Small Business Laws Explored: What You Need to Know. Being a small business can be challenging. It takes a lot of time and effort to start a small business, let alone grow into one. But not having to deal with regulations can be very liberating, especially when you’re just starting with your own company. A small business is any independent entity that constitutes at least 10% of gross revenue but has fewer than 500 employees. Running a small business can be rewarding, but it also comes with its challenges. These include operating within a limited budget, finding skilled professionals to work for you, managing employee workloads, and protecting yourself from litigation.
Understand the Basics of Law
Like many other aspects of life, the fundamentals of law are taught in institutions like universities. Still, they can be too abstract and theoretical for most people to understand. And there are always questions and misunderstandings that arise. For example, different laws apply to a country’s residents and non-residents and different types of companies. To understand the basics of how laws affect your small business, you need to understand the difference between a few key terms.
- Corporation – A legal entity that can own property and is separate from its owners. A corporation can be either a C Corporation or an S Corporation, depending on the type of business entity you choose.
- Legal Entity – A legal entity that is created by law. This includes corporations, LLCs, and other business entities. In addition to owning property and being separate from the people who own it, a legal entity can also be formed as a corporation, a limited liability company (LLC), a partnership, or a trust.
- Partnership – A business entity formed between two or more owners. Each owner is an investor and a member responsible for the business’s profits and losses.
- LLC – A legal entity separate from its owners but provides limited liability to its members. LLCs can be either regular or tax, depending on the state in which they are formed.
- Business Entity – A corporation, LLC, partnership, or other legal entity that is formed to conduct business.
Register Your Business Entity
A registered business entity is an entity that has been registered or filed with the appropriate state agency. This can provide a number of advantages over unregistered entities. Most importantly, it makes public that you are operating as a business. It can also help protect your business if it is ever sued. If the plaintiff knows that they are suing a registered entity, they must provide a much higher evidentiary threshold than if they file a lawsuit against an unregistered entity.
For most businesses, a registered entity is automatically formed the moment you file a state incorporation paperwork. This is true even if you are starting your business from scratch. If your business doesn’t have state incorporation paperwork or you are starting a new company from scratch, registering your business entity is essential.
Stay up-to-date on all government requirements and disclosures
You must register with the state government as an entity in each state. This is done through the Secretary of State’s office. Once your entity is registered, you must also file a Federal Tax Information Form. This helps the government know who you are and what you do so that you avoid falling through the cracks. Beyond filing the requisite paperwork, you must also stay current on all applicable state and federal regulations.
Depending on your industry, this can include laws like worker safety standards and financial reporting requirements. Beyond these regulations, you must also ensure that you follow all applicable state and federal regulations. This includes ensuring that you are not violating state or federal laws that could jeopardize the health and safety of your employees or the public.
OSHA – Protect your Employees
Another way that laws can protect you as a small business is by protecting your employees. Employers are legally responsible for the safety of their employees under the Occupational Safety and Health Administration (OSHA). OSHA, as well as other similar state agencies, enforce safety standards.
These standards must be followed under penalty of law. OSHA is responsible for regulating the safety standards in nearly all industries. Each state has its own set of OSHA standards, and non-compliance with any of them violates federal law. OSHA standards cover a range of topics. These topics include workplace hazards, employee training and education, and access to health and safety records.
Don’t Be Afraid of Negotiating with Employees or Contractors
If your small business is operating on a limited budget, you may need more funds to pay invoices or make other contractual payments. This is where negotiating comes in. It’s perfectly legal to negotiate payment terms with your vendors and employees. But keep in mind that your company’s financial situation limits the amount you are able to negotiate, so you may be limited to negotiating lower payments or extensions on payments that are due. At the same time, you may be able to negotiate payment terms that are better than what you would be able to get otherwise. This can often be accomplished by working with your vendors and employees to reduce the number of their expectations.
Protecting Your Intellectual Property
As a small business owner, you are responsible for protecting your intellectual property and should be aware of the laws that apply to this type of protection. Intellectual property is any work, patent, or invention that gives you an economic benefit. This includes your company name, logo, brand, designs, inventions, and trademarks. When it comes to intellectual property protection, you should be aware of two main types of laws. These are copyright laws and patent laws. Copyright laws apply to creating artistic, written, and other forms of expression. Trademark laws apply to using words or symbols that identify a company’s goods or services.
Running your own small business can be rewarding, but it also comes with its challenges. These include operating within a limited budget, finding skilled professionals to work for you, managing employee workloads, and protecting yourself from litigation. These are only a few things you need to know about running a small business.