For an entrepreneur, starting a small business is a hectic moment. You’re working on a business plan, putting together a financial plan, and potentially pitching investors or looking for finance. Ensure that all legal requirements are completed is something that is sometimes ignored but is quite important. Failure to comply might result in fines and possibly even legal action.
Compliance, in business terms, refers to ensuring that businesses of all kinds, as well as their employees, stick to existing national and international rules. If you are following the UK law “The Companies Act 2006” is the legislation that is the primary source of the UK laws needed when it comes to your small business. It is best to start planning and learning about the compliance laws in the UK as you are setting up your business. Planning this in advance will help to make it easier to implement your data protection policies.
These compliance laws have been put into place to ensure the protection of your company, your employees and the property your company is situated. As daunting as this may be to find all the compliance laws while trying to start a new business, the effort is worth it. Making the time to follow the compliance laws means you either avoid or identify criminal acts quickly, putting a stop to it.
It is essential that you read below and make sure you are complying with the bullet points listed. If there are some you do not recognise then it is important to check with your lawyer/ advisor to ensure your company is following these compliance laws.
Main Areas of Business Compliance in the UK to be Consider:
If you plan to establish a company in the UK, then you should consider the below business compliance
● Health and Safety for you, your employees, or anyone who visits the company site
● Permissions/ Licenses & Specific Permits
● Complying with Finance Regulations
● Data Protection (GDPR)
● Workers rights
● Employment Law
● Third party Contracts/ Agreements
● Complying with applicable industry regulations set out by professional regulators
Legal Documentation
What Legal Documentation does my Small Business need?
You should check and update all of your legal material, including agreements, contracts, forms, letters, policies, and procedures, on a regular basis to ensure that your company is compliant. This applies to all areas of law, including employment and corporate law, as well as taxation and health and safety. Following are the key documents that you must have:
● Invoices
● HMRC Papers
● Accident and Incident reports
● Record of Expenses (receipts etc)
● Tenancy Agreements
● Risk Assessments
● Health and Safety Policy
● Past Tax Returns
● Bank records/ Statements
● Staff Contracts
● Goods and Services Contracts
● Data Protections Documentation
● Health and Safety Posters
Her Majesty’s Revenue and Customs (HMRC) Checks
HMRC will take out checks with your small business to make sure you are complying within the law. They will usually do these checks as it is something they regularly do with all companies, however something may trigger them to do a check with your business. You can get a tax agent or advisor to help HMRC with their checks and questions, which will again take it out of your hands to save some time to concentrate on running your company.
The reason HMRC Check:
● To make sure your tax system operating well and fairly
● To put a stop or deterrent to tax evasion
● To make sure you’re paying the right amount of tax
● To make sure you’re paying tax at the right time
● To make sure you’re getting the right allowances and tax reliefs
Why they may be triggered to check?
● If figures on a return seem to be entered wrong
● If a small amount of tax is declared when turn over is high
● If a large claim for a VAT refund is made when turnover is low
You can help HMRC with their checks to make sure you are complying properly and cooperating with them to make the checks as smooth and quick as possible. Helping may also help reduce the penalty you could be charged if anything is wrong. HMRC themselves say, if something is found, the more you comply and help the less penalty they may give because of your cooperation. The best way to help is by sending them important and relevant documents and meeting with them to discuss your taxes and records.
Is it easy to keep my small business compliant?
Compliance Laws and Regulations are forever changing and sometimes it is hard to keep up with these. Your business lawyer will be there to make sure you are up to date with the changes and make sure you are implementing these changes within your company. It is important that you and or your lawyer keep up to date with all these changes to ensure your company doesn’t break any laws. Even if you do have a business or corporate lawyer, you, yourself as the employer can do things to check you are compliant:
– Adopt organizational procedures and policies
– Risk assessments regularly
– Independent statutory audits
– Internal Audits
– Keeping all needed documentation organized and up to date
Will you need a Lawyer for small business compliance?
Small businesses rely on lawyers to provide legal expertise in areas where they may be lacking and make sure that your company follows all federal, state, and local rules when it opens and runs. It is always best to have Business Law Solicitors and or Corporate Lawyers when it comes to any law involving your business. Compliance Laws are no exception, there are a lot of areas to cover when it comes to compliance, and getting the appropriate lawyer to help will save you a great amount of time and money, making sure a non-negligence approach is involved around your small business and its compliance laws. Mishoura will help with finding the best Solicitor/ Lawyer for you to make it easier to understand your compliance laws and how to make sure you and your employees are following them.
Do I have to follow the Business Compliance UK?
I am sure when starting out a small business the thought of cutting corners to save time and money is very appealing. However, the risk of doing this when it comes to business compliance is too great and corners should not be cut. You need to make sure you are adopting the right controls to make sure you are abiding by the laws and regulations that relate to your business.
If corners are cut and you’re not complying there is a risk of litigation laws/ disputes against you and your company. Customers or business partners may claim damages caused by noncompliance. You could be hit with fines, sanctions, or even imprisonment. You could lose trust and reputation amongst your community, other businesses, or partners within your business. These may be impossible to come back from, leading to possible closure or plummeting of your business. So not only is there a legal obligation to follow the compliance laws but also an ethical one.
Now you’re ready
So when it comes to opening your small business, not cutting corners or ignoring the laws is one thing you have to make sure you do. Checking and researching the national and international laws you need to comply with is key. By doing so you can make sure you don’t get fined, prosecuted, risk losing your reputation, and more. As daunting as it is with all the elements involved with complying with the different areas of law, if you put your time and effort into it, it will be worth it in the end.
Your business can thrive and grow with your goals in mind if you make sure everything is above board and runs smoothly. Companies like Mishoura are always keen to help businesses obey the law and thus help you with this by finding you appropriate Business Law Solicitors and or Corporate Lawyers, making the process smooth and simple.