The 5 Types of Laws in Business: What All Small Business Owners Should Know
Business owners fear getting sued as much as not having enough cash in the business. It’s not just getting sued because of COVID-19.
Businesses face legal risks from every direction. That can be scary, but the more you understand the law, the more you can avoid legal trouble.
Read on to discover the types of laws that small business owners need to be aware of.
1. Business Formation Laws
Do you know if your business should be an LLC, C-Corp, or be taxed as an S-Corp? That’s the first question to ask yourself when starting a business.
It’s one of the main reasons why you should hire small business attorneys when you start your business. The wrong legal structure could create more headaches and cost more money.
2. Employment Law
As soon as you hire your first employee, you take on a whole area of law. There are laws around hiring practices, firing employees, paying employees, and getting workers compensation insurance.
You should also brush up on personal injury laws. These are laws that are designed to protect consumers if they were injured on your property or using a product or service.
There is some crossover between personal injury law and workers compensation laws. That’s because both are likely to settle out of court and deal with insurance companies.
3. Tax Law
If you fail to understand tax laws, you could end up paying penalties and fines. One area where businesses see fines is with payroll taxes. Businesses that don’t pay enough or pay on time face stiff penalties.
You also have to make sure that you know when to collect sales taxes, pay taxes to the state, and pay business income taxes. The legal structure that you choose for your business influences how your taxes are filed and paid.
4. Internet Laws
Internet laws are changing frequently, which is why you need to keep up. There are privacy laws like GDPR and CCPA, which govern how you use a person’s data.
There are laws around sales taxes for online sales. There is a growing trend where businesses are sued because their websites violate the Americans with Disabilities Act.
5. Intellectual Property Laws
Intellectual property laws deal with copyright and trademarks. Small businesses get in trouble here if they don’t protect their own intellectual property or use someone else’s.
A common case is when businesses take images without permission and post them on social media accounts. They could violate copyright laws and not know it.
The Types of Laws for Small Businesses
You’re not a lawyer, and you certainly didn’t think about the law when you started your business. Legal issues are just one of the hard realities of owning a business.
You need to know about employment law, taxes, copyright laws, and so much more. You need to have an attorney by your side who can help you navigate the various types of laws.
Visit the Business section of this site for more legal insights for small businesses.
