Compliance issues you must be aware of before you start your own business

Compliance issues you must be aware of before you start your own business

When you start out as an entrepreneur, you need to be aware of the compliance issues that relate to a business. Businesses operate within a structured environment of the economy and need to be regulated.

With time, as your profits increase, it’s better to work with the relevant professionals in the different fields, like accounting, tax and legal so that you’re sure your business is compliant. This is because it’s very difficult to stay on top of all the legislation and industry changes for all the different disciplines, while trying to run your business effectively.

But even when you do outsource these services, it is still your responsibility to ensure your business remains compliant, so hire the right suppliers and keep an eye on them.

Here are some of the important acts and policies you will need to comply with to avoid costly penalties or risk losing your business… 

1. Employment contract: Small or big, the law states that you must give your employees a written contract that explains the terms and conditions of their employment. Check out the Basic Conditions of Employment Act before you draft your employees’ employment contracts.
2. Occupational health: Your employees’ safety at work is protected by law. The Occupational Accidents and Compensation Fund makes provisions for your staff, should an accident or injury happen at work. 
3. UIF: The Unemployment Insurance Fund (UIF) is as a temporary fund that provides a safety net for people who are retrenched or unable to work due to illness or maternity leave.?You have to register with this fund when you have employees and it is your responsibility to deduct UIF from their wages or salaries. Your employees will then be able to claim from the Department of Labour when they are unable to work.
4. CCMA: The Commission for Conciliation, Mediation and Arbitration (CCMA) is an independent body that resolves labour disputes. But it also provides advice and training on labour relations so it’s a good place to start to understand Labour Relations.
5. Tax and VAT: The South African Revenue Services (SARS) does not lightly to anyone who doesn’t pay their full share of taxes. As an employer, you are liable to declare your employees’ earnings too. Definitely not one to mess with! Find out what and when you have to submit your paperwork and pay your taxes on time!
6. Employment Equity (EE): The law requires you to have an EE plan to ensure equity amongst the racial groups in your company. This generally applies to bigger businesses but if you supply big businesses, they in turn have to account for their suppliers’ equity statuses so either way, it’s a process you will have to eventually tackle.
7. The Consumer Act: This piece of legislation protects the customer against companies behaving in an unethical way. You need to be aware of the clauses in this act from the moment you market your product to the very first customer so definitely a must!
8. Zoning laws: If you want to start a one-man business and your clients don’t come to your place of work often, you can operate from your home. But when you start hiring staff and have clients visiting you, you need to either move to offices or get your home rezoned for business with the City Council. This can take up to a year and there is no guarantee that the residence will be licensed for business.
9. Skills Development Levy: Businesses must pay around 1% of the value of their employees’ pay to this levy?every month. The money goes to Sector Education and Training Authorities (SETAs) and the Skills Development Fund for the provision of grants for training previously disadvantaged people. 
10. The companies Act: This governs the way companies are formed and managed.
11. Financial Intelligence Centre Act (FICA) and Regulation of Interception of Communications (RICA): This is based on an international regulation that fights organised crime. Whenever you open a bank account or any other account at a financial institution or cellphone or internet service provider, you will need to show your ID book and proof of residence. This is so that the government can keep track of everyone who has these accounts to prevent fraud and terrorism.
12. Protection of Personal Information Act (Popi Act): This legislation protects the consumer against identity theft and the misuse of their personal information, including email addresses and contact numbers.So you can’t spam people anymore, this is against the law. You have to ask them if they want to receive your communication before you send them anything.

These are main compliance issues you will need to be adhere to as a business owner. Remember, there’s no way you can run a business on your own and stay on top of all these issues. Find a business mentor that can advise you on these until you can afford to hire accountants and lawyers.