Laws That Every Small Business Owner Should Know
Fri, 11/09/2012 - 4:26pm | by Guest Contributor
Most small business owners start a company thinking about how great it is to live in a country where a person with a professional dream can turn it into a reality through hard work and perseverance, and eventually realize a level of financial success that allows them to remain stable and independent. Unfortunately, the legalities surrounding business ownership can make it difficult for small business owners to accomplish what they’re working so hard for. Laws enacted to protect employees and the public can drain a small company dry and often, small businesses are subject to all the same laws that are aimed at governing large corporations, in some cases unfairly. So here are just a few avenues of legislation that you may want to explore when you open your doors.
1. Labor laws. Before you ever greet a customer you’ll have to hire employees, so it behooves you to be aware of the many laws (at both the federal and state level) that pertain to labor. There is legislation in place to protect employees from being overworked and mistreated in the workplace, as well as regulations dictating how certain legal situations must be handled (accident and injury, harassment in the workplace, medical leave, and firing, just to name a few). You need to be aware of any that could lead to lawsuits so that you can implement policies to avoid such situations.
2. Privacy laws. If you’re going to be saving customer information electronically (and most businesses do), you need to consider the potential for identity theft and act accordingly. This means offering a secure network for customers to transfer this information (online), but it also includes on-site security of your database. If you run a storefront, for example, you need a computer system that hides all but the last four digits of a credit card once it has entered the system (so that employees can’t go back and copy down the information later, for example). And you also need a firewall that keeps out hackers and spyware that could access and copy sensitive customer information. You’ll have to check the specific laws for your business and your locale to make sure you’re in compliance.
3. Advertising laws. Your customers have the right to products and services that are safe and professional, but they also have a right to get what they paid for. This means you cannot mislead consumers with your product labels or advertising and you definitely can’t lie about what they’re getting. There are laws pertaining to all types of advertising (including online) and you need to know them so that you don’t inadvertently break them.
4. Finance laws. Even if your company isn’t publicly traded, there are still finance laws you have to adhere to concerning reporting, taxation, bankruptcy filings, and so on. Your accountant can likely fill you in on the laws that pertain to your particular business, but you may want to check them out on your own to get to the fine print.
5. Intellectual property. Anything you create is your intellectual property (as long as you didn’t take it from somewhere else improperly, as with plagiarism). But you have to do your part to protect it if you want it to be yours in the eyes of the law. This could mean obtaining a patent, copyright, or trademark, which you will need if you ever have to go to court to prove ownership of your intellectual property.