Ensuring that your business remains compliant with rules and regulations can be a difficult task – but one that can be made far easier with the help of a solicitor.
Continuous updates to legislation, changes at Companies House and the shifts in corporate requirements caused by developments in Europe can create a vacuum on your valuable time as you attempt to keep your firm compliant.
By seeking the assistance of experienced corporate law specialist solicitors, you can save yourself inordinate amounts of time, and provide your business with the very best protection against the risk of being non-compliant. Contact First4lawyers to find out how our team can help you.
What is corporate compliance?
Corporate compliance involves the setting and governance of policies and procedures around the conduct of a company, its directors, and its employees so as not to fall foul of laws and regulations.
Often firms will set a corporate compliance program which is meant to lay out these rules and help detect and encourage whistleblowing in any instances where there’s wrongdoing.
Every business has statutory obligations to meet in order to avoid falling foul of the legislation laid out in the Companies Act 2006.
This piece of legislation updates the legal requirements that every business has had to comply with since some of the first UK business laws were passed in 1844, when the Joint Stock Companies Act was introduced.
The Companies Act 2006 details the statutory duties of all company directors. These duties include:
- To act in accordance with the company's constitution.
- To promote and work in the interests of the company’s success.
- To exercise independent judgement.
- To exercise reasonable care, skill and diligence.
- To avoid conflicts of interest.
- To reject benefits from third parties.
The Companies Act 2006 also requires all limited companies to keep statutory registers, which are documents that demonstrate corporate compliance. These documents must be created when the company is brought into being, and stored at the registered office address.
The creation of the statutory register documents is the responsibility of the business itself, and the registers may be required when opening bank accounts, or when applying for financial support in the form of loans or other funds.
What can a solicitor do for my company?
Solicitors with experience in corporate compliance can be invaluable in helping you to navigate the complexities of statutory registers. If you are found to be operating a business that does not have one in place, or if your registers are not accurate and comprehensive, you could be liable for a fine of up to £5,000.
As such, it is advisable to keep digital and physical copies of your corporate compliance documents, with numerous back-up copies on file.
What is the cost of corporate compliance?
The cost of remaining compliant differs from company to company. Depending on the size of your organisation, the work you do, the amount of money you make and your prospects for growth, your compliance obligations may be very different from those of another company.
Remaining compliant comes at a cost to your business, because of the time required to complete the requisite statutory accounting, corporate, and tax obligations that all companies face.
There will be costs involved in the production of annual accounts at any limited company, while limited partnerships may also need to foot the bill to have their accounts audited in order to satisfy the needs of investors.
The cost of corporate compliance increases the moment that your company ceases to be compliant, as you become vulnerable to potential penalties. You might incur penalties if you fail to:
- Submit your compliance returns correctly and on time.
- Show in your returns that you have met your compliance obligations in full.
- Balance the expectations of shareholders, regulatory authorities, tax bodies and the government.
Letting these sides of your business slip could lead you into legal difficulties. A solicitor with a strong history of advising companies on their obligations can be an invaluable asset to your company.
I require legal assistance to make sure my company is compliant – what should I do?
You can have a corporate law specialist solicitor look into your business to assist with a particular phase of legal arrangements, such as the creation of statutory registers when your company is being formed.
Alternatively, you could bring a commercial solicitor on board to help review or create a corporate compliance program that can help detect any issues that could affect your firm from a legal standpoint.
First4lawyers can provide you with a no-obligation discussion of your circumstances and help you to make a corporate compliance plan that protects your business. Contact us to find out how we can benefit your company.