Businesses, whether large or small, need to adhere to various statutory and other regulations if they want to succeed in today’s competitive world. But as many businesses are discovering, staying compliant with the relevant laws and regulations is hard work, especially when you have limited time and resources to devote to it
At this point a reputable corporate consultants’ company comes into play, offering compliance outsourcing financial services that will give your organization an edge. They make it their job to do all the compliance and legal work for you. In this blog series, we will find out why you should opt for them and how to create an effective compliance strategy and comply with the law.
Indian statutory compliances in context to company’s personnel
Statutory compliances are created by the governing bodies in India to guarantee justice and equality for the company’s personnel. For instance, the minimum pay, TDS, ESI and PF, gratuity, and other basic standards are all stated in India’s statutes, which help to resolve disputes between employers and employees and foster a cooperative work environment. Failure to abide by statutory requirements may result in severe fines, a damaged reputation in the marketplace, and a loss of staff loyalty, among other problems for the organization.
Let us now move on to two important categories of compliance obligations, namely external compliance, and internal compliance. Both are critical to a company’s ability to run its operations effectively.
External regulations
External Compliances are those regulatory requirements that are imposed on a business by a state or federal government. These compliances are determined by the states in which you were formed or where you operate your firm. Among the external compliances are the submission of yearly reports, tax filing requirements, The Labour Act Obligations, etc. The two categories of external compliance are statutory compliance and regulatory compliance. The ISO / FDIS 9001:2015 QMS standard outlines both these statutory and regulatory compliances.
Statutory compliances-These are the regulations and laws that the state or federal government has passed.
Regulatory compliance-Some regulatory body established by the state or federal government passes these laws.
Internal regulations
Internal compliances are the obligations that certain commercial enterprises must meet under state law. Senior professionals in the organization create and approve these, and everyone in the organization abides by them. Creating a board of directors, holding regular meetings, and issuing shares to shareholders, among other internal compliances.
How should a compliance plan be created?
Indian companies need to create a compliance plan that will help ensure their company is in line with statutory requirements. If a company violates the regulations, it faces heavy fines and other sanctions. Falling out of compliance may even lead to the permanent closure of the business’s operations. Hence, planning compliance well is just as crucial as carrying it out.
- Rules and regulations
It is important to create policies and procedures that outline the legal actions that the business and its employees must do. Regarding the potential danger, you should implement some procedures that aid in addressing or lowering such risk. Additionally, strict penalties for noncompliance must be implemented.
- Leadership
Create a governing body that will establish all internal rules and policies. The core values of the business serve as the foundation for internal compliance. Everyone, from top management to staff, should follow the example set by the leadership.
At CAC, a renowned corporate consultants’ company, we take care of all the steps that need to be followed to protect our partner companies from unfavorable legal situations. In the next blog in this series, you will get more in-depth knowledge about how to create an effective compliance plan