The business regulations you’re expected to follow vary by your business industry, state and even by business entity. However, there are some common categories of government regulations of business that most business owners can expect to face. We’ll walk you through the main types of business regulations, and what you should know about them.
Major types of business regulations
Whether you’re just starting a business or are well established, here are several laws and government regulations of business you need to know:
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1. Taxes
Paying taxes isn’t a regulation per se, it’s the law. Filing them on a regular basis is a necessary part of staying compliant as a business. All businesses are expected to pay taxes, but your business tax rate depends on your business structure. Here are some different types of taxes that you may face as a small business owner, though not all may apply to your business.
- Income tax: How your entity is structured will dictate the IRS form that you use to pay income taxes. C corporations pay a flat tax rate, while pass-through entities report business income on personal tax returns.
- Estimated tax: If you expect to owe $1,000 or more, you must pay estimated taxes throughout the year. For corporations, you’ll pay estimated taxes if you owe $500 or more.
- Self-employment tax: This includes Social Security and Medicare tax.
- Employment tax: If you have employees, you must withhold income tax, Social Security and Medicare tax and federal unemployment tax for each employee.
- Excise tax: Depending on your industry, you may have to pay federal excise tax on certain types of goods or activities. Check out IRS Form 720 for more instructions.
- State taxes: Some states may have their own income taxes as well. Make sure to check with your local government for the latest updates on the tax requirements in your area.
2. Employment and labor regulations
Your employees are your business’s biggest resource. Here’s some of the major government regulations for employment that you need to know.
- Minimum wage: The federal minimum wage is $7.25 per hour; however, states may impose their own, higher minimum wages.
- Workplace health and safety: The Occupational Safety and Health Administration (OSHA) sets and enforces standards to ensure safe working conditions for employees.
- Workplace posters: Depending on your industry, the U.S. Department of Labor (DOL) mandates that specific workplace posters must be displayed in the workplace and be easily visible to employees.
- Health insurance: Businesses with 50 or more full-time employees are required to offer health insurance to their employees or pay a penalty.
- Family and Medical Leave Act (FMLA): Eligible workers are entitled to twelve workweeks of leave within a 12-month period for things like the birth and care of a newborn, caring for family or the employee’s severe health conditions.
- Reporting pay: The U.S. Equal Employment Opportunity Commission (EEOC) collects data from employers regarding pay based on demographics.
3. Workplace anti-discrimination and harassment
In addition to the other employment regulations, the EEOC enforces anti-discrimination and anti-harassment laws for the workplace. Among other requirements, anti-discrimination laws mandate equal pay for equal work regardless of gender and prohibit discrimination and harassment based on race, sex, religion and other protected categories. Anti-discrimination laws may require employers to provide reasonable accommodations due to religious beliefs or disability.
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Harassment is a type of workplace discrimination based on one’s race, color, religion, sex or disability. The behavior is unlawful when putting up with it is part of staying employed, or the harassment creates an intimidating, hostile or abusive work environment. In addition to federal laws, states and local governments may have additional anti-discrimination and harassment laws that businesses must follow.
4. Antitrust regulations
Federal antitrust laws prevent unfair business practices that reduce competition. The following practices are banned:
- Conspiring to fix prices: Competing businesses cannot work together to set prices.
- Price discrimination: Businesses cannot charge different prices to different customers for the same product.
- Conspiring to allocate markets or customers: Competing businesses cannot agree to split sales areas or customers in an effort to eliminate competition.
- Conspiring to or forming a monopoly: Businesses are prohibited from creating a monopoly with the goal of reducing competition.
5. Advertising regulations
The Federal Trade Commission (FTC) enforces regulations to uphold truthfulness in advertisements, including:
- Online advertising: To protect customers on the internet, businesses must maintain truth-in-advertising standards.
- Telemarketing: The FTC bans robocalling and fraudulent telemarketing.
- Health claims: Health-related products, like dietary supplements, must be able to prove their claims. The U.S. Food & Drug Administration (FDA) oversees food regulations.
- Environmental or “green” marketing: With the increased popularity of so-called green businesses, the FTC provides guidance to ensure scientific evidence backs up the claims of a “green” product.
- Made in the USA: Businesses need to disclose how much of a product was actually produced in the U.S. in order to display this label.
6. Email marketing
Email is a fact of life and the CAN-SPAM Act regulates marketing in email and gives recipients the right to opt out of communications. All businesses that use email marketing must comply.
7. Privacy
Businesses need to protect the privacy of their customers and employees. Some industries face additional privacy regulations:
- Healthcare: HIPAA prevents disclosing patient health information without the informed consent of the patient.
- Financial services: The Gramm-Leach-Bliley Act outlines steps financial institutions must take to safeguard sensitive data and inform consumers of their information-sharing practices.
- Consumer privacy: Businesses are required to have a privacy policy that outlines how they protect their customer’s personal information.
- Credit reporting: If your business uses credit reports, you must disclose how and when details are collected and used.
- Children’s privacy: The Children’s Online Privacy Protection Act (COPPA) allows parents control over what information websites can collect from their children.
8. Licensing and permits
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Depending on your industry and physical location, businesses may need to obtain licenses and permits to operate. For example, you may need to apply for a liquor license from a state agency if you plan to sell or serve alcohol.
9. Copyrights, patents and trademarks
Patents, copyrights and trademarks are forms of intellectual property protection that protect your work and ensure that you don’t infringe on others’ work. Copyrights protect literary and artistic works, trademarks protect things like words or logos that help identify products or services and patents protect inventions of function or design.
10. Accounting and auditing
After the accounting scandals at large firms like Enron, the Sarbanes-Oxley Act strengthened the auditing requirements for corporations. It prevents a firm’s management from influencing an independent financial audit.
11. Environmental regulations
The U.S. Environmental Protection Agency (EPA) sets business regulations to protect the environment. EPA regulations vary by industry.
12. Securities and Exchange Commission
In order to protect investors, publicly traded companies are subject to regulations from the Securities and Exchange Commission (SEC). Companies selling securities like stock must report truthfully about their business and the risks involved with investing. Sellers of securities are also obligated by the SEC to treat investors honestly and fairly.
Ongoing filing requirements
Depending on your business structure and the state in which your business is located, you may have additional annual filing requirements. Here are a few to look out for:
- Annual report: Most states require businesses to file one. Check with your state for when it will be due.
- Filing fees: These typically go with the annual report or biennial statement.
- Articles of amendment: If you make any big changes to your business, like a change in address, name or membership, you need to report that, too.
- Taxes: In addition to business income taxes, you may also need to pay a franchise tax.
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