Corporate compliance is a general term used to describe a company program designed to prevent and detect breaches of any laws, regulations, standards or codes with which business must comply. For Australian business, many different laws and regulations govern how you run your business. For instance, some of these regulations are found in the Corporations Act 2001 (Cth), as well as industry-specific regulations and company policies.
Why do businesses have compliance programs?
- It just makes good business sense. A well-designed compliance program will give you greater visibility as to what is going on in the business. Also, some businesses that you do business with may require that you have a corporate compliance program in place.
- Having standards and procedures in place for your staff to follow also makes it easier for them to do their jobs. Knowing what is and isn’t permitted will allow them to focus on the task at hand, and not worry about if what they are doing is ok. It also helps reduce the prospect of criminal conduct.
- Many industries including in the Pharmaceutical, medical device, telecommunications, health and fitness, insurance and financial advice have their own codes of conduct. Having a compliance program in place makes it easier for a business to state that they are in compliance with the code.
- It makes it easier for a business to comply with their legislative requirements. Having a compliance program in place will allow a business to ensure that all staff (in particular new staff members) know and understand the company’s legal requirements. Whether it be workplace health and safety, privacy, or ASIC requirements, a compliance program will ensure that your business is up to date on its legal requirements.
Is my business too small to have a corporate compliance program?
No, your business is never too small to have a corporate compliance program. The key is to tailor your program to the size and type of business you run. Even if you are a business of one, a corporate compliance program will enable the proper documentation of essential business processes such as accounting processes. Having even a basic program in place will not only make it easier to run your business but also make the business more attractive to a potential buyer. As your business grows, a well-designed compliance program will ensure that employees understand their obligations in regards to fair competition, privacy, intellectual property, dealing with regulators and other staff to mention just a few.
I run a small business, what should my compliance program cover?
Your compliance program should, as a minimum, cover all of the company legal requirements. These include the following:
- Your business must have a registered office in Australia. You must inform ASIC of the address, and update them when you move.
- If you run the business from a location that is different to your registered office, you must let ASIC know.
- You must disclose to ASIC the names of the directors of the business. You will need to make sure ASIC has an updated list of the directors including their full name, DOB and address.
- ASIC requires that you have up-to-date financial and business records that can explain the business transactions and financial position. This is also necessary for ensuring that the business is solvent.
- You also have a legal requirement to pay all relevant fees to ASIC. If you fail to do this ASIC may de-register the business.
For more information on ASIC, requirements visit www.asic.gov.au
If you need any help designing a compliance program for your business irrespective of its size, LegalVision can assist you in preparing policies, developing a program or help you in meeting your legal requirements. Get in touch today!