Wait! Before you start a business in India, just ask yourself, do you know about legal requirements? There are a range of registrations that you might have heard about.
Well, I have come up with two of the most important registrations, but many entrepreneurs get confused between them. The terms are Shop Act Licence and Udyog Aadhar. Keep reading to make an informed decision about which option is perfect for your business needs.
What is the Shop Act License?
Under the Shop and Establishments Act, it is mandatory to have a Shop Act License. The chief purpose of the license is to regulate employee welfare, employment conditions, wages, and working hours. Generally, it applies to businesses that operate in commercial establishments like shops, offices, etc.
Who Can Apply for a Shop Act License?
If your business operates in India, including LLP, private limited company, sole proprietorship, and partnership, it would be better to obtain a Shop Act License. However, the requirement varies from state to state, and that is why you need to comply with respective state laws.
Benefits of Shop Act License:
- • Government Benefits: You become eligible for government-provided subsidies and schemes.
- • Employee Rights Protection: As an employee, you can expect fair wages, working hours, and leave policies.
- • Legal Recognition: It can provide your business with legal validation and ensure compliance with labor laws.
What is Udyog Aadhar?
Udyog Aadhar, which is now replaced by Udyam Registration, can be described as a unique identification number provided to startups and small businesses. The Udyog Aadhar registration online process is quite simple and can aid you to avail a range of government benefits.
Who Can Apply for Udyog Aadhar?
If your business comes under micro, small, or medium enterprises, then you can easily apply for Udyog Aadhar Registration. It includes LLP, private limited company, sole proprietorship, and partnership.
Benefits of Udyog Aadhar:
- • Access to MSME Schemes: With Udyog Aadhar Registration MSME, you can avail yourself of numerous benefits such as subsidies and low-interest loans.
- • Subsidies and Tax Benefits: Under state and central government schemes, you can expect rebates and exemptions.
- • Ease of Credit: Banks and NBFCs can give your business priority sector lending and financial support.
Contrast Between Shop Act License and Udyog Aadhar:
Both registrations serve a business purpose, but they have distinct regulatory requirements and roles. Below are the key differences:
1) Purpose:
- • The Shop Act License regulates your working conditions and labor laws.
- • For MSMEs, Udyog Aadhar Registration online offers benefits and recognition.
2) Registration Process:
- • In the case of a Shop Act License, there is a need for physical or online registration through the state labor department.
- • You can apply for Udyog Aadhar on the MSME portal through a simple online registration.
3) Regulatory Authority:
- • Under the Shop and Establishment Act, the state government governs the Shop Act License.
- • Under the central government, the Ministry of MSME regulates Udyog Aadhar Registration MSME.
4) Applicability:
- • The Shop Act License applies to all commercial establishments, such as restaurants, offices, and shops.
- • Udyog Aadhar is meant for micro, small, and medium enterprises.
5) Legal Requirement:
- • If you are a commercial establishment, then it is mandatory to have a Shop Act License to legally operate.
- • If you want to enjoy MSME benefits, then Udyog Aadhar can be an optional choice.
Conclusion
It can be said that both the registration, Shop Act License, and Udyog Aadhar play a vital role in business operations but cater to different regulatory requirements. So, before you apply for either of these registrations, make sure to assess your objectives and business type.
