Now that you’ve formed your corporation, you’ve taken the step to create a prosperous future. However, all your well-laid business plans and carefully thought-out business and marketing strategies will come to naught if you don’t do some essential housekeeping to stay in business. As a business owner, you must understand and comply with the rules and regulations of running a business.
Besides devoting your time to building your business, you must also ensure compliance with applicable laws, insurance, regulations and taxes. The most difficult of these may be staying compliant with taxes – not because you intend to keep more of your profits but because of the complicated tax codes. Fortunately, corporate tax and compliance services make it much easier to stay on the right side of the law and the IRS.
Why Compliance Isn’t Easy
Compliance is challenging for three main reasons:
- Complex Laws. Compliance is not as easy as you might think because you are working with federal, state, and local laws. This means you are working with different laws from different sources enacted for different purposes. Besides difficulty in understanding the language of the law, complexity arises because of the diversity of laws you must abide with. In short, it’s easy to become bewildered by complexity.
- Obscure Regulations. Another challenge might be that some regulations may be obscure. This is particularly true if you do business in several states or countries and are expected to comply with the laws enacted by numerous local jurisdictions or government agencies. For instance, if you are importing children’s toys from China for sale in your gift store, you might not know that they have been banned for using lead-based paint that are toxic for toddlers who suck on their toys. So the challenge is not that the laws are hard to follow, but that you may not know about all of them.
- No Playbook. It’s up to you to find out about the applicable laws for your business because you are not handed an official playbook and given instructions on how to play by the rules. While government agencies do have helpful public information officers to explain the laws to you, nobody is going to tell you about these laws until you ask. And, of course, the worst way to find out about these laws is because you violated one or two out of ignorance.
What Is A Business In Good Standing?
For your business to prosper, you have to ensure that it is in good standing. Good standing is an umbrella term that means you have to turn in all your paperwork on schedule, keep on top of all your annual reports, and pay all necessary fees.
What Happens When You Fail To Comply?
While you may have every intention of being a good, law abiding citizen, it’s possible to fall short when it comes to compliance. You may fall short because you were ignorant of a law or because you got frenetically busy running your business and did not keep everything up-to-date resulting in grave errors in the records you had on file with the state.
Unfortunately, your intentions are rarely taken into account in a court of law. The letter of the law, not your psychological state, is all that matters. Failure to comply could damage your business, tarnish your brand, and derail your future success. Worse still, it could impact your personal assets, and, as a result, you end up losing your home, the money in your bank account, and everything of value you own.
How to Ensure Compliance
A do-it-yourself attitude may have taken you far in life. It may have helped you develop the rugged individualism necessary to become an entrepreneur capable of creating your own destiny. After all, it takes tremendous courage to build your own dream rather than become an employee that works hard to build someone else’s dream. However, when it comes to dealing with staying compliant in your business, it’s just not a good idea to do it on your own.
First of all, it’s unreasonable to expect anyone to have the breadth of knowledge and experience necessary to understand the many insurance regulations, laws, and tax codes that apply to a business. Then, even if by some miracle you can understand enough of what you need to do to comply, you still don’t have the time to do everything necessary while still running a full time business.
So the best way to ensure compliance is to work with subject matter experts like insurance agents, lawyers, and accountants. The idea of a self-made man or woman is mythical. You can only succeed in business if you build a team to support you. The stakes of non-compliance are too severe to neglect so surround yourself with a team of professionals, work out a checklist of the issues that relate to your business and then methodically execute on everything that needs to get done.