How to strengthen the legal and fiscal security of your company?

Improving the legal and fiscal security of your business is essential in the current regulatory environment. Faced with ever more demanding laws and the risks of non-compliance, it is vital to adopt solid strategies to protect your interests.

The (ECF), established by Decree No. 2021-25 of January 13, 2021, is a key device for securing your tax returns and strengthening your legal security, especially in the event of a tax audit. Open to all businesses, the tax compliance review reviews several important aspects such as compliance and accounting quality, as well as compliance with document retention rules and the tax treatment of depreciation and provisions.

Opting for an ECF offers significant protection, including the exemption from certain penalties in the event of a tax audit. This article explores how ECF, among other practices, can strengthen your business governance, optimize tax management, and ensure adequate legal assistance in the event of litigation.

Optimizing corporate governance for regulatory compliance

Role of the board of directors and the responsibility of managers

The board of directors and managers are critical to establishing and maintaining effective, regulatory compliant corporate governance. Their mission includes the definition and classification of business processes, the identification of risks, the assessment of the controls in place, and the verification of compliance obligations to ensure optimal regulatory functioning of the company.

They should also review risks across departments and divisions to understand the current status and identify where improvements are needed. By involving all branches of the business, they can develop and implement strategies and action plans that address gaps and meet all governance, risk, and compliance requirements.

Importance of implementing robust internal procedures

Establishing robust internal procedures is critical to ensuring regulatory compliance. These procedures should include internal controls for the prevention, detection, and correction of non-conformities. Preventive controls aim to avoid errors before they occur, while detection checks are used to identify and investigate discrepancies.

Correction makes it possible to resolve mistakes or shortcomings in order to avoid their repetition. It is also vital to define risk thresholds, tolerances, and indicators to measure and monitor changes in practices or regulations, thereby promoting a compliance culture where all employees are committed to the principles of governance, risk management, and compliance.

Continued training for teams on regulatory requirements

Continuing education is essential to ensure regulatory compliance. It is essential that all members of the company are periodically trained on regulations and best practices to improve their skills.

This training must be relevant to the activities of the company, thus contributing to the protection of the public and to the valorization of professions. Businesses should organize these training sessions according to a predefined schedule and report them regularly. This ensures that teams stay up to date with the latest regulations and standards, minimizing the risk of non-compliance and its consequences.

Adopt proactive tax management practices

Use of internal tax audits

Integrating internal tax audits is essential for a proactive approach to tax management. These audits aim to detect potential tax obstacles and risks in advance before they turn into significant problems.

A thorough tax audit reviews tax returns, the accounting entries file (FEC), financial transactions, and accounting practices to identify any irregularities or errors that could prove costly.

The purpose of these audits is not only to rectify current mistakes, but also to strengthen the structure of your organization to prevent future pitfalls. By making audits a regular part of your process, you are fostering a culture of tax compliance in your business, ensuring effective collaboration between all departments to maintain due diligence.

Engagement with tax advisers for regulatory monitoring

Using a tax advisor is a strategic approach to improve the tax management of your business. These experts guide and support businesses in their economic decisions to minimize taxes while complying with legislation.

They are constantly informed of current regulations and keep up to date with legislative and fiscal changes.

Tax consultants offer tailor-made tax optimization strategies, defend the interests of their clients during tax audits, and ensure compliance with tax legislation. They also conduct legislative and fiscal monitoring, allowing your business to stay informed of the latest laws and take advantage of available tax reduction opportunities.

Tax compliance review: a preventive tool

The Tax Compliance Examination (ECF) represents an effective preventive measure to ensure the financial and legal security of your business. It assesses the company's compliance with tax obligations on 10 essential points, such as tax returns, the accounting file, and accounting practices, with the aim of identifying errors and non-conformities before they are detected by the tax administration.

Performing an ECF reduces the risk of tax adjustments and associated penalties, such as fines and late payment interest. In addition, in the event of a subsequent tax audit, no penalty or interest for delay will be applied if the audit concerns items already validated by the ECF.

This greatly reinforces the legal and fiscal security of your business.

Legal protection and assistance in case of litigation

Implement legal protection insurance

Implementing legal protection insurance is essential to secure your business against legal risks. This coverage includes various types of disputes, including those related to suppliers, customers, employees, as well as tax administration or URSSAF audits.

Professional legal protection insurance offers key services such as legal advice by telephone, the amicable resolution of disputes, and the coverage of legal defense costs. It also offers access to legal experts for document review, document template creation, and comprehensive legal representation.

Dispute management strategies and alternative dispute resolution mechanisms

Effective dispute management relies on proactive strategies and the use of alternative dispute resolution methods. Identifying and analysing potential sources of conflicts is essential to prevent them.

Tools such as contract terms, mediation, and arbitration help minimize the risk of disputes and resolve disputes amicably and quickly. Mediation and conciliation involve a neutral mediator to help the parties reach an agreement, thus avoiding long and costly court proceedings. Arbitration offers a quick and final solution, chosen by the parties concerned. These alternative methods are generally more efficient and economical than traditional judicial procedures.

Up-to-date documents and policies: a shield against unexpected checks

Keeping internal documents and policies up to date is vital to guard against surprise checks and potential disputes. There is a need to regularly update commercial contracts, risk management policies, and regulatory compliance procedures.

Periodic verification and updating of documents such as the accounting records file (FEC) and tax returns are essential to ensure compliance. In addition, having clear policies and procedures for managing disputes and internal conflicts helps to reduce legal risks and promote a culture of compliance within the company.

Conclusion

In summary, securing your business legally and fiscally requires a multi-level strategy. It is essential to improve the governance of your business through the establishment of solid internal procedures and the continuous training of your teams in regulatory standards. It is equally important to take a proactive approach to tax management, including conducting internal tax audits and using competent tax advisors.

Creating a credible and effective compliance program, which includes risk management and regular monitoring, is essential to avoid breaches and litigation.

In addition, guaranteeing legal protection and receiving support in the event of litigation, through legal protection insurance and the use of alternative means of conflict resolution, is essential to defend your interests. Do not wait to implement these measures in order to strengthen the legal and fiscal security of your company, thus guaranteeing its sustainability and future success.

‍

Image credit: https://fr.freepik.com/photos-gratuite/homme-affaires-travaillant-dans-bureau_4702606.htm#fromView=search&page=1&position=46&uuid=b99a6436-5571-4267-a620-843e41ce04ba&query=audit+fiscal