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    All About Shops & Establishments Registration in Karnataka

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    (Source: virtualauditor)

    The Karnataka Shops and Commercial Establishments Act 1961 was introduced to regulate the working conditions of employees in commercial undertakings, shops, etc. These include regulating annual leaves with wages, working hours, employees' compensation and wages, women's employment and other aspects related to commercial establishments or shops in Karnataka. The registration of a company under this Act implies that the company is licensed to operate within the regional jurisdiction under the Labour Department.

    This piece discusses the details of the registration of shops and establishments in Karnataka. So, keep reading to learn more about it.

    Eligibility Criteria to Register Under Karnataka Shops and Commercial Establishments Act 1961

    Every commercial establishment and shop that operates a company, trade or service within the notified areas of Karnataka qualify to register under Karnataka Shops and Commercial Establishments Act 1961. Each business unit, including restaurants, theatres, shopping centres, stores, public entertainment hotels, retail stores, etc., should register under this Act within 30 days of commencement of business operation.

    Establishments Exempted From Registration Under the Karnataka Shops and Commercial Establishment Act

    • Offices of and under the State and Central Government or local authorities. However, these organisations do not include any commercial undertakings.
    • Services including railway, postal, water transport, telephone or telegraph, public conservation system, sanitation or any services or industry that provides water, power and light to the public
    • Railway dining cars
    • Organisations provide care or treatment to disabled patients and mentally unfit individuals.
    • Organisations of the food corporation of India.
    • Offices of medical and legal practitioners where only three people are employed.
    • Offices of the bank.
    • An individual employed in business from above 1 to 7 points.
    • An individual employed in a management position in an establishment
    • Individuals engaged in intermittent work such as drivers, ward staff, caretakers, etc.
    • Individuals involved in complementary or preparatory such forwarding and clearing clerks engaged in the dispatch of goods.

    How to Register Shops and Commercial Establishments in Karnataka Online?

    Follow this step-wise guide to register shops and commercial establishments in Karnataka without any hassle:

    Step 1: Visit the official portal of e-Karmika. Select' New Registrations'.

    Step 2: Provide the required details in the registration form and submit it. The applicant will receive a username and password on his or her registered email ID and contact number.

    Step 3: Log in to this portal again with the credentials and fill in the application form.

    Step 4: Ask for a challan from any specified bank based on employee counts. Attach all the necessary documents like a copy of the Aadhaar card, Memorandum of Article, etc. After submitting documents along with the challan, the applicant will receive a receipt number.

    Step 5: Submit the application form in physical format to the relevant authority of the regional circle.

    After a Senior Labour Inspector verifies the submitted application, it will issue a registration certificate.

    Documents Required to Register Under Karnataka Shops and Commercial Establishments Act

    Eligible candidates under each establishment category must submit the following documents while registering under Karnataka Shops and Establishments Act:

    Type of Establishment

    Documents Required

    Sole proprietorship

    PAN card, address proof, rental agreement, and passport size photographs.

    Partnership firm

    PAN card, address and identity proof, rental agreement, passport size photographs of every business partner, partnership deed.

    Private limited company

    PAN card, incorporation certificate, address and identity proof, MOA, rental agreement, AOA and passport size photographs of directors.

    Registration Fees for Shops and Commercial Establishment in Karnataka

    Applicants need to pay the following fees for registration of their shops and commercial establishments in Karnataka:

    Number of Employees

    Fees

    No employees

    ₹ 300

    1 to 9

    ₹ 600

    10 to 19

    ₹ 4,000

    20 to 49

    ₹ 10,000

    50 to 99

    ₹ 20,000

    100 to 250

    ₹ 40,000

    251 to 500

    ₹ 50,000

    501 to 1000

    ₹ 70,000

    More than 1000

    ₹ 75,000

    Steps to Check Application Status of Registration for Karnataka Shops and Commercial Establishment

    Mentioned below are a few simple steps following which an applicant can check the application status of registration for shops and commercial establishments in Karnataka:

    Step 1: Go to the official portal of e-Karmika. Select 'Know Your Application Status'.

    Step 2: Provide the acknowledgement number and click on 'Search' to check the application status and other essential details.

    Validity of Registration Certificate for Shop and Commercial Establishment in Karnataka

    The validity of a registration certificate is 5 years in Karnataka. The holder of this certificate must renew it before one month of its expiry.

    Rules of Karnataka Shops and Commercial Establishments Act

    Here are some of the essential provisions of the Karnataka Shops and Commercial Establishments Act:

    1. Employment of Women, Children and Young Individuals

    The Act bans child employment in any establishment. The child refers to an individual who has not reached 14 years of age. 

    Besides, women and young individuals cannot work during the night at any establishment as employees or otherwise. Here, young individuals are those who have completed 14 years but not 18 years.

    2. Working Hours

    The working hours of employees are 9 hours a day and 48 hours a week. If employees work beyond prescribed hours, the employer must pay them for overtime. Moreover, the working periods of employees must be fixed so that the working period does not go beyond 5 hours without an interval.

