6 Important Areas of Law Every Business Owner Needs to Know

Important Areas of Law

If you own a business, especially a new or small one, you generally don’t have a huge legal staff on retainer to deal with the plethora of legal concerns that emerge during the course of a day, week, or quarter. However, there are several areas of law that you should become acquainted with in order to ensure that your company is ready to expand.

While this is not an exhaustive list, here are six key areas of law that every business owner should be familiar with.

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1. Obtaining a Business License and Other Legal Documents Required

Depending on where you plan to open your major location, you will most likely need to obtain a license by contacting your local city government or applying online. Visit the Small Business Administration’s website for general information on federal and state licensing rules.

2. The Family and Medical Leave Act is a federal law that allows people to take time off for family

You’ll need to hire staff as your company grows and gains traction. This will unleash a flood of new laws and regulations, including the Family and Medical Leave Act. This is a federal statute that establishes certain rights for employees to take personal leave while still working for your company. There are guidelines that you, the employer, must follow if an employee has a baby and needs time off, or if an employee is battling with a medical condition or is caring for a loved one with a medical condition. Allowing the employee to take a set length of time off, as well as how such leave affects compensation, are all factors to consider. The Department of Labor has a complete set of guidelines.

3. Workers’ Compensation Insurance

Most states require companies to get workers’ compensation insurance, which provides financial assistance to employees who are injured or become ill as a result of a working accident. In general, each state is in charge of its own set of rules and regulations.

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4. Advertising and Marketing Truth

This federal legislation mandates the truthfulness of all advertising and marketing endeavors. Additionally, if you, as the business owner, make any claims during an advertisement, you must have proof to back up those statements. You must never be deceitful or unfair. When marketing to youngsters or using endorsements, this law becomes much more stringent.

5. CAN-SPAM Act (Canadian Anti-Spam Legislation)

The CAN-SPAM Act is a federal legislation that governs commercial email solicitations. It forbids false subject lines in emails sent to consumers or clients, for example. The message’s content must be accurately conveyed in the subject line. Furthermore, you must inform recipients of your company’s location. The receiver must also be able to locate your physical postal address in the email (most business emails include this information at the bottom), and you must provide a simple way for the recipient to unsubscribe from your email list. The Federal Trade Commission states that each violation of the CAN-SPAM Act can result in fines of up to $42,530.

6. Federal and State Taxes

It’s true what they say. Only two things are certain in life: death and taxes. This is why you should become acquainted with the relevant state and federal tax legislation. The business structure you choose when starting your company has a significant impact on the taxes you’ll have to pay as a business owner. The taxes owing will alter whether you own a limited liability company vs an S-corporation, for example. The Internal Revenue Service (IRS) presents an outline of the various sorts of taxes that business owners are responsible for.

Understanding important company laws can be intimidating and even laborious, as evidenced by the six topics outlined above. Nonetheless, it is critical to be well-informed. A business owner who burys their head in the sand risks committing a legal offense that could jeopardize their company’s long-term existence.