Page 72 - IMDR MSME BOOK 2021

Managing Finance in Micro, Small & Medium Enterprises
activities etc. Any of these do not have only a singular
impact.

If a business is charged with a penalty, questions arise in
mind of its debt providers, who may look for an exit, if the
non- compliance is serious in nature. It damages the
reputation of the business as well, which impacts the
credit extended to it by the suppliers. The tainted image
which gets popularized due to omnipresent media, also
impacts the decisions of the buyer.

In case of suspension of business activity, market share
established with continuous efforts, stands a chance to
deteriorate. The attitude of all stakeholders’ changes due
to any incidence of non-compliance.
Currently in Maharashtra, many statutes are applicable
to a business entity. Few common among them are,
Income Tax Act, 1961, GST Act 2017, The Maharashtra
Shop and Establishment Act, 1948, Indian Contract Act,
1872, Sale of Goods Act 1930, Factories Act 1948. Apart
from these the law relating to incorporation depending
upon the structure of business, needs to be complied
with. About 50 labour laws are currently present in India,
which change according to state as well, but all of them
are not applicable to all businesses.
While compliance management may seem like a time and
money consuming activity, with no real monetary
benets, but it is not so. Generally business owners tend
to be negligent towards them and show laxity towards
timeliness and discipline related to compliance
management.

Fullling the compliance requirement may not provide
any tangible benet, but it certainly avoids a lot of
troubles in future. It saves a long time, money and efforts
in the form of avoiding penalties, litigations, solicitor
expenses.