"Every entrepreneur learns that managing through the regulatory hurdles is critical to success. In this book, Wes Truitt provides the "how to" and "how not to" guidelines and perspectives pertaining to government regulations. A must reference for entrepreneurs!" - Bruce G. Willison, Dean UCLA Anderson School of Management.

Small Business and Government Regulations

Complying With Government Business Regulations Helps You Focus on Your Small Business

For the small businessperson, government regulations might appear extremely distracting and even silly. However, it is these regulations that enable small businesses to survive and prosper. It is government regulations that help you enforce your rights. The regulations also tell you how to ensure a safe workplace. Even taxes can be seen as good because without them, the government would not be able to provide the infrastructure needed for the success of your business.

Probably more important is the fact that once you have arranged to take care of applicable regulations, you can focus on running your business. Otherwise, you could be constantly distracted from the business because of troubles with government inspectors and regulators.

Complying with government regulations will be easier if you have an idea of the kind of regulations that are applicable to your business. We now take a broad look at the types of business regulations.

Levels of Government Regulations

Business regulations can be under laws made by federal, state and local governments. You can get a good idea of local government regulations applicable to you by meeting the concerned person at your local council. Other sources of information are other businesspersons, industry associations and small business support agencies like SBA. Once you have decided upon what business you plan to take up, it is a good idea to tap these sources and find about the laws applicable to the business.

Right at the Start of Your Business

Local zoning regulations will determine the locations where you can set up your business. Then there is the issue of registering your business name. Unless you are an individual doing business in your own name, you will need to register your business name. Next comes the matter of obtaining licenses and permits that apply to your kind of industry.

Another major issue that comes up at the beginning concerns the form of business. You can do business in the following forms:

Sole Trader: You will be the full owner of the business, and can take all the business decisions. You will be liable for all the debts incurred by the business. Your creditors can even attach your personal property if your business assets prove insufficient to meet the liabilities.
Partnership: You carry on the business in partnership with one or more other persons. All the partners will be part owners of the business, with rights and liabilities as determined by the partnership agreement executed by all. All the partners will be liable for the entire debts of the business.
Limited Company: A limited company is a separate entity in which shareholders take up shares. Shareholders will not be personally liable for the debts of the company. Creditors can proceed only against the company to recover their claims.

the above is only a broad overview. There are specialized forms of set ups under partnership and company forms of business organizations.

When the Business Gets Going

As soon as the business gets going, you would have a host of regulations to comply with.

Taxes: Governments need money to run the business of governing, and they get it by collecting taxes. You have to pay taxes on your sales (or purchases) and on your income. You might also have to pay a tax to the local council for just running the business in their territory.
Employment Laws: If you employ people, you would have to ensure that they work only so many hours per week or continuously in one session. The employees would also have to be compensated at a minimum rate. They would be entitled to weekly offs, and annual leave.
Health & Safety: Your workplaces should have safety features, depending on the nature of work carried out and the equipment used. You should make arrangements to ensure that your business does not pollute the environment.
Privacy Laws: Increasing attention is being paid by governments to protecting the privacy of individuals. As a businessperson, you are obliged to keep private information confidential, such as personal health and other data of employees.

Other Laws of Importance to Business

There is the all important law of contract that makes it possible for you to enforce your claims, if say, your debtor fails to pay your dues. The law of patents and copyrights protects your inventions and other intellectual property. You have certain rights against your employees, such as acceptable behavior at workplace, attending to their work while on duty and maintaining confidentiality of the information they obtain in the course of work.