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Are You in Compliance? 6 Reasons Why It Matters

complianceWith all of the rules and regulations established by local, state and federal government, it can be a challenge for a business to remain compliant with the law. Regulations are constantly changing, so it can be difficult to stay up-to-date on how you are supposed to operate. Even if you are well aware of the rules that apply to your business, you have to make sure that your vendors and staff are following proper procedure. If you want to seek investment, sell an asset, or change how your business is organized, maintaining your legal compliance is a necessity.

Here are the top six reasons why compliance matters.

1. Maintaining “Good Standing”

The State of Florida expects businesses to file reports annually to maintain current contact information and basic details of the business. There are so many benefits that come with being in good standing with your state. Numerous business activities require a current state registration, like opening a bank account, and obtaining credit or a loan, so it is important to stay current with your filings.

2. Seeking Investment

Seeking investment requires sharing your books and records with the prospective investor, to prove your revenue and help the investor assess risk. Investors are looking for liabilities, especially when it comes to complying with legal requirements. For example, a mechanical repair company that has failed to take the environmental precautions necessary to prevent oil and other chemicals from leaching into the ground would be an unattractive investment because the failure to comply with environmental laws creates huge risk. The expense of mitigation would be subtracted from the prospective profit, and may not be worth the risk.

3. Expansion

If your business is seeking to grow, you might decide to open up a location in another county or state. Each county has requirements for payment of business taxes and registration of certain types of businesses and professionals. Without having established the legal foundation in your first location, another county may refuse your operating license. The same is true for state filings. If your business is not in good standing, it will not be possible to register with another state governing body before you resolve your status.

4. Fines and Penalties

In order to discourage businesses from ignoring the law, heavy fines can be levied for offenses. There may be fines, interest, and penalties.

5. Delinquent Status

When a business fails to comply with the law, the governing body can cite the business, or list it as suspended, or dissolved. Avoiding these issues is important, because should the business be cited, the delinquency is noted in public record.

6. Property Sale

Often in real estate transactions, buyers want to verify that the property does not have any code violations or errors in title. If you cannot resolve the legal deficiencies, that may effectively end the possibility of a sale. Confronting the compliance issues with the property before trying to sell is wise to improve the value and the speed of the transaction.

Are You Sure Your Business Is Compliant?

With the various state and federal rules and regulations surrounding business, it can be difficult to know when you are not being compliant. If you are uncertain, J. Muir & Associates can help. Our qualified professionals are happy to discuss your current situation and advise you on what you need to do to keep your business compliant. Give us a call today at  786-533-1100 or contact us online.

 

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