email vinodh@armss.in.

We have expertise in labor laws in various states in India. ARMSS is likely the only integrated HR services provider offering corporate customers an end-to-end solution.

Dear Smriti,

Please go through the following provisions of the Act for this purpose:

Chapter I - Section 2, Sub Section (3), (5), (6), (17) read with Chapter II - Section 4 and Chapter VIII of the Rajasthan Shops & Commercial Estt. Act, 1958, [Labour Department](http://labour.rajasthan.gov.in/ActsAndRules.aspx).

For further guidance, study this [link](link no longer exists - removed).

Thank you.