US Government regulations for business seek to protect the interests of different sections such as the general public (emvironmental laws), consumers (consumer protection laws), employees (health and safety laws), shareholders (disclosure requirements) and the business itself (contract laws).
This page comes under the section Small Business in USA.
Don't try to save the bother of complying with the law. You could be in for far more bother when your evasion is discovered. You could also lose remunerative business opportunities like government contracts if you fail to comply with regulations.
Complying with all applicable laws could indeed be a bother. You have to find out which laws apply to your business, and then complete the formalities involved. US government has tried to make compliance easier by making information and relevant forms available online and by regulating that laws must be explained in plain language to those affected by it.
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In the following sections we look at the important areas of business law that are most commonly applicable, and we also look at the sources for compliance help.
US government has enacted regulations that affect businesses in the following areas, among others:
We discuss licenses in another article, Small Business Licenses. In this article, we look at the other business regulations briefly. The aim is to provide a perspective and not to discuss the issues in any depth.
US government has created a website http://business.gov/ as a one-stop resource for all laws affecting businesses. You could get information about the licenses you need and the regulations that affect your business at this site. In the discussion below, each section contains a link to relevant online information source.
You can run your business as a sole proprietorship, partnership or corporation. There are different types of partnership and corporations. Your business structure determines your liability for the debts incurred by the business. Sole proprietors and in most cases, partners of a partnership, can become personally liable for the debts, if the business assets prove insufficient to meet these. In the case of corporations, you are liable only to the extent of any unpaid amounts on the shares you have agreed to take up.
Taxation of business profits is also different for corporations, partnerships and sole proprietorships.
You pay income taxes on your net income, i.e., gross income minus business expenses incurred to earn that income. You are also allowed to deduct claims like depreciation on owned premises, plant & machinery and other long-term assets. Income tax is levied by the Federal government's IRS department. Some states also levy income tax. You are liable to deduct income taxes from the salaries you pay your employees, and hand it over to the government.
You pay sales taxes on your turnover. Sales taxes are levied by state governments. You can collect this tax from your customer and pay it to government.
You pay certain taxes, like building tax and profession tax to your local city or county council.
Employment laws specify such things as minimum wages, number of hours an employee can be asked to work, employee entitlements for annual vacation and other types of leave and rules regarding hiring and firing of employees.
Employment laws also specify that you can recruit as employees only those persons authorized to work in the USA and that the there should be no discrimination on the basis of race, color, religion, sex, national origin, age or disability.
Occupational Safety and Health Act requires that workplaces must be inspected to identify hazards, employees must be informed of the dangers they are exposed to, safeguards must be put in place to eliminate the dangers and employees must be trained in safe working practices. Where hazards cannot be eliminated, systems that help prevent and minimize the dangers must be in place.
Accidents and illnesses must be documented and reported.
Consumer protection and free competition are the objectives of fair trading laws.
The Fair Trading Commission - FTC - has issued a number of policy statements on advertisements. Deceptive advertising, misleading use of the word Free, bait advertising, comparative advertising and deceptive pricing are some of the issues covered by these statements. The Fair Packaging & Labeling Act seeks to extend fairness to the contents and labeling of products.
Antitrust laws target practices like sellers ganging together to fix prices, using one's dominant position to exploit consumers, businesses acting in concert to boycott other businesses and practices aimed at reducing competition and entry of competitors.
Environmental protection covers a wide range of safeguards and actions. Various laws aim to ensure clean water and air, reduce and clean up pollution, protect endangered species, control use of pesticides and so on. The US government's Environmental Protection Agency - EPA - has a section for small business to help small businesspersons find out the regulations applicable to them.
Intellectual property laws such as those concerned with patents, copyrights, trademarks, etc seek to protect the value created by inventors and other original creators from indiscriminate exploitation by others.
The aim of privacy laws is to prevent careless or deliberate mishandling of private information about individuals that come into the possession of business organizations in the course of business.
There are other regulations that can affect your business. You can refer to the Business.gov website and also consult a business attorney to ensure that you comply with all laws.
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This book is for anyone who needs easy-to-understand legal advice for owning or running a business. The guide gives small business owners and managers a legal overview of topics such as partnerships, sole proprietorships, corporations, hiring and firing of employees, leasing commercial space, and implementing e-commerce. It helps them to understand the legal implication of each topic and to know what questions to ask their regular attorney. Topics also include franchises, trademarks, patents, collections, taxes and bankruptcy, as well as dealing with lawsuits, selling your business, and including your business in your estate.
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