Legal compliance can be understood in two parts: legal and compliance. Legal means the interpretation of national laws, rules, codes, or commands and compliance means acting in accordance or complying with laws, rules, codes, or commands. The legal compliance extends to the regulatory mechanism that needs to be followed by the organizations. Legal compliance is a very important aspect in an organization and area of business.
Legal compliance is a process to ensure that the company follows relevant laws and regulations. Legal compliance in the context of business and corporate departments is understanding of ethical code of working within the entire profession. Firstly, the organization’s policy needs to be in accordance with the law and secondly, the policy should be consistent with the law.
Compliance in Law and Compliance in Business
The meaning of compliance can be classified in two ways- compliance in law and compliance in business. The definition of compliance in both categories is the same but the requirements of compliance vary between these categories. Compliance in law provides that what happens if a person does not comply with the court’s order if the person doesn’t comply with the court’s order then it is considered as a court of contempt of court and may face punishment and fine as well.
Compliance also involves knowing and understanding laws and regulations for businesses or companies. This means keeping records, maintaining policies and procedures in respect of legislation. Companies adhere to the rules to regulate business practices in their jurisdiction. If the company fails to follow the compliances then the company’s officials may face fines, punishment, and goodwill damage.
Thomson Reuters Practical Law’s Compliance
Implementation of effective compliance policies.
Educating and regulating policies related to employees.
Staying updated about the various regulations that are essential for a company’s compliance across all jurisdictions where the company is running or operating its business.
Identifying the issues that the company may face in the future and ensuring that there are procedures and measures to address the issues in the future.
Difference between Compliance and Legal
Compliance regulation is the responsibility of the company’s legal department.
The legal professionals advise on the law and legal practice in the court.
Compliance officers are responsible for compliance procedures, systems, and policies to ensure that the company does business within the legal parameter.
In-house counsel plays a vital role in undertaking due diligence, giving legal analysis, conducting an internal investigation, and guidelines.
Know the Regulation for Legal Compliance in Business
Before starting the compliance procedure knowing the regulation of the industry or sector in which the company is working, understand the requirements for the entity to run its business in the jurisdiction. The company needs to make sure that it considers all aspects like:
- Corporate Law
- Health and Safety
- Cyber Security
- Data protection
- Environmental responsibility
- Employment and Labour laws
- Tax laws
- Advertising regulations
- Intellectual Property Right
- Financial and Account Requirements