Open Economy Definition in Business

10 Need-to-Know Small Business Regulations

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A lot of planning and preparation go into starting a business, and it's important to know about some laws that can have an effect on your plans. Whether you know about the laws or not, as a small business owner, you can still be held aCC0untable if you don't follow them. These regulations may vary by location, so check with authorities in your area to see if they apply to your entrepreneurial efforts.

Zoning Laws

If you live inside city limits, check with the city's administration to find out if zoning allows you set up your business in the location you've chosen. If you're in a rural area, check with personnel from the county to determine if there are any zoning regulations in place that would impact your business location.

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Business Naming Regulations

When you're choosing a business name, it's important to make sure your favorite name isn't already being used by another company. The Secretary of State (SOS) where you're setting up shop is the place to check. Many states allow entrepreneurs to look up the names of registered businesses online, so a trip to the SOS office isn't usually necessary.

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Business Structure

You're required to choose a business structure for tax purposes when setting up a business. A sole proprietorship is the easiest to establish and puts one owner in complete control. It also puts full liability on the owner if anything goes wrong and the business is sued. Partnerships are similar to sole proprietorships, but with more than one owner and liability being divided between the partners. An LLC provides the benefits of the other structures while providing some protection for the owner's personal assets.

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State Tax Licensing

Register with the Department of Taxation in your state to stay in compliance with tax laws. This is where you get your vendor's license and instructions on filing commercial activity tax (or CAT) and sales tax. Other taxes you can set up to pay through the state's Department of Taxation include municipal taxes, worker's compensation and unemployment compensation if you're hiring workers and your employer withholding taxes.

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Federal Regulations

There are Federal regulations in place for certain industries that can cause trouble for you if you don't follow the laws, as noted by the SBA. To get specific details about the Federal regulations that affect your business, review the regulations through the agency that oversees your industry.

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Get a Federal Tax ID Number

You'll need a Federal tax ID number called an Employer Identification Number (EIN) when you get ready to file your taxes. This number is generated through the IRS website. You can fill out the online form, and the number is provided immediately after you finish submitting your business information to the IRS.

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Know the Different Employee Types

When you hire an employee, there are tax implications you need to understand. There's a difference between 1099 employee who work as independent contractors and W-2 employees who you take out taxes for and also match a certain percentage. Knowing the difference before hiring and managing the paperwork aCC0rdingly can save confusion and legal troubles later.

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Truth in Advertising

There are regulations in place requiring marketing and advertising to be accurate and truthful. Be sure you have the proof on hand to back up any claims you make about your product or service and what it can do for customers. Your business advertising can't be deceptive, or it puts your company at risk of a lawsuit.

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Health Care for Employees

The Health Care Tax Credit rewards small businesses that hire employees and provide health insurance for them by paying at least half the insurance premium for workers. When your business offers health coverage through the SHOP marketplace and meets several other key criteria, you're business is eligible for this incentive program.

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Privacy Regulations

Privacy regulations dictate that your business protect the private information about your employees and your customers. It's important to have a plan for managing the secure handling of all documents that contain personal information. Data must be stored securely, and you can't ask for information you don't have a legitimate need to possess.

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Open Economy Definition in Business

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