Urahara's shop was official sanctioned by Soul Society to act as a meditator and gathering place for all, to both strengthen diplomacy and keep an eye on others. You can find a mixture of humans and spirits within the grounds of the shop, all of them are under strict rules from Urahara. The first rule and only rule is no violence within the shop, Urahara has set aside a small (rather LARGE) area for play time and training, which can be used for fighting. Since Soul Society is now funding Urahara, the shop has actually become more like a social hall, and he even put in a bunch of new rooms for those freeloaders from all around.

The Shop is protected from the otherside world by a spirital barrier, only those that are spiritual aware can see the shop and those on the shop grounds, otherwise only a empty alleyway appears before normal humans. The most important function of Urahara's shop currently besides being a meeting place is to identify the Hollows that are marked for destruction to allow Quincies and others to go after them.

Urahara's Shop also has portals from many different cities through out the world, which means it is easily accessible even when not in Karakura Town.