Compliances ensure that an organization follows relevant laws, regulations, and business rules.
When it comes to compliances, every statutory body incorporated or registered under respective legislature’s authorities are afraid to undergo into non-compliance.Some of the consequences, to illustrate a few, faced due to non-compliance are:
- Penalties
- Disciplinary actions
- Disqualifications
- Also, investors hesitating to invest or invest further into the business entity….
To prevent such situations, it becomes important to be aware and understand the applicable compliances.
In this article, we are going to understand the relevance of Compliances which wheel around the usual business process. The meaning of compliance is ‘the act of obeying an order, rule, or request’ . In a layman’s term, Compliance refers to ‘adherence to the rules and regulations issued by the government of the respective country’.
Compliance involves not only knowing and understanding the legislation but also being able to demonstrate that the business and its entities are in compliance at all times – this means keeping checks, having policies and procedures, and withholding evidence, that people are taking responsibility for compliances.
In the corporate world, compliance refers to the statutory compliances that is applicable to the companies. Statutory compliances relate to the various labour and taxation laws prevalent in India. These laws change at State and National level, and it is mandatory for companies to be in compliance of them. Non-compliance with these regulations can land a company into legal trouble. Companies spend a good deal of time and resources ensuring statutory compliances.
It is important to have a sound understanding of the laws and keep abreast with any changes incorporated since the law is very dynamic and rules keep changing from time to time. Of recent, providers of statutory compliance services in India have come into the limelight more than they used to be for the same reason.
How is statutory compliance important to a business?
- Good corporate governanceo Increasing efficiency
- Better public relationso Higher employee morale
- Avoiding penalties and other legal implications
How Auxano manages compliance risk?
- Always start with risk management
- State the importance and need of compliance with the operating ecosystem with the investee company
- Understand the latest regulations and enforcement policieso Having a monthly / quarterly reporting systemo Continuously monitor and update compliance
Conclusion
Legal and regulatory compliances are primary business concerns. Managing risk effectively is widely seen as contributing to the good reputation and sustainability of a business.
Compliance , be it statutory or legal or otherwise , is the responsibility for every individual in the organization. But those who are responsible for managing entities will often coordinate legal compliance evaluation steps.
It is the responsibility of the business to ensure that it has easy and quick access to all documentation related to the entities, including filing dates and regulatory requirements.
Complete & timely compliance is necessary to keep an individual, company, organisation or any other statutory body out of the legal consequences of non-compliance.
Brijesh Damodaran Nair
