Understanding the Shop and Establishment Act: What Must New Companies Know About Compliance?

Rules and Regulations Under the Shop and Establishment Act

What rules and regulations should a new company follow under the Shop and Establishment Act? Specifically, what registers should be maintained, and what facilities should be provided to employees, such as washrooms and guardrooms? Please provide detailed information on these requirements.

Government Norms for Opening a New Assembling Unit

What government norms should be followed to open a new assembling unit?

Refer to the UP Shops & Commercial Establishment Act and Rules, which are clearly defined and based on the headcount; some compliance requirements vary. Clean washrooms need to be maintained. If you have 50 employees, you need to have a crèche.

If starting a new assembling unit, there are possibilities of the applicability of the Factory Act.

It gives the impression that your establishment falls under the Factory category, not S&CE, as per your description. Please provide the complete data of the establishment to advise further.

Thanks for the reply, seniors. As per your request, I am sending you the following details for correct information:

Our Business Model

We deal in the electronic vehicle segments (sales/service and spares). We buy e-rickshaws from other companies and sell them in the market from our showrooms where we also provide services and sell spares. Currently, my company is planning to open an assembling unit on a 10,000 sqft land where we will purchase all e-rickshaw parts, assemble them, and sell them under the name of our company.

Compliance and Legal Requirements

Based on the above details, what necessary steps should we take according to government norms? Also, do we fall under the shop or establishment act, or do we fall under the factory act?

Regards,
Sidharth

Hi Sidharth,

As per the current business scenario, sales of electric vehicles fall under the Shops & Commercial Establishment Act, and the service is considered a manufacturing process, which is regulated by the Factory Act. The classification depends on the headcount of the employees.

If a separate unit is established for assembling, it will also be governed by the Factory Act, and obtaining a Registration Certificate (RC) under the Factory Act would be necessary.

Dear Sidharth,

As per your inputs, the new assembly area may be treated as a factory. "Factory" means any premises, including the precincts thereof, where ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried out with the aid of power, or is ordinarily carried out in such a manner, or twenty or more workers without the aid of power. Therefore, the management has to obtain a license from the office of the Factory and Boiler.