Do you know that about 40% of the business regulations in India could actually land an entrepreneur in jail if not followed correctly?
According to reports, out of the 69,233 business compliances that regulate doing business in India, over 26,000 include jail time as a possible penalty for slipping up.
In India’s top industrial states—Gujarat, Punjab, Maharashtra, Karnataka, and Tamil Nadu—there are over a thousand laws each that could put you behind bars for non-compliance.
Imagine being a medium-sized manufacturing business with over 150 workers. Just staying on top of these rules could set you back by 18 lakhs a year!
And, this is exactly why businesses are on the lookout for in-house counsels like You!
They need someone to help them navigate these tricky waters and save big bucks, simply by ensuring they stick to the rules.
And guess what?
In 2023 alone, there were over 12,000 in-house lawyers, and they earned about 67% more than the average lawyer—that’s an average annual salary of over 25.5 lakhs!
The best part?
The competition is still low. Many lawyers haven’t yet tapped into this opportunity, leaving a big gap just waiting to be filled by someone ready to step up.
So, how can you make that perfect compliance tracker and help companies save those hefty penalties or prison times?
Here’s a step-by-step guide on how to prepare a compliance tracker:
- The first step is to Compile a comprehensive list of industry-specific laws and regulations.
- If you do not know how to start, let me tell you one hack. All listed companies have to specify the applicable laws and regulation in the prospectus at the time of listing. So you can simply download and study the prospectus of a company that is similar in size and industry. This will help you identify the applicable laws.
You can find the prospectus by checking the bse or nse website. Below is the screenshot of where on the BSE website you can find the prospectus for any company.
Once you have downloaded the prospectus, you can find a Section on the “Legal and other information” as shown below in Section VI. You will find information about all regulatory approvals, licences and compliances required for the company.
- Based on the applicable laws identified you can further Identify which licences and registrations are required to start the business.
For example, here is a sample list of licences and permits required for a manufacturing company under 25 applicable laws.
Here is a list of some common compliance related laws applicable to most companies. Further, Part 2 of the list contains some examples of sector specific laws.
You can use these lists as reference
Depending on the sector and scale of operations, other laws may be applicable too.
- Once you have identified the laws, the next step is to determine what will be the columns in your compliance tracker. The following could be the titles :
- Legislation: The name of the Act or the Regulation under which the compliance is needed
- Title: A Short description of the the compliance required to be undertaken
- Task: Detailed information on the action item to be mentioned
- Reference: Section / Rule number
- Frequency: The periodicity of the compliance Daily/Yearly/ Weekly/ Monthly/Quarterly should be mentioned so that reminders can be set accordingly
- Penalty: The penalty for non-compliance as provided in the law needs to be mentioned so that teams are aware of the consequences of non-compliance
- Forum: The name of the authority under the law who needs to be intimated about the compliance
- Department Responsible: In a company different departments are responsible for undertaking the compliances based on the kind of compliance. Example – Maternity benefit compliance will be taken care of by HR but GST related compliance by the Finance department.
- Status: The status of the compliance whether pending or submitted or completed needs to be mentioned
- Notes / Comments: Any special instructions or information can be mentioned in this field.
- This is how the compliance tracker will look at this point of time.
| SR No. | Legislation | Title | Task | Reference | Frequency | Penalty for Non-compliance | Form | Department Responsible | Priority | Deadline | Status | Notes/Comments |
- Some of this can be very intensive work, so you can take AI’s help here. For example, I simply replicated the entire text of the Maternity Benefit Act into ChatGPT and instructed it to create a compliance calendar with respect to the statute (see prompts here).
- You can see in the below screenshot that we have replicated the entire text of the Act into AI and instructed that we need to create a tabular compliance tracker for actions required to be undertaken by the Company. As you can see the response has provided a table with only 4 columns.
- Below you can see that we have instructed AI to create columns as per our requirement like Title, Task, Reference Section, Frequency, Penalty for non-compliance, Form, Department Responsible, priority, deadline, status, notes and this is the result achieved. You can see all the columns in the link provided above.
- Further, the Maternity Benefit Act has also had some amendments, so we need to make sure that the tracker takes that into consideration, so we have again replicated the text of the Amendment and instructure AI to make alterations accordingly.
The output received is as follows:
- You can see that the creche facility which was not a part of the original Act, but included as an amendment has been included in the tracker, based on the prompt above
- Here is the final tracker with some human edits. You can do this for every other statute!
- Ensure that you review the output produced by AI – there can be many mistakes! You must verify the tracker created with the bare act again and compare the section numbers, applicability and specially the periodicity of compliance. You may also customise this and add responsible departments in another column. This sample can be used for all kinds of companies, all you have to do is add the relevant applicable legislations + regulations/notifications and circulars and instruct AI to identify actionable tasks in the Act.
- The compliance tracker needs to be created and filled for each applicable enactment by extracting actionable items that the company needs to undertake along with deadlines and consequences of non-compliance.
- Establish a regular monitoring schedule (e.g. weekly) for the tracker to proactively identify and address issues by periodically reviewing it, ensuring timely fulfilment of responsibilities by relevant departments. This includes updating the tracker for new regulations and laws.
- As the business size increases (beyond 100 employees/ or presence in multiple locations/or 50+ contracts per month being executed), you can also explore automated tools like Legatrix for a more sophisticated approach. This will enable you to automate reminders and notifications for upcoming deadlines, facilitating ease of use.
This checklist is your roadmap to staying on top of the legal and regulatory aspects of running a corporate legal department. Regular updates and proactive management of each area will help keep the company compliant and reduce legal risks.
Remember, being proactive rather than reactive in legal compliance saves a lot of time and resources in the long run!
Also note – while specialisation is not necessary for in-house counsels, and in fact some amount of generalist skills are must for these roles, eventually you can choose to work and specialise in specific sectors such as media, telecom, banking, e-commerce, and healthcare too if that interests you.