Labour License
Shops & Establishments / contract labour
Shops & Establishments registration and contract labour licenses under state labour laws — mandatory from your first employee.
What's included
- Shops & Establishments registration
- Contract labour license (if applicable)
- Display-format certificates
- Renewal management
Understanding Labour License
Labour registrations are the state's way of knowing who employs people and on what terms. The most universal one is registration under your state's Shops and Establishments Act — in Telangana, the Telangana Shops and Establishments Act, 1988 — which applies to virtually every shop, office, godown and commercial establishment, usually from the first employee and within 30 days of starting business. It governs working hours, weekly holidays, leave, wages and employment records, and the registration certificate must be displayed at the premises.
The second regime is the Contract Labour (Regulation and Abolition) Act, 1970. If you engage 20 or more contract workers through contractors (50 in states like Telangana that have raised the threshold), you need registration as a principal employer; and every contractor supplying that many workers needs a contractor's license, backed by Form V from the principal employer and a security deposit. Manpower agencies, housekeeping and security contractors, and construction firms live under this law daily.
These registrations are checked at surprisingly practical moments — opening a current account, onboarding as a vendor with large companies, bidding for contracts, or during a labour department inspection. Non-registration attracts fines and, under the CLRA, even imprisonment, and unlicensed contractors can see their workers deemed direct employees of the principal. We determine exactly which registrations your headcount and structure require, prepare the forms and file them, typically completing the process in 7 to 15 working days.
Who needs this?
Every shop, office and commercial establishment
Retail shops, IT offices, clinics, agencies and godowns must register under the state Shops and Establishments Act, generally within 30 days of commencing business.
Startups and companies opening current accounts
Banks accept the Shops and Establishments certificate as standard proof of business for current accounts, making it one of the first registrations a new business needs.
Principal employers using contract labour
If contractors deploy 20 or more workers at your establishment (50 in Telangana and some other states), you must register as principal employer under the CLRA, 1970 before the work begins.
Manpower, security and housekeeping contractors
Contractors supplying workers beyond the threshold need a CLRA contractor's license for each principal employer engagement, supported by Form V and a security deposit.
Construction and project companies
Contractors executing projects with large contract workforces need CLRA licenses site-wise, and BOCW registrations where construction workers are involved.
Businesses empanelling with large clients
Corporate vendor-onboarding and tender processes routinely demand Shops and Establishments registration and CLRA licenses as compliance prerequisites.
When this is NOT the right fit
| Your situation | What applies instead |
|---|---|
| ✕You engage fewer contract workers than your state's CLRA threshold | The CLRA applies to establishments and contractors at 20 or more contract workers (50 in Telangana and several reformed states). Below the threshold, no CLRA registration or license is needed — though the Shops and Establishments registration still applies. |
| ✕Your unit is a factory registered under the Factories Act | Premises covered by the Factories Act, 1948 are excluded from the Shops and Establishments Act — the factory license regime governs them instead. CLRA obligations, however, can still apply to a factory using contract labour. |
| ✕The work you outsource is intermittent or casual in nature | CLRA does not apply to work performed only intermittently — broadly, work done less than 120 days in a year or seasonal work under 60 days — as certified by the appropriate government. |
Not sure which applies to you? Message us — we'll point you to the right service in minutes, free.
Documents you'll need — and why
Identity and PAN of the employer, partners or directors
The registration certificate names the employer personally responsible for compliance, so the department verifies who manages the establishment.
Proof of establishment premises (rent agreement or ownership document)
Registration is location-specific; each branch or site needs its own certificate tied to its address.
Details of employees — count, categories, wages and working hours
Fees under Shops and Establishments Acts are slab-based on employee count, and the declared hours and weekly holiday must conform to statutory limits.
Business constitution documents and commencement date
The 30-day registration clock runs from commencement, and the deed or incorporation certificate establishes the entity and its start date.
Form V from the principal employer (for CLRA contractor license)
A contractor's license is issued only against a certificate from the principal employer confirming the engagement, the nature of work and the number of workers.
Work order or agreement with the contractor or client
Establishes the scope, duration and headcount of the contract engagement on which the license terms and validity are set.
Security deposit challan (CLRA license)
The CLRA requires contractors to deposit security computed per worker before the license is granted, refundable on proper closure.
