The importance of Statutory Compliance in an organization
People form the basic foundation of any organization. No organization can function without people. The employees work with all their sincerity to fulfill their respective roles which collectively contribute to the growth of an organization. However, for the smooth functioning of a company, it also needs to have in place proper norms and regulations, and these regulations should also be relevant to, and in fact, largely govern, the company’s interactions with its employees and its finances. This is what comprises statutory compliance. There are many statutory compliance services in Mumbai that offer tailor-made solutions to cater to your organization’s requirements.
In strict HR terms, statutory compliance can be referred to as a legal structure that determines a company’s conduct in terms of how it treats its employees. It encompasses the various labor and taxation laws of India. Of course, these laws might differ at the State and the National level, but companies must abide by them. If an organization does not adhere to these laws/regulations, it might invite legal issues such as penalties, fines, and much more. No wonder, companies usually invest a significant part of their resources to ensure statutory compliance. This has also led to the overall growth and popularity of statutory compliance services in India. Every organization must have a thorough understanding of the different labor and taxation laws in India to keep itself updated with any changes therein, which can then be implemented accordingly. Since the law system is very dynamic and prone to changes, companies should keep a tab on these changes.
It is also interesting to note that statutory compliance more or less remains the same, irrespective of whether it is a partnership firm, a private limited company, LLP, or any others. If your organization hires employees or workers and pays them salaries or wages, then it must comply with labor laws as far as monetary compensation, payment of taxes, protection, the safety of employees, and fairness of labor are concerned. You can seek assistance from statutory compliance services in Mumbai to deal with this aspect effectively.
The primary advantage of statutory compliance is that it ensures fair treatment of labor, thus preventing any employee from being exploited or being made to work for excessively long hours or in inhuman conditions. It also ensures that they are paid fairly, in proportion to the work that they have done, and that companies are maintaining the minimum wage rate. On the part of the organization too, it is always advantageous to have statutory compliance since it entails the timely payment of taxes, which in turn, keeps penalties and fines at bay. Thanks to a set of predefined rules, the Government can collect revenue and companies can also organize their financials systematically and efficiently. In a company is found guilty of non-compliance, it will have to bear monetary fines or may have to face trial in a court of law.
The following are some of the tax compliances that companies should give importance to:
- Maintaining books of accounts that have a well laid-out and fair overview of the company’s financial status. These books must be in adherence to the relevant accounting standards and audited by a certified auditor or Chartered Accountant.
- Depositing advance taxes and TDS on time, and filing returns following the norms. This varies as per the nature of the company in question.
- Conducting a statutory audit as and when the law needs it. Professional statutory compliance services in India can lend substantial help in this regard.
- Organizing all other paperwork and documentation concerning the formation and registration of the company, amongst others.