The end of a calendar year marks a moment in time when we consider the goals we set for ourselves and measure them against what we achieved. We reflect on what went well and what needs improvement and we use those reflections to set our goals for the year ahead.
What we don’t often do at the end of a calendar year is legal compliance housekeeping, but perhaps we should. Legislation and regulations change throughout the year and these have an impact on your business. Perhaps your company took on more employees and has a higher turnover? These are excellent indicators of growth and success but also have the potential to attract new legal obligations.
Here is a list of 5 commonly overlooked legal issues you should review to ensure that your company is compliant this year:
1. Corporate Governance
Corporate Governance Rules apply to every company regardless of their size, and the Australian Securities Investment Commission (ASIC) will issue fines for failure to keep your company records up to date.
Make sure all relevant documents have been lodged with ASIC, and the company register is complete. Consider whether your shareholder’s agreement and constitution still reflect the nature and structure of your company.
The end of the year is also a good time to follow up with your directors to make sure they have disclosed any new conflicts of interest and share trading activities in the course of the year.
2. Privacy Principles
The Privacy Act 1998 was subject to some amendments during 2015, and as a result some of the Privacy Principles were updated. Your Privacy Policy should follow suit.
If your company experienced growth and now has an annual turnover of more than $3 million it will now trigger the Privacy Act. There are also legislative triggers for smaller businesses who deal with personal information or sensitive health and financial information.
Once you trigger the Privacy Act, your company will be required to have a Privacy Policy that complies with the Australian Privacy Principles.
Review your company’s position and if in doubt seek some advice.
3. Finance Arrangements
There is no one size fits all finance solution and Companies often find that they ‘outgrow’ their finance arrangements, particularly during growth stages. When this happens facilities will need to be amended, updated and renegotiated.
It is also important to make sure you are complying with all of your obligations under your finance facilities, particularly in relation to any security you may have offered to secure loans.
4. Contracts
There have been recent changes to provisions governing Australia’s consumer law, and any contract terms found to be unfair will be considered void and therefore no longer binding. It may be worth reviewing your consumer contracts to ensure they comply with the new provisions of the Australian Consumer Law. If a dispute arises, your company may be relying on contract terms that are no longer legal.
5. Employees
Employees are rarely overlooked, and nor should they be. They belong on this list because they are one of the most important elements of every business and because they bring with them a host of legal obligations.
Take some time to review wages and ensure entitlements comply with statutory minimums. Consider whether your Occupational Health and Safety Policy is both sufficient and effective.
Legal compliance doesn’t have to be complicated.
Spending a little time reviewing your contracts and refreshing your policies will allow you to focus on growth in 2016.
About the author:
Sarah Bartholomeusz is the founder and CEO of You Legal, a new category of law firm that provides leaders in growing companies with the confidence they need to make bold decisions in their businesses. In 2015 You Legal was the winner of the Telstra Business Women’s Award in the Start-Up category for South Australia. Sarah has published a guide-book for directors, How to Avoid a Fall from Grace: Legal Lessons for Directors – available via www.legallessons.com.au & through Amazon.
