This is the second post in a series of articles discussing the importance of compliance for Tacoma or Olympia, Washington businesses. The previous post provided an overview of the topics that will be addressed in this series. It also emphasized the importance of consulting with an experienced business attorney when assessing compliance risk and developing solutions for your company. In this article, we will discuss the need for and potential impact of maintaining an effective compliance program. If you need assistance, contact our firm today to speak with a lawyer.
Generally speaking, compliance means abiding by the laws, rules, and regulations that apply to a company’s business activities or projects. Compliance can mean different things in different bushiness contexts. While there are many laws that apply generally to all businesses, other laws apply to companies in specific industries, or even to specific projects or project types within an industry. For example, many employment laws apply across the board to businesses who have employees. On the other hand, statutes restricting a hospital’s disclosure of personal health information would not likely apply to a manufacturing company; while the manufacturing company may be subject to environmental laws that do not impact a computer programming business, and so on. To determine which laws apply to your business, it is essential to conduct a thorough assessment appropriate for your industry, projects, and location.
The consequences of failing to comply with applicable rules are numerous and often onerous, depending upon which laws are being violated and the severity of the violations. Ramifications of noncompliance can range from a loss of reputation in the company’s state of registration to loss of a key license or permit, which can cost business opportunities or even result in business failure. For example, Washington businesses that fail to file an Annual Renewal report when due are listed as “inactive” and be subject to late fees or other penalties. If company financing documents require the business to maintain its good standing, this could lead to a technical breach of a credit obligation. More serious violations can result in fines, suspensions or, in some cases, personal civil or criminal liability for executives.
We cannot overemphasize the importance of conducting a risk assessment to identify any compliance risks that may apply to your company. Only then will you be equipped to develop a program to monitor and prevent violations. If you need assistance with a compliance matter, contact our firm to speak with an Olympia attorney. Our firm also services the Thurston County cities of Lacey, Tumwater, and Yelm, the Pierce County cities of Tacoma, Puyallup, and Lakewood, the Lewis County cities of Centralia, and Chehalis, the King County cities of Seattle, Auburn, Bellevue, Burien, and Federal Way, as well as other areas in Washington, including Grays Harbor, Mason, Cowlitz, and Pacific Counties.