8 Types Of Business Laws All Entrepreneurs Must Know
Running a business is not only about finding proper funding routes and creating an effective strategy. Entrepreneurs must know about laws which govern each and every aspect of running a company. Whether it is forming a commercial entity or hiring employees or even closing a business, each activity needs to follow one or more legal guidelines. In this article, we are presenting a list of the essential types of business laws that all entrepreneurs must know. Many business owners think that possessing knowledge of corporate commercial law is enough but they need to learn about every regulation that their organization needs to follow. Let’s take a look at some laws essential for running a business.
1. Laws For Company Formation
A company needs to be legally registered before it can start functioning. There are various types of business entities specified by the law and an entrepreneur needs to choose one for his/her enterprise. Each type comes with its own set of compliance requirements which must be followed by the company. The legal type also dictates the tax requirements of the new entity. There are various requirements, both before and after the incorporation that must be completed by the person setting up the new venture.
2. Laws Applicable To Business Finance
A business has mainly three possible ways of funding- self-finance, business loan or equity financing which involves issuing shares to investors. Banking and finance laws govern all three routes and entrepreneurs must know about them in detail. They must know about their legal liabilities when taking a loan or issuing shares of their company. There are also various legal compliances that must be adhered to by the business. Banks and other financial institutions are themselves strictly regulated by the government which makes it mandatory for their clients also to follow some legal guidelines.
3. Tax And Accounting Laws
Taxation is one of the most vital aspects of running a business and companies must know the applicable taxes that they are liable to pay. Moreover, they must also be aware of the documents they must maintain in order to be compliant with regulations. It is not only the income generated by an enterprise which is taxable but other decisions like hiring employees also have an impact on the issue. Accounts is another important topic that can have legal implications. Auditing is a mandatory activity for most companies which makes it necessary for them to keep their books in order. Corporations that run operations in multiple jurisdictions must know about the applicable laws in each one of them. For instance, when opening a facility In India, they must hire corporate lawyers in India to learn about their tax burden in the country.
4. Labor Laws
One of the most important types of business laws that all startup owners must know about is labor laws. A company has to follow legal guidelines while hiring a worker, paying his/her compensation and benefits and even while removing him/her from the job. Moreover, organizations have to ensure that they have provided ideal working conditions for their employees and have an anti-harassment policy in place. As mentioned earlier, hiring workers also have tax implications which come under the ambit of tax laws. Employers must ensure that their staff members are classified correctly and they are getting the minimum wages and leaves which they are entitled to.
5. Laws For Protecting Intellectual Property
Business owners must take the necessary steps to ensure the protection of their intellectual property assets. There is a misconception that only companies located in the information technology sector selling a software product or service need this kind of protection. The logo, brand name, trademark, and all other associated devices also fall in the category of intellectual property. Entrepreneurs must know about laws related to patents, copyrights, and trademarks. This will help them obtain legal ownership of their assets which will come in handy in case of infringement or unauthorized usage.
6. Laws Which Regulate Advertising And Marketing
Advertising and marketing practices adopted by a company must be in accordance with the relevant regulations. Almost every major economy in the world has framed laws for preventing unfair or misleading promotion. With the advent of digital media, some jurisdictions have seen new regulations for governing the way promotions are carried out on such medium. There are laws which dictate what cannot be included in a commercial email or how telemarketers can approach a customer.
7. Privacy Laws
Corporations have to be extremely careful about adhering to applicable privacy laws. The rising concerns about the safety of personal data which is accessed by companies for various reasons have led to the enforcement of data protection laws in various jurisdictions. The General Data Protection Regulation (GDPR) enacted by the European Union is an instance of such regulation. According to it, companies have to specify the personal information of customers they are storing along with the reason for doing so.
8. Laws Governing E-commerce Transactions
The internet has become the world’s biggest marketplace with numerous e-commerce operators selling their products and services. This led to the framing of laws governing e-commerce transactions. Online businesses must know how sales tax will be collected from them and what are their legal responsibilities towards customers. They must also be aware of the information they are legally required to display on their websites.
Entrepreneurs must know about the different types of business laws as they affect each and every facet of their business and poor knowledge in the area can have serious legal as well as financial implications.
Amy Jones has been serving as an experienced legal expert in Ahlcorporate Lawyers Firms in India corporate Lawyers Firms in India corporate Lawyers Firms in Indiaawat & Associates, who is related to corporate Lawyers Firms in India. She is a passionate writer and always on the lookout for opportunities for sharing her knowledge with the legal community. Follow her company on various social media networks like Twitter, Facebook, and LinkedIn.