Breaking the law is one way to tank your business. You not only have to pay an unsurmountable fine, but you will also get so much bad press and you may lose the trust of your customers — both old and new.
When you are overseeing dozens or hundreds of employees, it is difficult to keep track of every activity and transaction. Here are the ways you can ensure that your business stays on the right side of the law:
Know the Laws
As the saying goes, ignorance of the law excuses no one. Even if you have no ill intention or if you do not know that you have broken the law, you will have to face the consequences of your actions.
The best thing you can do to protect your business and yourself is to be familiar with all the rules and legislations that apply to you and your business. You can consult experts in this task to make sure that you do not encounter any legal problems later on.
For example, a service that provides financial sanctions screening can help you spot any issues that may arise and lead to civil or criminal penalties.
Do Not Misclassify Employees
Some businesses escape local legal requirements when it comes to employment by misclassifying employees as “independent contractors.” Those who do this are at risk of being sent to court.
Similarly, employers that say that some of their employees are exempt from overtime pay may face penalties and other legal consequences. An employee must meet the salary and job duties requirements as stated in the Fair Labor Standards Act to be exempt from overtime.
Pay Your Taxes
A business has to pay several different kinds of taxes to the government. It can be a little confusing, but failure to pay the right amount is going to cause you big problems. The Internal Revenue Services, or IRS, will impose huge penalties that you to pay. In the worst-case scenario, you might get slapped with a criminal charge and go to jail.
There is no other way to avoid getting penalties aside from filing the right taxes. If there are other aspects of your business that needs your constant attention, it would be better to have an in-house or an outsourced bookkeeper and accountant to oversee your finances and make sure that you are complying with the regulations set by the local and national government.
Improper Use of Your Investors’ Money
If you are entrusted with money, you have to be careful with how you spend it. The misuse of investors’ funds is a crime that will lead to significant fines or jail time. Therefore, you do not want to buy a sports car or a holiday home with the budget that is supposed to be spent into finding new customers, launching a new product or service, or expanding to another market.
Transparency is essential for the business to run smoothly. It establishes trust between management and employees. Moreover, it will ensure that everyone is complying with the appropriate regulations and requirements.
Keeping tabs on everything is going to be difficult, but it will prevent problems from arising later on. Simply make sure that you are aware of legislations that apply to your business and always be honest. Treat your employees properly.