In order to legally operate, businesses must comply with certain requirements regarding the company’s transactions, labor practices and safety procedures. Before launching your business, you should know the appropriate regulations for your industry while making sure to keep a log of any costs and dates related to their compliance.
Compliance regulations can be divided into two categories: internal and external. Internal compliance measures are typically required by state governments for certain business entities (e.g. corporations, LLCs, etc.); they are formed and enforced internally by a company’s upper staff. External compliance refers to those requirements imposed and enforced by a state or federal authority.
Internal Requirements for Business Operations
Corporations have strict internal requirements, which consist of forming a board of directors, conducting initial and annual director meetings, creating and updating bylaws, providing stock to shareholders and transcribing all stock transfers. Other small businesses, including LLCs, do not have the same requirements as corporations, but each is strongly advised to keep clear and updated records of business transactions as well as any relevant changes in operations or adjustments to standards.
Document templates and compliance kits (which can contain sample bylaws or an operating agreement, stock certificates, seals and sample meeting minutes) can assist in organizing and fulfilling your internal compliance requirements. Internal requirements are largely meant to ensure that a corporation is being run with integrity and free of corruption or other corrupting elements. Some parts of the business, such as stock sales, will be governed by external compliance requirements as well.
Among the many questions you may have, we are available to answer your questions about external government requirements, annual statements or reports, franchise taxes, fines and consequences for non-compliance as well as industry- specific requirements and suggestions for internal compliance.