20 Jan 2025
What is Compliance?
Compliance means ensuring every component of your business follows regulatory, statutory and organisational requirements.
As a business owner, it is vital that your business is compliant with legal regulations.
Compliance can come in many forms, ranging from corresponding with ASIC to implementing data protocols.
This article will explore everything you need to know about compliance.
ASIC Compliance
The Australian Securities and Investment Commission (ASIC) is an independent body established by the Federal government under the Australian Securities and Investments Commission Act 2001.
It is primarily responsible for enforcing the Corporations Act. ASIC has the responsibility of promoting a fair and transparent corporate system in the country.
ASIC is tasked with overseeing a wide range of activities related to businesses, financial markets, and financial services.
This includes regulating companies, financial markets, and consumer credit, ensuring that all entities operate within the framework of Australian law.
Businesses must adhere to ASIC's requirements regarding financial reporting, corporate governance, and ethical conduct.
Failure to comply with these regulations can result in significant penalties, including fines, sanctions, or legal action.
Additionally, ASIC plays a crucial role in protecting investors and ensuring that businesses maintain a high standard of corporate behaviour, thereby fostering trust in Australia’s financial system.
Regulatory Compliance
Regulatory compliance requires businesses to adhere to laws and regulations that are central to the industry they operate.
Examples of this may include:
Corporate regulations that are imposed by ASIC which vary from licensing requirements to financial reporting and disclosure.
Marketing integrity and transparency which protects consumers. ACCC implements regulations to ensure that businesses are not deceptive or misleading.
Adhering to state-based work health and safety laws and being compliant with minimising health hazards in the workplace.
Taxation Compliance
Businesses must be compliant with taxation laws.
There are various different types of taxes businesses should monitor to ensure they are compliant.
Examples of taxes businesses should ensure they are familiar and compliant with include:
Income tax which requires businesses to accurately calculate and report their income tax to the Australian Taxation Office (ATO) alongside ensuring financial accuracy.
Compliance with Goods and Services Tax (GST) through charging GST on taxable supplies alongside lodging periodic Business Activity Statements (BAS) with the ATO.
Payroll Tax which requires businesses paying above a certain amount to calculate payroll tax liability and make payments to state agencies.
It is recommended businesses join a Company Compliance Plan to ensure their business is compliant with the range of regulations.
Privacy
As society is technologically evolving, compliance with cybersecurity and intellectual property (IP) laws are becoming increasingly relevant.
According to the Australian Cyber Security Centre, a cybercrime report is made every seven minutes, making it vital for businesses to ensure they are compliant with cybersecurity and IP concerns.
Legislation and Regulatory Bodies Regarding Privacy and Cybersecurity
Privacy Act 1988 (Cth)
The Privacy Act 1988 (Clth) regulates the handling of personal information and sets out guidelines for how businesses should attain information.
The Act also sets out the Australian Privacy Principles (APPs) which govern the standards, rights, and obligations around collecting, disclosing, and organisation data associated with personal information.
It is mandatory for businesses to use a privacy policy if information data such as phone numbers or emails is collected.
Lawpath offers a free template for a privacy policy when you sign up!
The Notifiable Data Breaches (NDB) Scheme is a scheme under the Privacy Act 1988 (Clth)
which sets out the requirements for businesses to notify the Office of the Australian Information Commissioner (OAIC) if a breach has occurred and is likely to result in serious harm.
Strategies for Privacy and Cybersecurity Compliance
To avoid contacting regulatory bodies, businesses can employ various strategies to ensure they are compliant with cybersecurity and intellectual property laws.
Developing a Data Breach Policy
Data breaches occur when there has been a loss or unauthorised use of sensitive personal information.
As a business, it is important to keep your customer’s data safe so that you can ensure data safety.
A data breach policy is a workplace document that can establish how your company will respond to a data breach.
A data breach policy is a proactive measure businesses can take to ensure they have a structured framework for how businesses plan to respond if they are faced with a breach.
Developing a GDPR Privacy Policy
A General Data Protection Regulation (GDPR) Privacy Policy is relevant for businesses who have a presence in the European Union (EU).
A GDPR policy covers the collection, use, and disclosure of personal information, procedures to store this data, and customer’s rights under the GDPR.
Developing a GDPR policy is an effective method businesses can take to ensure they are compliant with collecting, analysing, and monitoring data.
Environmental Compliance
Environmental compliance is a growing concern for businesses and is evolving rapidly as society plunges into a more environmentally friendly world.
Businesses are automatically assumed to have a corporate social responsibility and constantly be incorporating corporate social responsibility into their business.
Legislation Regarding Environmental Compliance
Below is a list of legislation businesses should ensure they are compliant with when managing environmental compliance.
The main federal laws that regulate business activities in Australia are:
Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act)
The EPBC Act governs the conservation of biodiversity and protection of ecosystems. This legislation prevents businesses from practices that may threaten wildlife and plant species in Australia.
National Greenhouse and Energy Reporting (NGER) Act 2007
The NGER Act establishes the legislative framework for businesses to ensure they report their greenhouse gas emissions, energy production, and energy consumption.
Water Act 2007
The Water Act sets out the rules businesses must adhere to in regard to water resource management and the allocation, quality, and sustainability of water consumption.
It is recommended to seek legal advice to determine what other federal or state laws your business is subject to when monitoring environmental compliance.
Developing an Environmental Policy
Developing an environmental policy is an effective way to ensure your business is maintaining environmental compliance.
Environmental policies set out a business’ principles and guidelines in relation to managing their effects on the environment.
In doing so, developing a strong environmental policy streamlines the task of informing all stakeholders on all actions your business is taking to be more sustainable and ecologically responsible.
Conclusion
Compliance is a critical aspect of running a business in Australia.
It ensures that your company adheres to various legal, financial, and operational regulations, mitigating risks and fostering trust with stakeholders.
Whether it’s meeting tax obligations, updating ASIC on key changes,
ensuring foreign investment compliance through FIRB, or adhering to industry-specific regulations, businesses must stay informed and proactive.
By managing your compliance effectively, you not only avoid potential penalties and reputational damage but also promote transparency and long-term success.
Implementing a Company Compliance Plan is an essential step towards ensuring that your business remains on the right side of the law,
helping you navigate complex regulatory landscapes with confidence.