We all have examples of businesses that have strayed just enough from the norms in search of legal slack, only to be discovered breaking the law. The result? Large fines and severe reputational harm are just two examples. This is why keeping your business legally compliant is crucial.
As a business owner, you are aware of the need to uphold compliance with both federal and state laws. It’s critical to keep up with all regulatory developments and changes because they can have a significant influence on businesses of all shapes and sizes.
Even the most seasoned of entrepreneurs can become overwhelmed by the sheer amount of rules, and it becomes even more difficult when those laws are continuously changing.
How then can you maintain compliance for your business while keeping up with the ever-evolving regulations? Some of the most effective techniques to maintain a company’s legal compliance are provided below.
Check On Your Certificate of Good Standing:
According to Corey Tyner, owner of the real estate business BuyYoDirt: “Each state has a unique document that certifies a business is authorized to operate within its borders. This is commonly referred to as a “Certificate of Good Standing,” and it informs the public that your company complies fully with all legal requirements.
You should keep this material close at hand. When you do business with lenders and officials from other states, they almost certainly need the information that this one certificate provides.
Simply said, having it on hand saves time. Additionally, if you don’t have your copy on hand at the main site of your company, you can incur fines or other consequences in some regions.”
Know the applicable laws for your industry:
Abe Breuer, owner of VIP To Go makes a good point in the following words: “Knowing all applicable laws that can pertain to the operations and activities you engage in is one of the most important things you can do to defend your company legally. Any business or entrepreneur would be wise to keep an attorney on retainer so that they can be guided as needed.
You might also want to contact a lawyer who specializes in the legal issues that relate to your industry the most. Running a business will always come with dangers, but being proactive in such legal problems will help you avoid difficulty.”
Get A Surety Bond to Guarantee Trust:
Surety bonds are only written contracts between three exclusive parties that are created to secure the integrity and honesty of business owners or to ensure that work is performed.
Small business owners typically obtain a bond from a surety company to guarantee that their clients and customers will receive the goods or services they have paid for.
The surety company will refund the end customer if the business owner breaks their promises, and you will be required to make a similar payment in return.
The kind of surety bonds your company will need will entirely depend on the state you live in and the kind of business you are operating. You must check your local regulations to determine whether one is required because nearly all licensed professionals and contractors are required to have one.
Surety bonds assist businesses to uphold and carry out any promised contractual obligations to stay in compliance with the law. Fortunately, even though it may appear unimportant, clients and consumers prefer to swarm to bonded businesses because they know they can rely on them to put their money where their mouth is.
Customers can file claims against the surety bond if the dealer breaks the conditions of the bond agreement, and the bond will pay out to make the customer right again. The motor vehicle dealership will thereafter be required by law to reimburse the surety company for the claim.
Some states will not issue company licenses to anyone who cannot demonstrate that they have surety bonds because they are so critical to the success of many enterprises.
Keep On Top of Changing Legislation:
Percy Grunwald, founder of Compare Banks states: “Even though you may have all the required documentation filed and updated, you still need to be aware of local company rules as well as federal and state tax requirements. You must be aware of any legislative changes to be completely compliant with the law.
For instance, if laws governing health leave or the minimum wage change abruptly, you can unintentionally break the related regulations if you are not aware of them. So, to remain compliant with the law, keep an eye out for pertinent news.”
Get things in writing:
Using legally enforceable written documents, such as contracts, is a crucial aspect when it comes to defending a business legally. Having this form of documentation gives you protection because it is legally obligatory for both parties to abide by the terms and conditions of the agreement.
Just keep in mind to read over a paper carefully before signing it to make sure you agree to all of its clauses.
Train your staff extensively:
According to Andy Golpys, founder of MadeByShape: “The role of the workforce is infrequently considered when company compliance is brought up. Compliance doesn’t only have to mean that the owner follows the rules. Your crew may be a huge asset in helping you adhere to the rules.
To help keep your business legally compliant, hold training workshops to explain to staff members their responsibilities in the workplace and what they must do to comply with regulations. Teach them how to use the modern hardware and software you employ to stay on top of the rules.
It Is much easier to manage when the duty is decentralized and everyone is involved in your purpose. Everyone is less likely to make a mistake when they are clear on their responsibilities. When they do, their teammates can assist them in fixing the situation.
It also loosens some of the weight off of your shoulders. It is considered preferable to manage policy compliance on an as-needed basis than to regularly perform an entire overhaul. This method is smoother and eventually makes those recurring audits easier to handle.”
Audit yourself from time to time:
Any information security and compliance program should include internal auditing as a crucial component since it is a useful tool for risk management that is both effective and appropriate.
By confirming internal controls like operational efficacy, risk mitigation measures, and compliance with any applicable laws or regulations, internal auditing helps the board and management oversee an organization’s culture, policies, and procedures.
You can get assurance that you are following your organization’s policies and procedures and that these procedures are sufficient in reducing your specific risks by conducting an objective review of them.
You can find control suggestions to raise the efficacy and efficiency of your processes by regularly assessing and monitoring them, hence, enabling your organization to depend more on systems than on individuals.
There are many things that you will have to do to keep your business legally compliant on all fronts, and the methods mentioned above are some of the best ways to ensure that your business stays legally compliant.
After all, if you are unable to meet your basic legal requirements as a company, the state or town can take away your right to conduct business. This is not worth the risk, so make sure your business is always legally compliant.