Compliance in business can be understood as a set of rules, regulations, duties, and processes for the organization for its employees, partners, board, and stakeholders. When one starts a business, it is not just for herself/himself there are people involved who help to set it up. To express that your business is actual and conduct is fair for the employees, one has to comply with the applicable rules and regulations set by the government. These sets of processes help to ensure that the organization/business is abiding by the rules, ethics, policies, company handbooks, and legal procedures of taxes and reports. While starting up a business a lot of newcomers are unaware of the compliance and lack in understanding its importance for the smooth and legal functioning of the business without any penalties and legal actions.
What is compliance in business and its legal procedure?
Some basic compliances of start-up and small businesses are to stay updated with the legal pattern like Shop and Establishment Act NOC from the area, Income Tax, GST, GST returns, and how to file them. Depending on the number of employees working in the organization, guidelines and basis of Shop Act registration, Employees State Insurance Corporation, provident fund, annual returns, and monthly returns will be recorded. It is essential to register themselves in the Micro, Small, and Medium Enterprise (MSME) which provides Udyog Aadhar and recognition certificate with a unique number for government registration.
Compliance in Business through Legal Counsel
It is important to work with legal counsel from day one, from registering a business, and even while facing any challenge, it is very important to have a legal backup. The lawyer will give the guidelines for contracts, partnerships, employment contracts, intellectual property securities, and avoid legal disputes or conflicts arising. One can even tie-up with the legal firm of hiring a lawyer for sole business purpose.
Long term benefit of Compliance
For maintaining a mark in the market through reputation and to stay in business for the upcoming years it is important to set the rules and codes. Through them, the protocol will be formally followed and modification in the rules and codes should be welcomed as per the required changes. This helps in maintaining the formal environment from day one and working as a whole.
Protect the intellectual property
It is the creative work that makes a business stand out in a crowd that is what makes compliance in business a task, it includes patents, copyrights, trademarks, and other things that happen only inside and work as a secret ingredient in the success. One must be quick to safeguard their work before even releasing it in the market. It is essential to consult an experienced lawyer in this matter.
After the legal procedure, the company must focus on its terms and ensure that all the employees working be aware of the legal boundaries of the company, and the business owner should not be liable for the employees if that happens while representing the organization. It can be written with the help of an advocate / attorney.
It is the basic rule of what is compliance in any business. To gain trust from the customers it is important to have regular conversations and interactions with them and fulfilling their commitments on time. There should be a proper follow-up. There should be properly recorded data to make sure the customers were satisfied with the service provided by the organization. The rules and procedures should be present. This helps to build up a base for reputation in the market. The dealings should be honest and constructive. Customers trust the companies which have better communication and understand their issues.
The companies should not only strategize for growth and monetary benefits but also the reasons why a customer should be attracted to it? What is its aim? This gives a clear image of how the company must work from inside and outside. Through this, the team remains motivated and strives for better results to meet the public demand by thinking like the public. To reach the desired results the company needs to follow the company ethics and policies and make the team accountable.
At the early stage or during the business set up stage it is quite normal to misclassify their employees. To save yourself from this know what kind of specialists you need, this saves from spending out on the hiring process. This helps in creating a clear state of what is needed from the employee.
The employees should be credited for their work from time to time. The annual or monthly bonus must be provided for a healthy work environment. There should be a competition that does not hamper the workplace environment.
Choosing a proper business structure for start-up and business is very crucial. Once the structure is decided it is important to execute it in a planned manner and to keep the above pointers in mind for running a better business and sustain in the market. Small businesses usually start as a sole proprietorship with small profits but they can expand it by time through investing wisely and taking up loans beneficial for them and easy repayment of them.
By Janhvi Joshi, B.A L.L.B, Jamia Hamdard University, New Delhi
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