Do you want to become an entrepreneur in the United States and turn your idea into a reality? In order to launch a business, you have to put in a lot of effort. The first thing that you need to do is create a business plan. However, what many tend to ignore or do not know about is that they should also check about the laws and regulations that can affect your enterprise.
There are various regulations and laws that can have an effect on your business.
Table of Contents
1. Employment Laws
There are several government rules and regulations for an enterprise employing workers or an independent contractor. It protects their right through state and federal labor laws. In case you are new to this, you can take the help of the Department of Labor. This helps in deciding which prime federal employment law is applicable to your enterprise and which is not. It also lets you take a look at federal unemployment clauses.
Here are some of the most common labor laws:
● Wages and Hours
According to the Fair Labor Standards Act, there are standard wages and also overtime pay. This can affect the public, as well as a private employment opportunity.
● Equal Opportunity
Entrepreneurshaving a minimum of 15 employees should comply with the laws of equal opportunity that are enforced by the Equal Employment Opportunity Commission. It states that race, gender, disability, religion, and race shouldn’t influence the hiring practice.
● Non-Us Citizen Workers
As per the regulations of the federal government, employers need to check if the employees have the permission of working legally in the US. There are many employment categories and each of them comes with different conditions and requirements.
There are various other laws that you need to take into account.
2. Tax Code
For a majority of the small business owners, state regulations start with taxes. However, you should know that there is more to taxes than simply paying them. You need to know the company taxes that you will have to pay and how you need to set up the business to ensure that future tax payment can keep you away from loads of headaches.
Here is a complete detail of the different taxes for your business. Take a look at it to determine what taxes you have to file for your enterprise.
● Income Tax
Almost all businesses have to file for their annual income tax return. Businesses should pay income tax since they earn and then file for an income tax towards the end of the year.
● Estimated Tax
This is an alternative to paying income tax. You pay tax throughout the year as and when the enterprise earns money. Partners, sole proprietors, and corporation shareholders should make estimated tax payments in case they expect to owe $1000 or more when you file the return.
● Employment Tax
In case your company has employees; you have to pay taxes that are associated with having staff on the payroll. This is federal taxes, medicare taxes, and social security taxes.
3. Email Marketing
In case your business is associated with email marketing, there are various regulations that you will have to comply with under CAN-SPAM Act.
There are many things that this Act regulates. Let’s take a look at some of the primary components.
- Do not use any deceptive headlines;
- Do not use misleading or false headers;
- Include the name and address of the company;
- Declare that a message is an advertisement;
In case there is an email violation, it is going to lead to a big fine. Hence, you have to make sure that you know the ins and outs of the law.
4. Advertisement
Sure, a good advertising strategy can do great things for your company. However, before you use it, you have to make sure that you are playing by the rules of the government. For instance, you need to ensure that the ads aren’t purposeful or deceptive. Remember, if you advertise wrongly, it can lead to unrest and police violence and misconception. If you are using testimonials in the ad, it will come with extra regulations. If you violate these rules, you might have to pay fines.
5. Permits and Licensing
All the above points pertain to federal laws but that does not mean that there are no state regulations that you need to consider for your company. Several local and state governments come with their own needs for entrepreneurs. You need to understand them as well as federal laws.
In some states, you might have to get a business license to operate. This is particularly important if the business is related to health or childcare. If you don’t have a proper license, the state can find your business or revoke your operation authority.
6. Insurance
When you hire the first employee, you have to buy worker’s compensation insurance. Every state, except for Texas, asks companies with employees to buy workers comp insurance.
This can protect you, as well as your employee when there is an accident on the job. The employee is going to receive health care and it will compensate for the income that they lose when they are injured. The insurance company is going to defray the cost of a lawsuit that has been filed by the worker.
Another kind of insurance is not usually required. However, it depends on the circumstances. For instance, if your business gets a loan guaranteed by the government, you will have to give them proof of a certain kind of business insurance.
There is always a debate on whether these regulations are good for businesses or not. Some people might think it’s too much but it actually protects the consumers. Also, it makes sure that every company is treated equally. Sure, excessive regulation can affect a company negatively. It can keep it from contributing to the economy and creating jobs.
However, it is better to stay updated when it comes to national and federal law. If you are finding it difficult to keep up with the different regulations, you can get in touch with a business lawyer.
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