Development of internal regulations and company instructions

The registration actions that accompany the process of setting up a company can be compared to such an important day in the life of an individual citizen as obtaining a passport. The sense of dignity and hope, without exaggeration, adds to the greatness of the moment. But life goes on, and a month or two later, someone really grows up, grows and starts a full life, while others, whether individuals or businesses, for some reason face continuous trials: inspections, fines and misunderstandings.

No wonder - a lot here depends on your respect for order, your ability to anticipate and plan, your ability to organize your activities and life in general. This means that it is necessary to develop internal organizational and legal documents that not only really regulate work and prevent conflicts, but are also required by regulatory authorities - starting with the issuance of a permit or license for certain types of business and ending with inspections by the State Tax Service, the sanitary and epidemiological station, the State Fire Safety Service, the State Industrial Supervision Service or the State Labor Inspectorate.

It has been repeatedly noted that such fundamental features of entrepreneurship as independence, initiative and risk-taking (Article 42 of the Commercial Code) by definition do not lend themselves to strict formalization of business procedures. Ukraine's movement towards the European style of doing business, its fundamental humanization and individualization is evidenced by the gradual exemption of many business sectors from the need to obtain permits, the possibility of performing all registration actions in the "single window" format, simplification of their procedures and search for information in the USREOU in general in electronic form, the active use of electronic digital signatures and electronic reporting, etc.

However, all such innovations require fundamental changes in the behavior of entrepreneurs, such as increased trust and respect for partners and the state, a higher level of legal awareness, readiness and practical skills in accepting technical innovations. Unfortunately, these processes are long-lasting and cannot be determined by a calendar date, such as the entry into force of a law.

In the section on the necessity and desirability of concluding a collective bargaining agreement at an enterprise, we have already paid attention to the main purpose of such a document as a "local legal act", namely, to regulate all internal organizational and legal issues in the work of a particular organization with its help. Such documents include all provisions that must be developed upon request and in compliance with the law and cannot contradict it - in particular, restrict the rights of employees compared to the Labor Code. However, any production, industry or organizational and legal form of business may have, and mostly do have, its own peculiarities that are practically impossible and unnecessary to foresee and fix at the level of law.

At the same time, given that internal regulations are not about excessive regulation of actions, but rather about an expanded and individualized list of rights and opportunities, companies and their owners should be conscious about their development and compliance.

So, if you want to spend most of your working time doing work that will benefit society and bring you and your team profits and good mood, rather than unpleasant contacts with controlling entities, make sure you have a reliable documentary base on the organization of internal activities in advance.

It is almost impossible to imagine the functioning of an enterprise without provisions on trade secrets and confidential information (Article 36 of the Commercial Code of Ukraine, Article 30 of the Law of Ukraine "On Information") and the Instruction on the procedure for accounting, use and destruction of seals and stamps at the enterprise. After all, a clear definition of the boundaries of confidentiality and the persons responsible for storing and using seals not only indicates a decent level of the company as a business entity, but also protects you from possible conflicts in case of contradictory interpretation of these provisions by employees or business partners.     

No less important is the procedure for notifying the Ukrainian Parliament Commissioner for Human Rights regarding the processing of personal data that poses a particular risk to the rights and freedoms of their subjects - the Law of Ukraine "On Amendments to Certain Legislative Acts of Ukraine on Improving the Personal Data Protection System" No. 383-VII dated 23.07.2013 abolished the mandatory registration of legal aid offices with the State Service for Personal Data Protection, which had caused many complaints about its activities. Accordingly, Articles 188-39 of the Code of Administrative Offenses, which establishes sanctions for violation of obligations to violate the procedure for processing personal data, were amended. Thus, the Regulation on the Procedure for Processing and Regime of Personal Data should accompany the activities of a modern enterprise.

As for such a crucial issue as labor protection, it is worth noting that today it receives much less attention than in the old days of command and control. It is mainly concerned with where working conditions require strict compliance with the norms (food production, educational and healthcare institutions, etc.), or where there are special provisions on: Medical examination, the Procedure for performing work with increased risk, and the Procedure for providing employees with overalls, footwear and other personal protective equipment, as provided for in the license conditions (construction work or transportation by transport). For the most part, employers perceive the provisions of the Labor Code and legislation on social protection of employees as purely formal, but are forced to recall them in case of violations. To avoid this, it is worth paying attention to the provisions on: Occupational Health and Safety Service, Occupational Health and Safety Training for the workforce, Procedure for Investigation and Record Keeping of Accidents, Occupational Diseases and Accidents at Work, and the Occupational Health and Safety Commission.   

Regulations on a structural unit are a reliable basis for organizing daily activities, evaluating performance, drafting job descriptions, defining tasks, functions, rights and obligations, and most importantly, employee liability. Job descriptions are developed by the owner or an authorized body (HR department) in accordance with the requirements of the applicable law - based on the Handbook of qualification characteristics of employees' professions and taking into account the specifics of the staffing table.

Experience shows that the presence of provisions on:

• internal labor regulations;
• functional responsibilities and rights of structural units (especially such leading ones as accounting and HR);
• Approval of the list of job descriptions (and familiarization of each employee with it against signature);
• vacations
• business trips;
• bonuses and social benefits package
• etc. can free a company from everyday domestic disputes, which are partly a kind of "black business card" of companies with non-transparent work schemes and, of course, high staff turnover, and sometimes lead to high-profile labor conflicts and lawsuits.

It is almost impossible to overestimate the importance of a decent level of accounting policy at an enterprise - it should be enshrined in a regulatory document. It is clear that it should be based on the Law of Ukraine "On Accounting and Financial Reporting in Ukraine" dated 16.07.1999 No. 996-XIV and the Methodological Recommendations on Accounting Policy of the Enterprise approved by the Order of the Ministry of Finance dated 27.06.2013 No. 635. However, this does not exclude, but also provides for an individual approach to your accounting activities and regulations.

The Ministry of Finance in its letter dated 21.12.2005 No. 31-34000-10-5/27793 stated: "the authority of the company owner to establish the accounting policy is realized by defining in the administrative document the list of valuation, accounting and procedures for which the regulatory framework provides for more than one variant". Probably, every accountant has faced these "situations of ambiguity" in their work, when they have to show miracles of professional skill, given the constant desire of the legislator to amend regulations after the adoption of the new TCU. Thus, it is always better to prevent than to be caught off guard - which, by the way, is a fundamental difference between the methods of domestic and foreign businesses.  

By having provisions on remuneration and distribution of profits in the company, company dividends, etc., you will warn yourself against the scrutiny of tax authorities and possible problems in case of withdrawal of one of the participants from the company. And even the court is ready to take into account a separate provision on accounting at the enterprise - "internal documents of the enterprise, which determine its accounting policy, should be taken into account when determining the method of accounting for income and expenses" (decision of the Higher Administrative Court of Ukraine as of January 15, 2013 in case No. K/9991/40616/11).

Maintaining a reasonable and life-justified balance between unification for compliance with the law and the inherent desire for independence and creative search will help you to adequately guide the development of your business, avoiding possible reefs and potholes. Our specialists will help you develop all the necessary regulations for your company to take into account individual nuances, gain momentum and ensure the constant growth of the most valuable capital of any enterprise - its staff.

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