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CS Executive · Setting Up of Business, Industrial and Labour Laws · Various Initial Registrations and Licenses

Karthik runs a software consultancy from a rented office in Bengaluru with eight employees. He argues that since he sells services and not goods, he is not a 'shop' and no registration is needed. Which response is most accurate?

Karthik is incorrect. State shops and establishments laws usually define establishments widely to include commercial establishments such as offices and service firms, so selling services rather than goods does not take him outside registration, subject to the specific State provisions.

  1. AHe is correct, because the law covers only shops selling goods
  2. BHe is correct, because offices are covered only under the Companies Act
  3. CHe is incorrect, because State laws typically cover commercial establishments such as offices, and not only shops selling goodsCorrect
  4. DHe is incorrect, but only because he has more than five employees under the Factories Act

Explanation

State shops and establishments laws define 'establishment' broadly to include commercial establishments such as offices and service businesses, so the label 'shop' is not decisive. The Factories Act is irrelevant to an office, and the Companies Act does not govern this registration.

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