Businesses: staying compliant in 2016

The start of a new year often sees small businesses reviewing the past year on what worked well and what needs improvement, and using those reflections to set new goals for the year ahead.

What many businesses fail to do at the start of the new year is legal compliance ‘housekeeping’.

Changes in legislation and regulations throughout the year can often have an impact on your business that you’re not aware of. Or perhaps your business now has more employees or a higher turnover; two factors that have the potential to attract new legal obligations.

Here are some commonly overlooked legal issues business owners should review to ensure that they remain compliant for the year ahead:

Corporate Governance
There are many rules that apply to every business regardless of size. Keeping your records up to date, for example, is one such rule that will result in a fine from the Australian Securities Investment Commission (ASIC) if broken.

Owners should make sure all relevant documents have been lodged with ASIC, and the business register is complete. It may also be a good idea to review your shareholder’s agreement and constitution to make sure they still reflect the nature and structure of your company.

Privacy principles
Some amendments were made to the Privacy Act 1998 during 2015, and as a result, some of the Privacy Principles were updated. Businesses that now have an annual turnover of more than $3 million will trigger the Privacy Act.

Legislative triggers also exist now for smaller businesses who have dealings with personal information or sensitive health and financial data. Upon triggering the Privacy Act, your company will be required to have a Privacy Policy that complies with the Australian Privacy Principles. Make sure you review your company’s position and if in doubt, seek professional advice.

Finance arrangements
When a business ‘outgrows’ their finance arrangements, facilities will need to be amended, updated and renegotiated. Businesses also need to make sure they comply with all of their obligations under their finance facilities, particularly in relation to any security they may have offered to secure loans.

Recent changes have been made to provisions governing Australia’s consumer law. Any contract terms that are found to be unfair will now be considered void and therefore no longer binding.

Consequently, it may be worth reviewing your business’s consumer contracts to ensure they comply with the new provisions of the Australian Consumer Law.

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