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No matter what type of business you run, to operate legally, you must comply with federal, state, and local statues and regulations administered by legislative bodies and carried out by regulatory agencies. Some regulations impact the ways in which businesses report income and pay taxes; others regulate how they dispose of their excess materials or waste. For just about any kind of industry and transaction within it, there’s a government regulation on business to go alongside it.
The sheer volume of government regulations on business can make your head spin, whether or not you’re just starting out or are a seasoned small business professional. And even finding the locations of these regulations can seem overwhelming. But despite the high volume of government regulations on business, understanding the general rules of the road isn’t actually as scary as it sounds.
The secret to understanding government regulations on business is knowing where to look, and what kind of laws you’re looking for. There are several places for entrepreneurs to go depending on what kind of regulatory information they need. Here’s a breakdown of the common kinds of government relations on business, as well as where you can go to find help understanding them.
Federal business laws and government regulations fall into seven basic categories. Note that each might not impact your business the same way—entire categories might not be a huge concern for your business, depending on your industry. But you’ll want to make sure your company is in compliance with all of them with the same level of importance and attention. Your business lawyer can help you out to figure out what, exactly, applies to you.
Here’s a rundown of the business regulation categories to look out for:
For most small business owners, government regulation questions almost always begin with taxes. But there’s more to taxes than merely paying them—knowing which business taxes to pay, when to pay them, and how to set up your business to account for future tax payments can spare you a ton of headaches when it comes time to write the government a check.
Every company registered within the United States has to pay federal taxes. Most companies will also have to pay state taxes, depending on the state in which the company is registered. These are unavoidable. Avoiding taxes—or deciding not to pay them outright—comes with hefty penalties and potential jail time.
But the kinds of taxes you’ll pay depends on how you formed your business. In this regard, not all businesses are treated the same. Sole proprietorships pay taxes differently than, say, S-corporations. Here’s a full rundown of the different taxes for business structures to help you determine what your business needs to file. Despite the differences between each kind of business, there are a few general terms you should know:
There are also many government regulations on businesses that employ workers and independent contractors, in the form of federal and state labor laws. Thankfully, if you’re just starting out, you can take advantage of the Department of Labor’s FirstStep Employment Law Advisor. This resource helps employers determine which major federal employment laws apply to their business or organization, the record keeping and reporting requirements required, and which on-site posters they need to hang in their office or work site.
Here are the most common labor laws:
Any time a company conspires with its competitors, third-party vendors, or other relevant parties, it may run afoul of antitrust laws. You can easily familiarize yourself with the SBA’s handy list of issues that antitrust laws strive to address, such as the following:
A good advertising strategy can do wonders for your business. But before you dive in, you’ll need to make sure that you’re playing by the rules and government regulations. For example, you have to make sure the claims in your ads are not untruthful or purposely deceptive. Violating these rules can result in fines, which defeats the purpose of your advertising in the first place.
Here’s how you can avoid misleading customers:
You might need to acquaint yourself with various environmental protection laws, depending on your industry or business. This is especially pertinent if you’re marketing, say, cleaning products, food, or anything with claims to be natural, organic, or eco-friendly. You’ll find dozens of environmental rules and regulations that might affect your small business, both at the federal and state level.
Here’s a sample of compliance measures you may need to take for your business. Note that you may also need to consult your state environmental protection agency to make sure you meet their requirements as well.The EPA Small Business Gateway is a great resource to make sure your business is in compliance with environmental law.
Businesses with staff and employees wind up amassing a ton of sensitive personal information about their employees. As a result, there are a variety of rules and regulations about how employers must save and secure this data.
If your business discloses an employee’s private information, including Social Security number, address, name, health conditions, credit card, bank numbers, or personal history, not only do various laws exist to keep businesses from spreading this information, but employees can sue for disclosing sensitive information.
Although employees have clear and specific rights to privacy in the workplace, the rights are balanced against the employers’ privileges to monitor their business operations. It’s important to understand what rights you have as a business to monitor employees, and to be clear and transparent about that monitoring to your employees.
We’ve focused on federal laws and government regulations on business so far, but that doesn’t meant that there aren’t ample state regulations to consider for your small business. Many state and local governments have their own requirements for businesses, and they’re just as important to understand as their federal counterparts. Here’s a breakdown of the most common state licenses and laws, but check out our State-by-State Guide to Business Licenses and Permits to see what else your state might require.
There’s a lot for small business owners to digest as far as government regulations are concerned. The good news is that you’re not alone in making sure that your business is compliant and on the right side of the law. The best thing you can do is check in with your local SBA office, and as the need arises, set up legal representation for your business in the event that you need additional counseling.