Are you finally ready to turn your business idea into a reality? As you know, there’s a lot of preparation that goes into launching a business. Creating a business plan and securing funding are common items on the startup to-do list. One thing you should add to that list is time to review common business laws that could affect your business.
To make your research a little easier, we’ve scoured a number of government websites and compiled a list of laws and regulations that affect every business.
1. Business licenses
To legally start a business, you’ll likely need a business license. Start by calling your local city government. See if you need a license, and if you need to know about any zoning rules. For federal and state licensing, check out the Small Business Administration website, and follow the links that are applicable to your business.
2. Fair Labor Standards Act
This act regulates federal minimum wage, overtime rules, child labor bans, and record keeping requirements. You’ll want to read through it to make sure you comply with the current regulations.
3. Federal Equal Employment Opportunity laws
This set of laws prohibits discrimination based on race, color, religion, sex, or national origin. It also includes equal pay for men and women, and protects people with disabilities.
4. Family and Medical Leave Act
If an employee is dealing with a medical condition, or a family member with a medical condition, there are rules an employer must follow. From time off to compensation, you’ll want to read this guide to understand how this act affects your business.
5. Occupational Safety and Health Act
This law guarantees employees a safe work environment, free from recognized health hazards.
6. Workers’ compensation
Most states require employers to buy an insurance policy that compensates employees if they get hurt or become ill from workplace exposure. To learn more about your responsibility as an owner and what an employee is entitled to, check out the Department of Labor website.
7. At-Will work doctrine
In all states except Montana, there is an at-will work law in place. This means employers can fire an employee at any time for any reason, unless it’s an illegal one. Likewise, an employee can leave the job at anytime.
8. Obtain an employer identification number
To file your business taxes, you’ll need an employer identification number. Visit the IRS website to get your number, and you’ll get the number immediately after filling out the necessary forms online.
9. Know the taxes you have to pay
Whether your business has a staff of one or 100, Uncle Sam says you have to pay certain taxes. Take some time to review the federal tax, social security, Medicare, and federal unemployment tax requirements. The IRS has a breakdown of your tax responsibilities as an owner. You’ll also want to talk with an accountant about these obligations and figure out a budget.
In addition to federal taxes, you’ll likely have to pay state taxes as well. Use this website to research your state tax requirements.
10. Hiring employees
When you plan to bring on an employee, it impacts your taxes. The amount of time an employee works for you will make a difference when it comes to taxes, so research the difference between a W-2 employee and a 1099 employee before making any hiring decisions.
Advertising and marketing laws
11. Truth in Advertising and Marketing
Just as it sounds, this law requires all advertising or marketing efforts to be truthful. In addition, if you make any claims during an advertisement, you must have proof to back it up. You can’t ever be misleading or unfair. This rule becomes even more specific when you market to children or use endorsements.
12. CAN-SPAM Act
Did you know there is an email law? It’s true. The CAN-SPAM Act regulates commercial emails. The law requires honesty and bans deceptive subject lines. In addition, you must tell recipients where you’re located and give them an easy way to opt-out of your email messages.
13. Telemarking Sales Law
If you plan to sell products by mail, phone, or online, you’ll need to brush up on the FTC’s telemarketing rule. Under this rule, businesses must ship products within 30 days, provide delivery notices if a product is delayed, and give refunds if an order can’t be filled. You’ll also want to check out the rules surrounding the Do Not Call Registry.
Online business laws
14. Sales Tax Collection
Owners of a brick and mortar storefront charge a sales tax that’s required in that specific area, but what if you have an online business? According to the FTC, if your business has a physical presence in a state, such as a store, office, or warehouse, you must collect applicable state and local sales tax. Of course, some states don’t have any sales tax. You’ll want to read the FTC guidelines and check with your state’s revenue agency to make sure you comply with the law.
15. International sales laws
With a website, any business can sell their products internationally. It instantly opens your business to a new audience, but that exposure comes with regulations. It poses questions about shipping, various taxes, and customs. The FTC has a guide to help you navigate the international waters.
16. Data security
If your business collects sensitive personal information from its customers, you must have a sound security plan in place. Aside from keeping the data under lock and key, you should only collect the information that you need, nothing more. The FTC has a guide to help businesses put a plan in place.
17. Affordable Care Act
In the last few years, healthcare laws have drastically changed. The new Affordable Care Act impacts every business. Prepare your startup by reading about the new healthcare policies.
18. Healthcare privacy
If your small business offers healthcare policies that can be accessed online, you’ll need to come up with a security plan for this data as well. If the information is ever breached, there are rules in place to notify those affected.
19. Protect your intellectual property
If you develop a new product, you’ll want to protect it with a patent. You can also protect your business name, symbols, and logos by applying for a trademark. You can learn more about the process through the United States Patent and Trademark Office.
To protect books, movies, digital work, and musical pieces, you’ll want to copyright your work. The United States Copyright Office can help you file the correct paperwork.
Though we hope you never have to go here, in some cases, new businesses hit financial roadblocks. If your business has cash flow problems and is exploring the possibility of bankruptcy, there are several laws you’ll want to familiarize yourself with before filing the paperwork. The Small Business Association has the resources you’ll need to review.
Researching business laws can be a tedious task, but it’s always best to be informed. While the list above covers a lot of legal ground, additional laws may pertain to your business. To protect yourself, find an experienced attorney and talk about laws that are specific to your business.