Bylaws, regulations, and policies are put in place for a reason. Whether it’s something small, such as jaywalking or something complicated, such as running a business, they are there to give guidance and a roadmap for the business to remain legitimate and functional.
Yes, strict rules might take the fun out of running the business, but the risk associated with not complying with them is high enough to keep the organization on track. This is true for any business, regardless of their size.
Like big, multinational corporations, small businesses risk legal action, penalties, and negative implications in case of violation and ignorance. From the start, when you are registering the company, you have to be certain that you have fulfilled all legal requirements.
But don’t be misinformed that it’s a one-and-done task. Instead, maintaining small business compliance is an ongoing process that often requires annual revisits. Carving out time and defining annual or more frequent assessment of compliance is crucial and a business’s legal obligation.
This is one of the most important, most complicated parts of small business compliance. There are more than 10,000 state tax jurisdictions which are all subject to state legislature-directed change – and that too, annually.
Income taxes, sales taxes, property taxes, excise taxes, self-employment taxes, payroll tax, gross receipts, and various other taxes need proper payment and filing. The Internal Revenue Service or the IRS has comprehensive information available on the website here.
There are several topics within corporate compliance that mainly have to do with internal compliance. These issues concern C- or S-corporations that need to maintain compliance in order to enjoy the status and benefits of a corporation. This includes holding director and shareholder meetings, updating bylaws, issuing stock, recording stock transfers, and more. It’s also important that companies maintain accurate documentation for their board’s actions and decisions.
In addition to the articles of incorporation, bylaws are documents that you write when you start a company. These are instructions and regulations that govern the functioning of the corporation and are set by the board of directors. They include information about the corporation, shareholder information, annual meetings, information about the Board of Directors, financial audits, and other provisions.
Ongoing compliance involves revising the bylaws every year to make sure it remains functional. It might need to be updated if there have been recent changes in corporate law or within the organizational structure.
Next on the list are regulations set by the U.S. Equal Employment Opportunity Commission, or EEOC. The most basic laws small businesses need to adhere to involve the abolishment of discrimination on the basis of race, sexual identity, gender, age, ability, etc. Besides inculcating them within the company, these should also be mentioned in the employee handbook. You can find information on the EEOC website.
Within employee compliance, an important aspect is compliance with employee benefit plans. The U.S. Department of Labor has set requirements that make is a must for businesses to maintain and provide proper employee benefit plans. The sponsors are required to conduct tests, assure provisions, ensure proper filing, and generate required notices and documents.
In addition to these basic small business compliance requirements, there are others that need to be considered. These may be laws that are specific to the industry your business is a part of. If you are uncertain, an expert on the matter such as BizCentral USA can provide guidance.
Why is Small Business Compliance so Important?
As we have mentioned previously, policies and regulations are enforced to govern the functions of a business to ensure it is not being unethical. By not making it a priority, you risk missing out on some great opportunities for growth. The concept here is to make sure the business is acting responsibly.
Avoiding Criminal Charges
This is by far the most compelling reason for your small business to maintain its compliance. You wouldn’t want your blood, sweat, and tears to be swept away with a criminal charge. The repercussions are far too great; not just for the business but for you as an owner as well.
You can take the help of a compliance management company to equip you with a compliance kit you can use a guide for ongoing efforts. It will be then up to you to create and introduce policies within your organization to keep everyone on the same page.
Improved Internal Operations
Besides tax and financial regulations, there are policies concerning other areas of business that can help you maintain an atmosphere of safety and high productivity. This includes policies such as anti-discrimination, equal opportunity, anti-harassment, workplace safety regulations, etc.
These practices are defined by the U.S. Equal Employment Opportunity Commission and OSHA (Occupational Safety and Health Administration), etc. You can find detailed information and guidance on the websites.
By including their policies in the organization, you’ll create a positive environment for the employees. Recognizing these efforts, the snowball effect will only land your brand image under a positive spotlight and may also improve employee satisfaction and lower turnover.
This one is pretty clear. When competitors, customers, potential partners, investors, etc. are aware of your company’s impeccable small business compliance, it will automatically have a positive impact on your public relations.
Overall, maintaining company compliance is pretty much a win-win situation for your small business. With the information you have learned regarding what compliances to be aware of and why they are important, making it a priority is the only logical answer.
If you find yourself feeling a little lost due to being new in the business world, BizCentral USA can be of service. Specializing in small business development, we understand the importance of small business compliance and how you can integrate it. To find out how we can help your organization with initial and/or ongoing compliance issues, please contact us at 877-857-9002 to speak to a business consultant today.