    Besides, establishments will not operate before and after the following hours:

    • Bangalore: Before 6 am and after 9 pm
    • Other areas: Before 8 am and after 8 pm

    3. Exemptions of Work

    No women, whether as an employee or otherwise, are allowed to work after 8 pm in an organisation. BT or IT organisations can acquire permission for women to work after 8 pm by providing details in Form R.

    4. Regulations and Employment

    • Employers employing individuals in or with regard to their organisations must issue an appointment order through Form P.
    • The attendance of employees will be registered in Form T.
    • Establishments exempted from weekly holidays must provide an employee a mandatory holiday on the 7th day after the latter has served the organisation for 6 consecutive days. In special situations, the 11th day must be a compulsory holiday if employers cannot provide a holiday on the 7th day to employees.
    • Employers should pay the salary before the 7th date of the subsequent month.
    • Working time shall not go beyond 58 hours, including additional working hours.
    • Employers must calculate 1 day for every 30 days as sick leave and 1 day for every 20 days as earned leave while evaluating employees’ working days in the present year. This leave calculation will be documented in format F.
    • An organisation cannot dismiss an employee who has worked for 180 days in that organisation without any prior notice.

    5. Weekly Holidays

    Every establishment in Karnataka must remain closed for one day a week. However, if there are adequate additional employees in the establishment, it can stay open throughout the entire week.

    Organisations exempted weekly holidays are as follows:

    • Organisations selling medical equipment and medicine
    • Residential schools, clubs, hotels, lodging, hostels, and hostels attached to college or school.
    • Stalls, refreshment rooms, shops at railway stations and bus stands
    • Shops dealing in egg, meat, fish, milk and other dairy products (except ghee), chocolate, bread, confectionery, fresh ingredients, ice cream, vegetables, fruits, raw fodder and cooked foods for sale.
    • Offices or shops dealing in daily newspapers and weekly magazines.
    • Shops selling paan, cigarette, beedi, and soft drinks
    • Theatre, cinema, and other public recreation centres
    • Diesel and petrol for sale
    • Tan bodies
    • Museums and exhibition shops
    • Brick, lime manufacturing industries, oil and flour mills.
    • Container, copper, brass manufacturing firms.
    • Services  related to biotechnology information, information, and biological engineering services 
    • Establishments performing research on infectious diseases

    6. Annual Leave With Wages

    Employees can opt for leave with a wage of one day for every 20 days of completing work. Young workers can also opt for leave with a wage of one day for every 15 days of completing work.

    7. Right of Employees

    • Employees can take one day as a mandatory weekly holiday.
    • Employees hold the right to keep earned leaves for 40 days.
    • If an employee works additional hours on any day or week in an organisation, he will get wages twice the normal wage rate.
    • Employees can encash earned leaves which have not been availed.
    • Employees dismissed or removed by employers hold the right to appeal to jurisdiction if the dismissal or removal has no reasonable cause.
    • If it is proved that employees are dismissed or removed without proof of misconduct or reasonable cause, they shall receive compensation for one month’s pay for services every year.

    8. Management of Records

    • Employers must use format A for registration of establishment, renewal or report changes in information.
    • Use format P to finalise a distinct day as a weekly holiday.
    • Format P is used to record leave accounts, and format H to provide a copy to employees.
    • Format T is used to record employees’ daily attendance, and Format R to get permission for women to work after 8 pm.

    9. Submission of Annual Reports

    Employers must submit annual reports ending on 31st December before 31st January of the subsequent year using format U.

    10. Minimum Wages

    The Karnataka State Government determines the wage rate of labourers employed in shops and establishments and undergoes revision periodically.

    11. Registration of Establishments

    Dealers must display their registration certificate inside visible areas of office premises. Additionally, if dealers close their establishment, they should surrender their registration certificates to the relevant authority.

    Benefits of Registration Certificate for Shops and Commercial Establishment in Karnataka

    A shop and commercial establishment's owner can avail the following benefits after registering under the Karnataka Shops and Commercial Establishments Act:

    • Registration helps to open a current account for the business.
    • Registered business entities can avail loans from financial institutions or banks without much hassle.
    • Businesses with registration certificates can enjoy power tariffs, tax incentives and exemptions under the State Government's taxation system.
    • Registration certificates serve as evidence before the Municipality inspector or officer from the Labour Department of the State Government.

    Keep all these details about the process of registration of shops and establishments in Karnataka in mind. This is because knowing the information will streamline the registration and other processes.

    Frequently Asked Questions

    What is the time within which the employer can change any details mentioned in the registration form?

    If there is any requirement to change the information mentioned in the registration form, such as a change in address or ownership, an employer can do the same within 15 days after such changes.

    If there is any requirement to change the information mentioned in the registration form, such as a change in address or ownership, an employer can do the same within 15 days after such changes.

    Does an owner need to register separately for different branches of the establishment?

    Yes. Owners possessing different branches of establishment or shops in Karnataka must acquire separate registration certificates for each branch under the Karnataka Shops and Commercial Establishments Act, 1961.

    Yes. Owners possessing different branches of establishment or shops in Karnataka must acquire separate registration certificates for each branch under the Karnataka Shops and Commercial Establishments Act, 1961.

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    Last updated: 2023-03-23

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