In a current scenario where numerous Acts across varied legislations such as corporate laws, taxation laws, labor laws, industry-specific laws etc are applicable, it is difficult for the compliance officer of the Company to ensure compliance under each of such Acts manually.
Also, Regulators in the recent past has taken active and immediate steps to penalize non-compliant companies. To name a few; by the end of 2017, the Ministry of Corporate Affairs has disqualified over 2 lakh Directors for failing to file their returns mandated under the Companies Act, 2013. So far, 6,70,318 companies have also been closed by the Registrar of Companies (RoC) in this regard.
In other cases, companies and its officers have been fined or even imprisoned for non-compliance or violation of any provisions under such applicable Acts.
Keeping in view the seriousness of compliance, there is a need for a digital platform which is capable of effectively tracking & managing compliance items under provisions of such number of applicable Acts for a given industry.
Various Acts have also prescribed the need for such digital platform. Following are some of the provisions quoting the same:
- Section 134(5)(f) of the Companies Act, 2013 requires the directors to devise proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
- Section 204 of the Companies Act, 2013 requires the Secretarial Auditor to report in Form MR – 3 whether there are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations, and guidelines.
- Regulation 17(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 requires the Board of Directors to periodically review compliance reports pertaining to all laws applicable to the listed entity, prepared by the listed entity as well as steps taken by the listed entity to rectify instances of non-compliances.
Hence with the growing pace in information technology, corporates can advantageously use governance, risk and compliance platform provided by ricago to mitigate risks and ensure compliance under multiple acts simultaneously and seamlessly without any hassle.