In the business context, compliance means adhering to rules of different regulatory bodies relevant to running a business. It includes all the policies, practices, internal and external controls to be confirmed by an organisation.

It is an established legal principle ‘’ignorance of the law is not an excuse, “i.e. you can’t defend your actions by arguing you are not aware of the law.

The same principle applies while doing business. One must follow standards, policies, rules, and applicable acts while running a business. The level of compliance may differ depending on the type of business structure, business activity, region etc.

India, the fastest-growing economy of the world, jumped 79 positions in the last five years in ease of doing business. It ranked at 63^rd position in 2019 in ease of doing business. With recent reforms in tax and initiative of the Government of India, compliances while running business has become comparatively easier.

In India, while doing business, one has to abide by State and Central laws and local bodies regulations. The most common compliances are as below:

1. Having registration based on the scale of business like MSME registration, GST registration, SEBI and RBI compliances and filing returns therein.
2. Having registration under different acts depending on business activity and file returns thereunder like for import-export activity- IEC code is required, for any food business – FSSAI licence is required and many more. These compliances can be in the form of one-time registration or regular reporting to the governing authorities.
3. Having registration based on a Business structure like registration with MCA, registrar of firms etc.
4. Governance related compliance: Common compliances like filing Income tax returns, deducting/collecting tax at source, maintain books of accounts with uniform principles and applicable standards,

Over the past several years, with the initiatives taken by the ruling Government on tax reforms, the Compliance procedures have been progressively liberalised and simplified. However, several compliances requirements need to be adhered to. Failing adherence to compliances may result in several penal actions and, in the worst-case scenario, even closure of the business.

PRANV helps you advise on the applicability of various regulations, framing internal compliance policies and alerts you about the risk involved in non-compliance with the law.