Corporate compliance is a broad topic that covers a variety of regulatory issues related to running a corporation. Corporate compliance will ultimately improve performance and help develop company culture.
There are internal and external compliance procedures, regulatory procedures based on the way a business is structured, and federal and state policies for compliance.
In order to operate within legal compliance status, your corporation should follow each of the applicable regulations. By appointing a corporate compliance officer, and establishing a compliance committee, you are more easily able to ensure compliant status and adhere to regulatory guidelines.
Take a look at some compliance considerations below.
If you need support to achieve corporate compliance, the specialty consulting services offered through Hunter Stevens LLC will help you develop an effective compliance plan.
Internal and External Policies and Procedures for Business Compliance
In order to be considered legally compliant, your corporation must perform certain internal and external tasks or operations.
Generally, internal compliance includes certain types of record-keeping and documenting of operations. You may also need to inform shareholders, or the general public about business operations in order to stay legally compliant.
The most typical external compliance procedures include filing certain documents and paying local, state, and federal taxes.
Compliance Based on Business Structure
Organizations and businesses are all structured differently. Regardless of the type of business structure of your organization, Hunter Stevens LLC can provide experienced support to help you achieve and maintain compliant status.
Compliance for LLCs
Limited Liability Companies or LLCs are subjected to fewer internal requirements when it comes to compliance.
It is advisable for organizations that are structured as LLCs to perform the following internal compliance practices:
- Host annual meetings
- Issue membership shares
- Record membership interest transfers
- Uphold a current operating agreement
Compliance for Corporations: C-Corps & S-Corps
Corporations must adhere to more stringent qualifications in order to operate with legal status.
Businesses structured according to a corporate format are obligated to perform the following internal compliance procedures:
- Create and maintain bylaws
- Initial and annual director meetings
- Issue stock to shareholders
- Record meeting minutes
- Record stock transfers
- Shareholder meetings
Federal and State Laws for Compliance
Staying within legal compliance of state and federal laws will depend upon the industry of your business and the location of your business.
State Compliance Procedures
Depending on which state your business is registered in, you may have to perform any or all of the following compliance practices:
- Annual reporting
- Pay statement filing
- Provide initial reports upon incorporation
- Submit franchise taxes (if applicable)
Federal Compliance Procedures
Federal compliance practices require ongoing filing, while other regulations may only need to be completed one time only.
One example of ongoing federal compliance is paying federal taxes and following corporate executive compliance guidelines.
Another example is related to healthcare. Those corporations with 50 or more full-time employees (or full-time equivalent) are considered ‘large employers’ by the federal government. Inasmuch, to maintain compliant status, these companies must provide health coverage options as part of their benefits program (according to the Affordable Care Act.)
Certifications, Licenses, and Permits
If your business structure or industry requires that you obtain and maintain certain certifications, licenses, or permits, it will be necessary to acquire them initially upon incorporation and keep them up-to-date. Ensuring that your certificates, licenses, and permits are in order and compliant with federal law is your ongoing responsibility.
If you need support identifying which certificates are mandatory for your business structure or industry, keeping track of upcoming renewals, or updating licenses and certifications, the specialty consulting team at Hunter Stevens LLC can help. We have 30+ years of combined experience in federal and state corporation compliance.
Selecting a Compliance Officer and Committee
Designating a compliance officer is an important step for any corporation. By establishing a compliance officer within your organization, you assure that internal corporate governance is in place. You also minimize legal risks and liabilities of non-compliance.
Appointing a Compliance Officer
A CCO or corporate compliance officer will be responsible for enforcing compliance procedures across business levels and activities. A CCO can be instrumental in the achievement of corporate goals.
The compliance officer will implement a compliance plan, address legal and ethical concerns, establish a document and record-keeping program, perform intermittent risk assessment, determine compliance training protocol for employees, and more.
In some cases, a corporation’s compliance officer (CCO) may perform compliance audits, identify compliance violations, and provide feedback to reduce compliance errors.
Selecting a Compliance Committee
A team of individuals from your organization’s executive employees can serve as a compliance committee. This means that in addition to a CCO, several high-level staffers work together to ensure compliance across the organization.
The compliance committee will assure that regulatory compliance duties are met in each business department and address issues before they become large-scale compliance problems.
Committee members should each be well versed in the federal and state compliance regulations that apply to your business corporation for both internal and external procedures.
The corporate compliance officer can provide broad training to the committee members. Then, the CCO can offer more specific and in-depth training and education on regulatory compliance based on the department that each individual committee member oversees. This can be helpful so that, while the corporate compliance officer is the most knowledgeable on all regulatory and compliance topics, each committee member knows the rules of compliance as they relate to their department.
Corporate Compliance Support for Your Corporation
Whether you are incorporating a new business organization, or have been in operation for many years, compliance and adhering to regulatory procedures is a must. While some business protocols may not be required by law, if your organization does not practice certain compliance tasks, the fate of the business could be at risk or assume increased liability.
The experienced team of professional consultants at Hunter Stevens LLC can provide your business and c-level team with comprehensive compliance training and support. We’re here to identify your business’s unique compliance needs, help you acquire necessary licenses and permits, appoint compliance officers and committees, and more. Call today to request a corporate compliance plan.