Legal Regulations for Small Businesses

There are many laws to consider when starting a small business, so it is a good idea to have a general understanding of current business regulations. For a comprehensive source to understanding legislation, visit the U.S. Small Business Association. Unfortunately, unless you are a lawyer, reading legislation can be confusing. Here is a simplified guide to small business laws to help you abide by legal requirements:

There are industry-specific regulationsThe laws that govern a restaurant are not necessarily the same ones that regulate a pet-sitting business, so it’s a good idea to figure out the specific laws that apply to your business. Generally, however, regulations that almost any business must take into account are laws that deal with environmental protection, fair competition, online business practices and advertising.

Environmental protection lawsThe U.S. Environmental Protection Agency (EPA) is primarily in charge of regulating the ways in which a business impacts the environment. There are dozens of these laws, but  the EPA publishes a guide for small businesses, which you can find at These laws are particularly relevant if your business requires you to dispose of any hazardous waste or results in any emissions in the air or water. Should this be the case, you will be required to fill out a number of appropriate permits. Brush up on the Clean Air Act — legislation to help reduce airborne contaminants. You should also take into account whether you work near environmentally protected areas such as wetlands or endangered species reserves.

Fair competition lawsYou may love the game of Monopoly, but the government does not. There are antitrust laws in place to prevent free trade from being restrained. Fair competition laws are usually seen as only relevant to monolithic companies. This is not the case. Both state and federal regulators keep an eye out for any businesses that partake in illegal activities, such as price fixing, which is conspiring with other companies to try to set the price at a particular level, in spite of market forces.

Online business lawsOnline businesses are regulated by the Federal Trade Commission and are usually subject to the same regulations as their brick-and-mortar counterparts. Specifically, online legislation covers privacy laws, selling internationally via the Internet, and copyright infringement. Before you sell your products online, you should also consider whether you are subject to sales tax. If your business has a physical presence like a store or office within a state, you are required to collect local tax.

Advertising lawsAdvertising laws are in place to monitor the honesty of your marketing strategy. The Fair Packaging and Labeling Act mandates that product packaging is considered a form of advertisement and as such, your packages must fulfill certain criteria, depending on your product. For example, food products are typically required to list information such as nutritional facts, serving size, and the company’s contact information. Other advertising regulations apply to phone and online marketing. Finally, there are legal standards for whether or not you can call your product sustainable, organic, or “green.” In order to make these claims, you must typically be certified by the EPA.