This article has been written by Shahil Rangra an engineer cum lawyer.
Introduction
In general compliance plays a role in the governance of a company as per the criteria set by an authority either itself or by the government. Proper adherence to the set norms in an efficient manner is the key to perform compliance. Some of the compliances include the list of licenses required for the operations of a company. The acts and laws related to licenses, etc.
Type of compliances are as follows:
• Company formation compliance.
• Governance and rules compliance.
• Risk and safety compliance.
• HR compliance.
• Data privacy and safety compliance.
• AML compliance.
• Statutory compliance.
• Commercial contracts compliance. etc
- Statutory compliance: It is the proper adherence of a company to the set statutes of each country. There are several laws in India which regulate the affairs of particular matters e.g. company act 2013, the employees provident fund EPF, Trade union, Maternity benefits etc.
- HR Compliance: The matters which are dealt by the HR department of a body corporate covers under it such as the Shops and establishment act, Factory act, EPF Act, ESIC act, Professional Tax act, Labour welfare act, Maternity benefit act, Contract labor act, Minimum wages act, Payment of wages act, Payment of gratuity act, Payment of bonus act etc.
- Private company formation compliance: The work usually done by a CA. It requires following to have after corporation such as the Bank account and share capital certificate, commencement of business certificate, Board meeting for first auditor appointment, GST number, Registered office info to ROC, Income tax Vid and password. The the Monthly/yearly compliance requirement are AGM within 9 months, next AGM within 6 months, Declaration of director interests, appointment of subsequent auditor, Board meeting directors, balance sheet and annual account, filing financial statements form, filing annual return form, ITR Tax audit, Director KYC, Form MSME-1, E Form DPT etc.
- Governance and Risk compliance(GRC): This is the first line of defense in a corporate body where the policies of the companies are formulated in proper coordination to the statutes of a country. The policies then govern the relations among employer, employees and the customers of a service. It is the most important because it sets coherence among various departments. Thereby regulating the conduct as per the set standards of a corporation. It eventually reduces future risks.
- Anti-Money laundering compliance(AML): It is done to prevent money laundering by activating the AML program in a company. There are AML certifications one can check if they want to learn.
- Commercial contracts compliance: There are several agreements that govern the relations of an employer, employee and the customers that need to be well formed and drafted. Such contracts are as follows. Employment agreement, Employee invention assignment and confidentiality agreement, Non disclosure agreements NDA, Request for proposal agreements, Service level agreements SLA, Master service agreement MSA, Statement of work SOW, licenses agreements, consulting agreement, vendor service agreement, Security and privacy addendum, Request for proposal agreement, Data protection agreements etc.
- Data privacy compliance: In today’s world it is the most crucial compliance and the reasons are many. Liberty of a person is his personal property that holds his dignity to himself. It is his right under Article 21 of COI which is secure and protected as a fundamental right. Being a fundamental right it is enforceable before the court of law. This makes a company follow the ethics of complying with it. In the following ways it can be done. Understanding the business process, listing out the data type of a company process, checking the internal involvement of data in business verticals, doing privacy assessments, setting privacy policy to public domain, doing periodic reviews, advising different stakeholders etc.
- Risk and Safety compliance: It is crucial in industrial settings. There are such enactments which govern the safety norms that must be adhered to otherwise could result in heavy Penalties. Such as the prevention of child labour.
Therefore, in the nutshell, a compliance role is crucial to ensure the procedure be followed as per standards thereby preventing the futuristic issues. It eventually supports the structure of a company by providing stability and security.