More and more professionals are turning entrepreneur by starting out on their own. Design experts, HR professionals, marketing managers and legal executives are but a few examples. This post is largely addressed to them.
There was a time when you started your entrepreneurial venture on your own. Life was relatively simple. You pretty much got what you earned. As your business grew, you hired others and over time, your small set up became a growing firm. Life becomes a bit more complex as you hire more people.
As small enterprises grow, it becomes important for entrepreneurs to be compliant with applicable legislation. Ignorance of the law, as the old saying goes, is no excuse for breaking it. Tedious as it may be there are regulations relating to licenses, Service Tax, Professional Tax , Provident Fund etc which need to be attended to as your business grows.
Provident Fund is an example of deferred wage. Every month the employer is required to deduct a certain percentage of the employee’s salary and contribute the amount to a fund. A similar contribution is to be paid by the employer. The Employees’ Provident Fund Organisation, India has details for employers.
In earlier times, the Employees Provident Fund Act was applicable if you employed 20 or more employees. This is being amended to make it mandatory to have PF coverage if you employ 10 or more employees says an article in the Financial Express.
Likewise, depending on the salaries paid, Professional Tax is to be deducted from your employees each month.
Whether you like it or not, you need to understand and address these issues. The extent of default may be minor but the hassles that follow can be a nightmare. Get acquainted with your responsibilities and make sure that you have someone who ensures you stay on the right side of the law.
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This is Post No: 216 of the “A Step A Day” series : To provide perspective and provoke thought to facilitate self-development across a wide spectrum of issues- big and small- crucial for executive success