Compliance or ethical functioning of the business includes abiding by the laws, regulations, and audits. The small business owner thinks that there might be many responsibilities and activities that come along with compliance.
But once everything is according to the compliance checklist, it is not difficult.
This will also help with the reputation of the company, the internal processes improve more, and the best business practices are followed.
Reasons a business should be compliant:
- For the smooth functioning of a business.
- For the avoidance of any penalties, legal actions, or any problem in the business functioning.
- So that it generates confidence about your business in the customer’s mind.
- Will also ensure employee protection and that they are satisfied and all the complaints or issues are carefully monitored.
- Also helps with handling stock, advertisement, negotiations with the clients, etc.
Some of the basic compliances for small businesses:
1. Shop Act or NOC from Gram panchayat
Shop Act helps businesses to regulate their own business with regards to the payment of wages, safety, etc. The licence is issued by the State Governments and varies fork state-to-state.
Shop Act also helps avail the government schemes and to open a bank account.
To register under the Shop Act, the business owner needs to register with MAITRI in Maharashtra i.e. the Maharashtra Industry, Trade and Investment facilitation cell and then apply for the shop act online.
2. Current account with a bank
Taking a current account helps plan business finances better and also helps analyze if the business is in profit or loss.
3. PAN Card
Any business in India has to get a PAN card, it is mandatory. PAN is required to be quoted during all of the financial transactions of the company as well as in the invoices and other registrations.
4. Rent agreement
Rental agreements have to be strictly abided by the tenants and the business which is on rent. The right to ownership of the property can get transferred from the landlord to the tenant if it is a lease agreement. Because of this, the landlords enter legal rental agreements that are over 12 months.
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