Small and Medium-sized Enterprises (SMEs) account for 99.8% of businesses in Cameroon and play a vital role in the economy. However, many struggle with regulatory compliance, often due to limited resources, awareness, or structured processes. These regulatory missteps can result in fines, loss of business opportunities, or legal complications. Below is a summary of the top 7 compliance mistakes SMEs commonly make and practical recommendations to address them.
1. Failure to Properly Register the Business
Many SMEs either operate informally or do not complete proper registration. This limits their ability to access legal protection, bank loans, investment opportunities, and structured growth.
To solve this, business owners should formally register with the appropriate agencies such as the CFCE, obtain incorporation documents, and ensure all required business licenses are in place. Registration enhances credibility and unlocks opportunities for growth and compliance.
2. Ignoring Tax Obligations
SMEs often overlook key tax responsibilities, such as registration with tax authorities, timely filing of tax returns, or accurate reporting of income. This leads to penalties and operational risk.
To succeed, businesses must register with the Direction Générale des Impôts, understand their tax obligations (VAT, corporate tax, RSI, etc.), and establish sound accounting systems. Implementing digital or manual tracking of income and expenses can help ensure accurate and timely tax declarations.
3. Non-Compliance with Labour Laws
Failure to adhere to labour laws—such as employment contracts, wage regulations, and work conditions—can result in employee disputes, labour sanctions, and reputational damage.
SMEs should familiarize themselves with Cameroonian labour regulations and draft compliant employment contracts. Legal or HR consulting support may be needed to ensure workplace practices are aligned with national standards.
4. Lack of Awareness of Industry-Specific Regulations
SMEs often operate without knowing the specific regulations governing their industry, which can impede compliance and growth.
Businesses should research and understand sector-specific regulations and seek expert guidance where necessary. Compliance enhances transparency, reduces risk, and improves investor or customer confidence.
5. Absence of Regular Audits
Without routine audits, SMEs risk undetected financial errors, poor reporting, fraud, and loss of stakeholder trust. This can also make it harder to secure financing or meet regulatory changes.
As a solution, regular internal audits should be conducted to spot compliance gaps early. Hiring external auditors adds objectivity and credibility. These practices strengthen internal controls and support long-term sustainability.
6. Overlooking Local Regulations
Non-compliance with local regulations such as zoning laws, building codes, environmental rules, or health and safety standards—can lead to penalties or forced shutdowns.
Businesses should proactively engage with local authorities to understand site-specific requirements. Adhering to these rules safeguards the business and fosters community trust.
7. Inadequate Record-Keeping
Poor or disorganized documentation hampers compliance during audits and makes it difficult to defend against regulatory or legal issues.
Businesses are encouraged to establish clear record-keeping protocols with both digital and physical backups. Automating document management using accounting or compliance software improves efficiency and ensures records are audit-ready.
Conclusion
By addressing these seven critical mistakes and embedding proper compliance strategies such as formal registration, tax planning, labour law adherence, and regular auditing, businesses can significantly reduce risk and position themselves for growth, sustainability, and access to capital.
At the center of these solutions is Benford & Associates Ltd, a trusted leader in regulatory compliance, tax management, and legal advisory. With unmatched expertise, a deep understanding of Cameroonian business law, and a results-driven approach, Benford & Associates Ltd is the partner of choice for businesses that want to grow right, stay compliant, and thrive sustainably.
Benford & Associates Ltd: Regulatory Precision. Financial Clarity. Unmatched Expertise.
