Staying Compliant helps companies avoid risks like
- Imprisonment of Directors
- Heavy Fines
- Loss of Business Reputation
- Cancellation of Licenses/Registration
- High Litigation Costs
It is better for companies to understand the risks associated with non-compliance with various statutory and regulatory compliance. Depending on the type of business and geographical presence there are various types of compliance responsibilities that companies are required to fulfil. Some of these responsibilities are periodic and involve activities like filing of returns, statutory payments, maintenance of registers etc.
Many of the responsibilities are conditional or event based. Events like employee on boarding, exit, accident or death require various types of compliance tasks under several labour laws. Similar under Companies Act, many compliance responsibilities are triggered based on the changes of the shareholding pattern or directorship.
The common compliance responsibilities are something that every HR, finance or Compliance department would typically track regularly. Conditional or typical event based compliance becomes challenging for the companies and require expert advise. Regular changes to the compliance requirements is another challenge for the companies.
Most HR, finance or Compliance department use services of various agencies along with some in house expertise in order to stay compliant and keep companies safe from the risks of non-compliance. A major headache remains trying to keep all the documentation in place for easy retrieval during an inspection or an audit. Tax related compliance documents can be downloaded from income tax website but the labour law compliance documents cannot be stored or retrieved from government sites. Producing documentation hence becomes a major risk as lack of evidence is akin to non-compliance and attrition in the HR department leads to risk of losing these crucial documentation.
One solution to avoid these risks is to have a compliance solution in place that can help verify whether all compliance activities are timely completed. The solution also helps track and identify gaps in compliance if any. Online documentation is another major benefit of having compliance solution in place.
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