What happens if a business is not complying with the Rules and Regulations of Jurisdiction?
Different jurisdictions in the world have different rules and regulations which are required to be followed by a business if it wants to continue doing business in that region. This is known as regulatory compliance. If the rules and regulations of the business are not followed then the business can face a number of problems in the future and can be even forced to shut down the company.
The regulatory compliance of jurisdiction may change from time to time as the business environment is very dynamic and keeps on changing. The regulatory compliance depends mostly upon the jurisdiction of the area instead of the nature or size of the business.
Why a Business requires Regulatory Compliance?
Regulatory compliance provides rules and regulations to be followed by a company in a jurisdiction. This will allow the business to avail the maximum benefits of the jurisdiction as the governing authority will be with the business.
There are a number of reasons due to which the rules and regulations need to be followed by a business. These are:
- To avoid Penalties and Punishments
The first and foremost reason to follow all the regulatory compliance is to avoid penalties and punishments. If all the rules and regulations are not followed by the business then the business will be subjected to fines or penalties or both. It is in the best interest of a business to comply with the necessary regulations.
- To Enhance the Goodwill of the Company
Complying with the rules and regulations will lead a business to build goodwill in the jurisdiction. The investors, both current and potential, will have more trust in the company and will prefer to invest more in the company.
- To gain the trust and co-operation of the Government
By following all the rules and regulations the business will enhance its trust among the investors in the region and also the business will gain the trust of the local government.
- To avail various Business Opportunities
By gaining the trust of the government, the business will have access to new and greater business opportunities. This will help the business to expand its business in newer markets and will also allow the business to increase its customer base.
- In order to maintain the Health of the Company
To keep the business working in top condition and to be at its best, the business needs to comply with all the rules and regulations of the business. After complying with all the necessary laws, the business will be able to become a part of every business opportunity in the jurisdiction.
- To Prepare for the Future
Maintaining compliance is a very big and crucial part of the business as it will help shape the future. If the business does not comply with the rules and regulations of jurisdiction then the business may lose out on certain business opportunities and this may hamper the future of the business.
These are some of the reasons due to which a business needs to comply with all the rules and regulations of jurisdiction. The above-mentioned reasons are not all the reasons and can be expanded further.
Maintaining compliance requirements can be a very hectic and complicated job and if the management singlehandedly takes on to comply with all the rules and regulations of the business then it is possible that it may miss some of the compliance requirements. Thus it is recommended that a business avails the assistance of a third party while fulfilling the compliance requirements of the jurisdiction.
If you are looking for such a firm that will help your business in following compliance requirements in the United Arab Emirates then JAXA Chartered Accountants can help you in this matter. JAXA also provides various other business services such as Auditing Services, Accounting Services, VAT and TAX related Services. To know more about the services offered by JAXA Chartered Accountants, feel free to Contact Us. We will be happy to assist you in your business journey.
