The impact of financial penalties on a startup can be severe. Here are some potential consequences:
Cash Flow Issues: Startups often operate with limited cash reserves. Financial penalties can deplete these reserves, leading to cash flow problems. Reputation Damage: Penalties can tarnish a company's reputation, making it difficult to attract investors, partners, and customers. Operational Disruptions: Financial penalties can divert resources and attention away from core business activities, hindering growth and innovation. Legal Consequences: Failure to pay penalties can result in further legal actions, including lawsuits and additional fines.