Navigating Licenses and Taxes for a WFH Setup Without Physical Offices in Mumbai: What Should We Do?

Dear members, We are a Mumbai-based company with about 130 employees and branches in three cities: Kolkata, Bangalore, and Delhi. Recently, due to the demerger of certain business lines, each branch now has only one employee, except for Kolkata, which has two. Currently, all employees are working from home (WFH), and we have surrendered the rented office premises. We do not plan to hire office space for these branches.

Question on Licenses and Registrations

My question is, what should we do with the Shops and Establishment License, Trade License, and Professional Tax registration, considering we do not have a physical office?

Before the WFH situation, we had offices in the mentioned cities, and our registrations/payments are still based on that setup. I kindly request your guidance on this matter.

In the scenario of transitioning to a work-from-home (WFH) setup without physical office premises, there are important considerations regarding licenses and registrations like the Shops and Establishment License, Trade License, and Professional Tax registration. Here are the steps you should take:

1. Shops and Establishment License:
- Contact the local authorities in each city (Kolkata, Bangalore, and Delhi) to understand the regulations regarding the Shops and Establishment License for remote working setups.
- Check if there are provisions or exemptions for businesses operating without a physical office but with employees working from home.
- Update your license information based on the current operational structure to ensure compliance.

2. Trade License:
- Similar to the Shops and Establishment License, review the requirements for Trade Licenses in the respective cities.
- Seek clarification on whether a Trade License is necessary for businesses with no physical presence but remote working employees.
- Make any adjustments or updates to your Trade License status as per the regulations.

3. Professional Tax Registration:
- Consult with the appropriate authorities to determine the implications of remote working on Professional Tax obligations.
- Verify if there are specific guidelines for companies with employees working from home and how it affects Professional Tax registration.
- Update your Professional Tax registration details accordingly to align with the current operational setup.

4. Compliance Review:
- Conduct a comprehensive review of all registrations and licenses to ensure they reflect the current business structure accurately.
- Stay informed about any changes in regulations or guidelines related to remote working to maintain compliance.
- Seek legal advice if needed to address any specific concerns or uncertainties regarding licensing and tax obligations in a WFH environment.

By proactively addressing these license and tax considerations, you can ensure regulatory compliance and mitigate any potential risks associated with operating a WFH setup without physical office premises.