Company compliance is one of those things that you simply have to do, even if your company is small and you’re the only director. While the paperwork may seem relatively easy, it’s governed by the 509-page Corporations Act, which is as complex as it is lengthy.
If you miss something you could find both your company and yourself in hot water, facing significant penalties or even jail time. That’s why it makes sense to outsource company compliance for individuals just as much as for large-scale companies.
Outsourcing company compliance takes away the complexity (and the pain). Rather than trying to work out which form you’re supposed to complete by when, you can rely on experts who do this day-in and day-out to do it for you. If you’re not an expert in company law, it can be quite difficult to sift through all the information and forms and make sure that you’ve covered all your bases.
Some outsourcing companies may even be able to store all your documents for you, reducing paperwork and saving your precious space.
Depending on the nature of your business, you may need specialised knowledge, processes and even technology in place to comply with your corporate obligations. These can be costly to implement from scratch and require expert skills to get them right. If you aren’t entirely sure that you know what you’re doing, one company compliance mistake can end up being quite costly.
If you outsource your compliance, you can rely on your service provider to advise you on your business needs and they can probably even help you implement the processes in your business. You may even be able to use their technology as well. This can actually reduce the costs of your compliance and take away a large part of the complexity associated with it.
If you do decide to take on the responsibility for company compliance yourself, it’s important to factor in the time that it will take away from what’s really important – running your business. While it may cost you less on the face of it, the opportunity cost of your time is probably worth a lot more. Outsourcing compliance means you can spend your precious time building your business and looking after your customers, with the peace of mind that the Australian Securities and Investments Commission (ASIC) is less likely to come knocking at your door.
If you don’t meet your company compliance obligations there are several things that may happen. At one end of the spectrum, you may receive a warning letter from ASIC asking you to remediate the situation quickly. This means you’ll probably have to drop everything you’re doing to work out how to fix the issue and report back to ASIC.
You may also be fined or even find yourself in court. Fines can be as high as $200,000 for individuals (although there is currently a paper recommending that this is increased to $1.05 million) and $1 million for companies (which may be increased to $10.5 million).
At the other end of the spectrum, if your oversight or mistake involves misconduct it can even result in jail time. The Australian Government and ASIC are clearly getting serious about compliance penalties and it is expected that the proposed changes will come into effect sometime soon.
One of the advantages of outsourcing company compliance means that it can show ASIC you’re serious about compliance. So, even if they find an issue with your company compliance before it was outsourced, the fact that you’ve sought the help of a company compliance professional can show them that you take your obligations seriously and want to invest in meeting them.
A company compliance specialist can help you meet your compliance obligations in several ways, including:
If you do decide to outsource to a specialist, it’s important to assess the risks and make sure you choose the right provider. First, make sure you’re clear about what you want to achieve and the level of involvement you would or wouldn’t like to have in your company compliance program. This can help you outline what you need your compliance service provider to do and clarify each of your responsibilities.
It’s also a good idea to look at the service provider’s track record. Are they based in Australia? How long have they been operating for? These all give you an indication of their experience and stability.
The reality is that company compliance is not a nice-to-have – it’s an essential part of running your business. It’s really up to you how you choose to do that, but as an individual, it can be overwhelming to take responsibility for every aspect of your business.
If you’d like to know more about how you can outsource your company compliance, get in touch with us. We’re based in Melbourne and Perth but have customers all over Australia. We’d love to help!