5 Laws and Regulations Every Startup Should Be Aware Of

Here are five legal and regulatory issues you should be aware of when starting a business.

When starting a business, many entrepreneurs are not aware of rules and regulations that pertain to their business an industry. This can, unfortunately, become a costly mistake. Of course, it is not easy to learn every law pertaining to your small business since so many change. However, it is wise to know a few basic ones.

Paying careful attention to obey state and federal rules and regulations, while cumbersome, will help you save time and money in the long-term. The last thing you want is an impromptu call from a union or the IRS claiming that violations have been assessed.

So, here are five legal and regulatory issues you should be aware of when starting a business:


  1. Employment Laws

    According to the Cornell Legal Information Insitute (LII), “Employment law is a broad area encompassing all areas of the employer/employee relationship except the negotiation process covered by labor law and collective bargaining. Employment law consists of thousands of Federal and state statutes, administrative regulations, and judicial decisions.” Given the broadness of employment regulations it is wise to understand the basics, otherwise, you will get into serious trouble if you don’t pay qualified employees overtime or forget to give workers their breaks.

  2. Environmental Laws

    By definition, “Environmental law is a collective term describing international [laws and regulations that] regulate the interaction of humanity and the natural environment, toward the purpose of reducing the impacts of human activity.” When dealing with your local government, many small business owners will often find they have to deal with overzealous environmental laws. While they are there for good measure, you could struggle with a number of infractions. For this reason it is important to learn more about environmental law as it applies to your business, confirm if any environmental permits are necessary and check with your state contacts to help with compliance to local environmental regulations.

  3. Business Tax Laws

    Tax laws change regularly. And if you happen to break a tax law, you will be in a world of hurt. In fact, this is the quickest way to lose your business license. One way to avoid this problem is to hire a qualified and hardworking small business attorney who will help you cover all bases. Meanwhile, you should stay apprised of tax law changes (2010-2017) over the next few years. Otherwise, one wrong move can yield hefty penalties and fines.

  4. Sexual Harassment Laws

    When an employee sexually harasses another worker, this can spell trouble for the business. While the Supreme Court has recently made it harder to sue businesses for retaliation and discrimination, it is still a critical issue that impacts many workplaces. To avoid long-term problems, you should have a solid, effective and legally based anti-harassment policy. Over time, this will save your company plenty of anguish as one incident can cause irreparable damage to your reputation, company culture and bottom line. Learn more about sexual harassment here.

  5. Disability Rights Laws

    Does your company ensure equal opportunity (and access) for people with disabilities? Disability rights laws are often overlooked given it is “an area of law that overlaps with many other areas of law – including employment law, administrative law, elder law, consumer law, construction law, insurance law, school law, health law, social security law, and civil rights law,” according to Jacquie Brennan, an attorney with the Southwest ADA Center.

    For example, an “employer may not ask you to take a medical exam or ask any disability-related questions. The employer may [however] ask questions about your ability to perform specific job functions, including asking you to describe or demonstrate how you would perform those functions,” according to the ADA Disability Law Handbook. Meanwhile, if your brick and mortar store does not provide wheelchair ramps and other methods of reaching the building for disabled individuals you could be penalized. Check your local state handicap access laws and codes to ensure compliance.

Without a doubt, as a small business owner you must follow and understand business law and regulations. Keeping these basic laws and regulations in mind can help out tremendously in the long run.


This article has been edited and condensed. Tricia Borren is a mom and a blogger from California writing on behalf of Vancouver-based personal injury law firm Taylor and Bair. There’s not much more to her than that!


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