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Next Read: Defining Business Operations and Why They Matter to You
There are many legal requirements that small businesses must comply with to operate within state and federal regulations. Both internal and external compliance requirements are important to maintaining a legal operation, as well as a successful business. From tax obligations to employment rights, it’s important for you to know the small business laws that apply to your organization.
When you start a business, you will have to file necessary documents with your state government and register with the federal government. This ensures you are complying with state tax departments, the IRS, and other government agencies.
Every state has filing requirements that small businesses must meet. However, the specific actions you must take will vary depending on your location. Some of the common filing requirements you should be aware of include:
The federal government also has filing requirements for small businesses. If you fail to meet any of these mandatory filings, you may face significant penalties or other fees. Federal filing requirements include:
There are an array of state and federal laws and regulations that must be complied with to maintain a legal business operation in the United States. Failure to do so can jeopardize your entire company.
The Occupational Safety and Health Administration (OSHA) requires that all businesses with more than 10 employees keep a record of serious work-related injuries and illnesses. Injuries that are not minor must be reported in a timely manner.
Businesses that operate in certain industries have specific health and safety laws that they must comply with, as well. Those include providing appropriate personal protective equipment (PPE) to employees, maintaining a safe and/or ergonomic working environment, and ensuring employees have enough training to safely operate equipment. If you have a small business in a high-risk industry, such as construction or healthcare, you should be aware of those laws that are specific to your organization.
Employees have rights in the workplace, and the federal government requires employers to publicly post certain information about those rights. Some workplace posters that may be required include:
Some of these posters are required only in certain industries or at specific locations for small business operations.
The Americans with Disabilities Act (ADA) prohibits discrimination against people with disabilities. Title I of the ADA applies to small businesses with 15 or more employees, and Title III covers businesses and nonprofits that provide goods and services directly to the public.
The most prominent requirement of the ADA is that businesses must make “reasonable accommodations” to assist people with disabilities. Compliance with this law may include:
Failure to make reasonable accommodations when financially feasible can result in fines from the state and federal governments. In fact, individual employees can also sue a small business for discrimination and recover for discrimination they have faced.
Anti-discrimination laws must be complied with diligently. If employees, potential hires, or customers feel discrimination is present, your business could face fines, lawsuits, or significant backlash from the public.
Federal laws prohibit discrimination based on certain classes or characteristics, including:
Many states have expanded these classes to include pregnancy (listed under sex and/or disability), gender, gender identity, sexual orientation, military status, and more.
State and federal governments have regulations regarding the way businesses market and advertise their goods and services. Truth-in-advertising standards are upheld by the Federal Trade Commission (FTC), which prohibits deception by businesses. Some requirements for marketing and advertising include:
States also have additional consumer protection laws that ensure businesses do not present false statements to the public. Even industry-specific ethics agencies have requirements for advertising of goods and services. For example, the American Bar Association prohibits the use of “expert” or “specialist” in legal marketing, unless a lawyer has taken topic-specific tests and become certified in a subject area.
The U.S. Copyright Office and U.S. Patent and Trademark Office require businesses to register artistic works like writings, songs, and images, as well as logos and slogans. Failure to state ownership of creative content can result in loss of unique use by a business.
There are many documents that must be filed to get a copyright or trademark established. However, it is worthwhile to comply with these laws so that you can maintain your exclusivity over your subject matter.
Many states, cities, and counties require businesses to obtain licenses, permits, and certifications to operate. Depending on the goods or services you will be providing, this process may be complicated.
For example, most restaurants must routinely renew health and safety certificates. This often requires inspections by a local health department, as well as training for all employees who handle food. Failure to meet these requirements can result in your food business being shut down.
Establishments that sell tobacco, alcohol, and CBD or marijuana products are highly regulated. Oftentimes, they must be located a certain distance away from schools and daycares. They must obtain initial licenses and renew those at least annually.
Professional services like nursing, electrical, and plumbing require certification from third-party boards to keep licenses. Individual employees must also comply with educational and training requirements.
When you open a small business in a specific industry, you should be aware of the state and local agencies and boards that you will have to deal with.
There are state and federal labor laws that small businesses must comply with, as well. The Fair Labor Standards Act (FLSA) outlines how businesses must treat employees, including setting a federal minimum wage. However, many states have set a higher minimum wage that must be paid.
Labor laws and regulations made by the Occupational Safety and Health Administration (OSHA) ensure employees have a safe working environment that is free from danger and hazards. Workplaces in certain industries are regularly inspected by OSHA representatives to determine compliance.
Other employment regulations include requirements regarding employee benefits, employment of non-citizens, equal opportunity practices, union interactions, and more.
Once you have a good understanding of the local, state, and federal laws you must comply with as a small business, you should consider starting your organization or expanding with a small business loan from Lendio. We can help you meet your ongoing financial and legal needs.
Apply for a small business loan with Lendio.
Brandy Abalos is a licensed attorney, content strategist, and marketing consultant for small businesses. She uses SEO tools to develop strong digital content for audiences who are learning how to navigate complex topics in law and business. When she is not writing, she seeks adventures with her three children, partner, and two corgis in Ohio.
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