How it works, step by step
- 1
Applicability analysis
1-2 working daysWe map your headcount, contractor arrangements and state thresholds to determine exactly which registrations you need — Shops and Establishments, CLRA principal employer, contractor license, or a combination.
- 2
Document and data preparation
2-3 working daysWe compile employee data, premises proofs, Form V or work orders, and compute the applicable government fees and security deposits.
- 3
Online filing
1 working dayApplications are filed on the state labour department portal (TG-iPASS/labour portal in Telangana) with fees paid, and acknowledgment numbers shared with you.
- 4
Departmental scrutiny
3-8 working daysThe labour officer verifies details and may raise queries or, for CLRA licenses, seek clarifications on the engagement. We respond and follow up until approval.
- 5
Certificate issue and compliance setup
By day 7-15 overallRegistration certificates and licenses are issued digitally. We hand over the display-copy, the registers you must maintain, and the renewal and return calendar.
Due dates to know
Shops and Establishments registration
Within 30 days of commencing business
The exact window varies slightly by state; Telangana requires registration within 30 days.
Registration renewal
Before expiry of the certificate
Some states issue lifetime or long-validity certificates; others, including Telangana, require periodic renewal with late fees for delay.
CLRA license renewal
Application not later than 30 days before expiry
Contractor licenses are typically valid for 12 months and must be renewed alongside continued Form V validity.
CLRA annual return (Form XXV)
15 February for the previous calendar year
Principal employers file annual returns; contractors file half-yearly returns under the rules.
What non-compliance costs
Not registering the establishment under the Shops and Establishments Act
Fines under the state Act, escalating for continued default, and inability to produce the certificate during inspections, bank onboarding or tender submissions.
Engaging contract labour without CLRA registration or through an unlicensed contractor
Imprisonment up to 3 months or fine up to ₹1,000, with additional daily fines for continuing contravention under the CLRA, 1970 — and courts have treated workers of unlicensed contractors as direct employees of the principal employer.
Not maintaining statutory registers and wage records
Separate fines per offence during labour inspections, and adverse findings in client and buyer compliance audits.
Late renewal of registration or license
Late fees and, for CLRA, lapse of the license — contract work performed during the gap is unlicensed engagement with full penal exposure.
Why doing this right pays off
Bank-account and vendor-onboarding ready
The Shops and Establishments certificate is the most widely accepted business proof for current accounts, payment gateways and corporate vendor empanelment.
Inspection-proof operations
With registrations, licenses and registers in place, a labour inspection is a routine event instead of a penalty notice and prosecution risk.
Clean contract-labour arrangements
Proper CLRA registration and licensed contractors protect the principal employer from workers being deemed direct employees with back-wage claims.
Eligibility for tenders and large contracts
Government and corporate tenders require valid labour registrations; having them ready means you never lose a bid over missing compliance papers.
Complete compliance map
We tell you exactly which laws apply at your headcount today and which trigger next as you grow — PF at 20 employees, ESI at 10, and CLRA thresholds — so nothing catches you off guard.
Common DIY mistakes we see
- Assuming a small office with two or three employees is exempt — most state Shops and Establishments Acts apply from the first employee and even to establishments run by the owner alone.
- Engaging a manpower contractor without checking their CLRA license, which exposes the principal employer to the contractor's non-compliance.
- Registering the head office but not branches — each premises needs its own Shops and Establishments registration.
- Treating the registration as one-time and missing state-specific renewals and annual returns, which quietly accumulate late fees.
- Ignoring the registers and notices the Act requires — the certificate alone does not survive an inspection if attendance, wage and leave registers are absent.
Frequently asked questions
You need registration under your state's Shops and Establishments Act — in Telangana, within 30 days of starting business — and must maintain basic wage, attendance and leave registers. CLRA does not apply at your size, and PF and ESI trigger only at 20 and 10 employees respectively. We confirm the full applicable list for your state.
Not sure if this is the right service?
Message us on WhatsApp — a real expert replies, usually within minutes.
All-inclusive professional fee. Government fees (if any) extra at actuals.
Grab a coupon below — it applies at checkout.
🎁 Offers on this service
Flat ₹500 off
You save ₹500 → pay only ₹2,499
on orders above ₹2,999
10% off up to ₹500
You save ₹299 → pay only ₹2,700