Companies are required to comply with the federal, state, and local statutes and regulations from the government. These regulations are administered by the legislative bodies and are carried out by the regulatory agencies. It affects how businesses report or declare their income and pay taxes. It also includes regulations on how these businesses dispose of waste or excess materials. There will always be government regulation on business for any type of industry and transaction.
There are numerous government regulations on business and it can get confusing, especially when you’re just a start-up or even if you’re already a seasoned small business professional. Finding the location of the said regulations can become overwhelming as well. However, it’s important and necessary to understand these general rules for the benefit of your business.
To better understand government regulations on business, it’s important that you know where to look and what kind of laws you are looking for. There are different places that you can go to but it will depend on what kind of regulatory information your investment needs. Entrepreneurs may need to go to several places or just one.
To help you out, here’s a rundown of three categories of government regulations on business:
1.Tax code
It always starts with taxes. There is more to it than just paying them though, you have to know which business tax to pay so that you know when to pay them. That way you would be able to set up your business account for future tax payments. This will help you in the long run and would spare you from issues and tax headaches in the future.
All United States registered companies have to pay federal taxes, every one of them. Most of these registered companies would have to pay state taxes, but this will depend on the state where the company is registered. Taxes are unavoidable, so refusing to pay taxes or avoiding taxes may result in penalties and imprisonment.
There are different types of taxes that you need to pay. It depends on how your business was formed since not all businesses are treated the same way. Sole proprietor businesses pay different taxes compared to S-corporations.
Here’s a rundown of the different types of taxes depending on their business structures to help you determine the type of taxes your business needs to file. Despite the different business types, these are the general terms that you need to know.
GENERAL TERMS
●Income tax
Filing an annual income tax return is common for most businesses. They must pay income tax as they earn and receive income. At the end of the year, they are expected to file a tax return.
●Estimated tax
Estimated tax payments are an alternative way to pay your income tax throughout the year as you earn money. Sole proprietors, partners, and S-corporations that have shares in the business usually pay estimated taxes if they’re expecting more than $1,000 worth of tax return by the end of the year. Corporations are required to make estimated tax payments if they make more than $500 in income.
●Employment tax
Companies with employees are expected to pay employment taxes. This includes Social Security, Medicare, federal income tax withholding, and federal unemployment tax. To learn more, check the IRS page.
●Excise tax
Businesses that make a purchase on specific goods have to pay excise tax. For example, your investment purchases gasoline, manufacture or sell certain goods, use equipment, and receive payments for services, then this puts you under excise tax law. For more info, visit the IRS guide here.
2.Employment and labor law
There are federal and state labor laws about employing workers and hiring independent contractors. There are various types of government regulations on businesses that cover this law.
For small businesses that are just starting, you may take advantage of a First Step Employment Law Advisor provided by the Department of Labor. They can help employers determine the major federal employment laws that need to be applied to the business organization. They will serve as mentors to the degree that they will help in record keeping and reporting requirements. They can also help with on-site posters for your worksite.
Here are some common labor laws:
●Wages and hours
The prescribed standards for wages and overtime pay are declared by the Fair Labor Standards Act from the Department of Labor. It affects private and public employment institutions and requires employers to pay employees at least the minimum federal wage and overtime pay of at least one and one-half times the regular rate except for exempt employees.
●Workplace health and safety
It’s required by The Occupational Safety and Health Administration (OSHA) that employers provide employees with serious hazards free workplace. Under the OSHA act, this is enforced through investigations and inspections at the business workplace.
●Equal opportunity
Employers with at least 15 employees have to comply with equal opportunity laws. The Equal Employment Opportunity Commission mandates that gender, age, race, religion, disability, etc. shouldn’t influence hiring practices.
●Non-US citizen workers
Employers must verify their employees have permits to legally work in the US as required by the federal government. For non-US citizens, there are several employment categories with different conditions, requirements, and authorized length of stay.
●Employee security benefit
Under the Employee Retirement Income Security Act, companies that offer welfare benefit plans, loans, or pension is subject to a wide range of disclosure, fiduciary, and reporting requirements.
●Unions
Businesses with union employees must file reports and handle certain relations with union members. For more information, visit the Office of Labor-Management Standards’ website.
●Family and medical leave
Under the Family and Medical Leave Act, employers with 50 or more employees are required to provide 12 weeks of unpaid leave credit. Employees are eligible if there’s birth or adoption of a child, or serious illness of the employee, child, spouse, or parent.
●Posters
In some states, the Department of Labor will require notices to be shared and posted visibly for employees in the workplace, such as alcohol warnings, etc.
3.Antitrust Laws
When companies conspire with other parties, such as competitors and third-party vendors, issues may arise in antitrust laws. To ensure that your company does not get run afoul of these antitrust laws, here are the issues the law addresses:
●Conspiring to fix market prices
This refers to the price discussion with competitors that may even affect a small marketplace.
●Price discrimination
Being able to secure favorable prices of products from the buyers when other companies can’t.
●Conspiring to boycott
Discussion with other businesses for the potential boycott of a supplier or competitor.
●Conspiring to allocate customers or market
Competitors agreeing to divide territories, customers, or the market is illegal. This provision applies even if the competitor doesn’t dominate the market or industry.
●Monopolization
The act of preserving your company’s monopoly position by the acquisition and exclusion of your competitors in the market. It also includes taking control of market prices.
If ever your business or company runs afoul of these antitrust regulations there is a big chance that the federal trade commission will contact you. To ensure that your business doesn’t run afoul, consult your company lawyer to know more about how to stay competitive and avoid antitrust laws issues.
Based on Materials from Fundera
Photo Sources: Castex, Pixabay, Pexels, Tampa lawyer, Vianinja, Flickr, Madc