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Business Laws and Regulations

Small businesses are subject to various state and local laws and regulations related to employment, intellectual property, insurance, and other matters. The type and scope of your business will generally determine which laws and regulations are applicable. And if you do business across state lines, or even in multiple counties, you may be subject to multiple sets of laws. This section provides information and links to government resources to help entrepreneurs comply with business laws and regulations at all levels of government -- local, state and federal.

Business Regulations at a Glance

It's important for small businesses to understand the various regulations governing commerce in their locale, which may include special licenses, permits, and other specific requirements. For instance, establishments that sell alcoholic beverages, typically bars and restaurants, must first obtain a liquor license. Also, any structure used for business purposes -- whether it's a retail store, assembly plant, or office building -- must comply with state and local building codes.

Federal regulations include authorization to work in the United States as a legal resident; occupational safety and health standards for the workplace; federal taxes; environmental laws; and so on. Businesses that wish to protect their intellectual property must file their applications with the U.S. Patent and Trademark Office. The federal government also handles bankruptcy filings and proceedings.

Since states are always interested in attracting new businesses, they typically provide compliance assistance to help businesses follow the various regulations that may apply. An attorney also can help your business get into compliance with the law.

Immigration Law and Employment

Whether you were born in the United States or are in the country on a visa or as a permanent resident, you will have to prove your work eligibility in order to hold a job. The employer will complete Form I-9, proving legal residence, using personal documents as proof (typically a state-issued I.D. and Social Security card). Workers without authorization often work for cash or otherwise "off the books," but employers who fail to prove worker eligibility are in violation of federal law.

While the employer must make a reasonable effort to visually verify the authenticity of documents proving work eligibility, they are not liable for good-faith mistakes. Original documents are always required; no photocopies may be accepted.

Employers also may sponsor foreign nationals for certain jobs through H1, L1, or other visas. But the number of these guest worker visas is limited.

Environmental Regulations

Businesses are subject to federal, state, and local regulations with respect to environmental safeguards. Key federal laws, most of which are enforced by the Environmental Protection Agency (EPA), include:

  • Clean Air Act - Regulation of air emissions from smokestacks and other sources (carbon dioxide, acid rain, ozone, etc.)
  • Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) - This law addresses the clean-up of abandoned or unmanaged hazardous waste sites
  • Endangered Species Act - Used to protect threatened or endangered plant and animal species
  • Occupational Safety and Health Act (OSHA) - While this law is primarily concerned with worker safety, it often addresses environmental issues (such as toxic substances in the workplace)

The links below will provide additional information about business laws and regulations.