Effective compliance management systems are not only crucial for large businesses. They are also increasingly important for small and medium-sized businesses in order to avoid unwittingly infringing laws and regulations.
GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London - www.grprainer.com/en conclude: It is not only large corporations that have become global players. More and more small and medium-sized companies are operating internationally as well. However, cross-border transactions also entail a greater risk of infringing legislation and regulations, even if this only happens unwittingly. Corporations typically implement compliance management systems as a way of protecting themselves from this risk. This kind of effective monitoring system might also become ever more important for small and medium-sized businesses.
This is because those who operate internationally are faced with many challenges as well as risks. International laws and regulations need to be complied with and attention must be paid to the demands of foreign business partners. The human resources of small and medium-sized companies can quickly be stretched to their limit when faced with such complex demands. An effective compliance management system can therefore protect them and prevent unwitting legislative and regulatory infringements.
Compliance management systems monitor compliance with contractual provisions and statutory regulations to prevent criminal acts being committed from within the company by employees. Flexibility is one of the strengths common to many small and medium-sized businesses. This ought not to be compromised by a compliance management system, which is why the latter should be suited to the respective company and offer tailored solutions that take into account the diverse demands placed on the various different positions within the company.
A compliance management system is not primarily about monitoring and supervision; rather, it serves to protect the business from economic damages and losses. If legal infringements arise, these could result, for instance, in substantial claims for damages. These can potentially threaten the continued existence of a business.
For a compliance management system to be able to meet all of the relevant requirements, it ought to be tailored to a company’s specific needs. Moreover, it should not simply be a matter of setting up the compliance management system. In order for it to fulfil its function, its effectiveness ought to be regularly assessed. Lawyers who are competent in the field of commercial law can be of assistance in implementing and supervising a compliance management system.
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