Starting a new business is a complicated process that requires more than just planning the production, promotion, and distribution of a particular product or service. Companies are subject to many laws and regulations that limit the types of products and services they offer and how they operate. Companies must comply with the legal constraints that apply to them in order to avoid potentially costly violations of the law. What are you doing to ensure regulatory compliance in your data landscape industry? When starting a new business, choosing a legal structure for the business is one of the most important decisions made by managers. The legal structure of a corporation affects how profits are distributed to owners and how the corporation is taxed. Common business structures include: sole proprietorships, partnerships, companies and limited liability companies. In sole proprietorships, limited liability companies and partnerships, business income is paid directly into personal income tax returns, while corporations are independent legal entities that pay taxes themselves. Perhaps the reason it is difficult to effectively communicate costs to the company is that costs are variable. Data loss = lost productivity + lost revenue just doesn`t sound the same. Personally, I believe that a stronger argument can be made by playing with the golden rule.
Treat other people`s information as you want your own to be processed. Security-conscious professionals would prefer their data to be treated with care, consideration and transparency. Corporations should be expected and encouraged to make profits, but negligence should not be rewarded at the expense of the masses. Your business is financially responsible to various stakeholders – from vendors to employees to the owner of the commercial property you rent. You are required by law to pay for the products and services you use, and you are required by law to compensate employees for their time and work. Meeting these commitments is also in your best interest as a business owner: suppliers and employees who are paid fairly and on time will continue to provide your business with the products, services and labour you need when you need them. I`m not a lawyer, and I don`t think this is an exhaustive list of U.S. or international laws regarding data storage and protection.
I would like to stress here that the legislation for this sector is not new. The fact is that the need for proper data security and governance systems existed long before the mid-90s. Your company is responsible for any damage its products or services may cause to customers. If you`re selling food, you need to take precautions to make sure people don`t get sick. If you operate a taxi service, you need to make sure your drivers are safe and sober so they don`t hurt customers in accidents. Worrying about customer safety is a legal obligation, but it also makes economic sense: customers who are harmed due to your negligence are unlikely to become repeat customers, and negative publicity about your negligence can multiply the damage to your business. A company may be constrained by various licensing and other regulatory requirements depending on the industry and activities it wishes to pursue. For example, an attorney must obtain a legal license in a particular state before he can open a practice in that state. Similarly, a restaurant may be required to obtain a liquor licence to sell alcohol. Factories could be constrained by environmental regulations such as restrictions on greenhouse gas emissions or energy efficiency standards imposed by the government.
How concerned are you about restricting your market or introducing liability due to additional legal constraints? Companies are required by law to pay the taxes they incur to municipal, state, and federal tax authorities. Tax liabilities include taxes on gross sales and taxes on net income after deducting operating expenses from gross sales. Retail businesses must also collect sales tax from customers and remit these amounts to government agencies. Companies with employees are legally responsible for withholding taxes and remittances, as well as paying payroll taxes to state and federal agencies. Like individuals, businesses are constrained by laws and organizations that protect the well-being of society as a whole. While companies like Enron have received publicity for trying to profit by ignoring their legal obligations, many of the legal constraints companies face clearly make sense and may even contribute to a company`s long-term bottom line. In most cases, companies` legal obligations are also moral obligations, and most ethical companies would follow these rules, whether or not they are legally required to do so.