6 Legal Basics every business owner should know
Laws for businesses are complicated and less intuitive than the laws we deal with every day (like don’t speed, don’t steal). That’s why it’s important to get legal advice for your small business from someone who is qualified: a business lawyer. However, there are certain areas of law that you can familiarize yourself with to help ensure that your business is primed for growth. While this list is not all-inclusive, here are some important areas of law every business owner needs to know.
- Business Incorporation/Registration/License and other necessary legal documents
To operate a business, you’ll need to ensure that it is properly incorporated, and either registered or licensed with the appropriate governmental entity The Secretary of State office for the state where you live often has forms available for your business to be incorporated, but you probably want to speak to a local attorney to make sure you aren’t missing any steps. Following incorporation, You can then contact your local city government, which sometimes allows you to apply online. (Hint: File your license in the area you plan to establish your primary location!)
- The Family and Medical Leave Act (FMLA)
Ideally, your business will grow and eventually be in a position to hire employees. We advise every employer to familiarize themselves with the rules and regulations involved with employing people on a federal, state and local level. The FMLA is a federal law that you will inevitably encounter when dealing with the rights afforded to your employees..
- Workers’ Compensation
Most states require employers to obtain a worker’s compensation insurance policy that will provide financial support to employees if they suffer harm that occurred at the workplace. Generally, each state governs the rules and regulations for their respective systems. Failing to secure such a policy could subject you to fines or even jail time.
- False Advertising
Under the law, claims in advertisements must be truthful, cannot be deceptive or unfair, and must be evidence-based. For some specialized products or services, additional rules may apply. The Federal Trade Commission gives steep penalties for breaking this federal law.
- CAN-SPAM Act
This is a law that sets the rules for commercial email, establishes requirements for commercial messages, gives recipients the right to have you stop emailing them, and spells out tough penalties for violations. If you plan on doing email marketing on any level, we recommend that you start by understanding what is required of you first.
- State and Federal Taxes
Every business owner needs to familiarize themselves with applicable state and federal tax laws. The business structure selected when creating the business will have a big impact on the taxes a business will owe. We recommend visiting the IRS website for an overview of the types of taxes that may apply to your business.