Pre Start-up/Assessing Your Business Idea
Government Regulations and Your Business
It may be inconceivable to you that your home-based consulting
service or handknit sweater business would have to comply with
any of the numerous local, state and federal regulations, but
in all likelihood it will. Avoid the temptation to ignore regulatory
details. Doing so may avert some red tape in the short term, but
could be an obstacle as your business grows. Taking the time to
research the applicable regulations is as important as knowing
your market.
Below is a checklist of the most common requirements that affect
small businesses, but it is by no means exhaustive. Bear in mind
that regulations vary by industry. If you're in the food service
business, for example, you will have to deal with the health department.
If you use chemical solvents, you will have environmental compliance
to meet. Carefully investigate the regulations that affect your
industry. Being out of compliance could leave you unprotected
legally, lead to expensive penalties, and jeopardize your business.
Americans with
Disabilities Act
The Americans with Disabilities Act requires access to public
accommodations and commercial facilities. It's good business sense,
and failure to comply can result in severe penalties. For further
information, see the American's with Disabilities web site at
http://www.usdoj.gov/crt/ada/adahom1.htm
The Americans with Disabilities Act also prohibits discrimination
in employment against persons with disabilities. Under the law,
an employer cannot discriminate against an individual with a disability
who, with or without a reasonable accommodation, can perform the
essential functions of the job held or desired. For additional
information concerning the employment provisions, go to the web
site of the Equal Employment Opportunity Commission, at http://www.eeoc.gov/facts/fs-ada.html.
Information concerning reasonable accommodation is provided at
http://www.eeoc.gov/facts/accommodation.html.
Employment Discrimination
The Equal Employment Opportunity Commission enforces Title VII
of the Civil Rights Act of 1964, which prohibits discrimination
on the basis of race, color, religion, sex, and national origin.
It also enforces the Age Discrimination in Employment Act, which
prohibits discrimination on the basis of age against persons 40
and older; Title I of the Americans with Disabilities Act, which
prohibits employment discrimination against people with disabilities;
the Equal Pay Act; and sections of the Civil Rights Act of 1991.
Information concerning race and color discrimination may be found
on the Internet at http://www.eeoc.gov/facts/fs-race.html;
about national origin discrimination at http://www.eeoc.gov/facts/fs-nator.html;
about religion discrimination at http://www.eeoc.gov/facts/fs-relig.html;
about pregnancy discrimination at http://www.eeoc.gov/facts/fs-preg.html;
about sexual harassment at http://www.eeoc.gov/facts/fs-sex.html;
and about age discrimination at http://www.eeoc.gov/facts/age.html.
Information for businesses is also available by calling the EEOC
at (202) 663-4900 or (202) 663-4494 (TTD), or the EEOC's Publication
Distribution Center at 1-800-669-3362 (Voice) or 1-800-800-3302
(TTD).
Occupational Licenses
Many types of businesses require that you be licensed or certified
to practice in a particular field. Accounting and real estate
appraisal are examples of fields that require licenses or certification.
A representative from your profession's regulatory board can assist
you.
Business Licenses
There are many types of licenses. You need one to operate legally
almost everywhere. If the business is located within an incorporated
city limits, a license must be obtained from the city; if outside
the city limits, then from the county. For more information contact
the county or city office in your area. The Small Business Administration
has a web site that lists state contacts to assist you: http://www.sba.gov/hotlist/license.html.
Certificate of Occupancy
If you are planning on occupying a new or used building for a
new business, you may have to apply for a Certificate of Occupancy
from a city or county zoning department. For more information
contact the county or city office in your area.
Business Organization
There are many forms of legal structure you may choose for your
business. The most common structures are Sole Proprietorships,
General and Limited Partnerships, C and S Corporations and Limited
Liability Companies. Each legal structure offers organizational
options which are appropriate for different personal situations
and which affect tax and liability issues. We suggest you research
each legal structure thoroughly and consult a tax accountant and/or
attorney prior to making your decision.
Fictitious Business
Name
Businesses that use a name other than the owner's must register
the fictitious name with the county as required by the Trade Name
Registration Act. This does not apply to corporations doing business
under their corporate name or to those practicing any profession
under a partnership name.
Protecting Your Idea
If applicable to your business, you may want to apply for trademarks,
patents and your copyrights. Information regarding these applications
is listed below.
Trademarks
Trademarks are names or symbols used in any commerce that is
subject to regulation by state government or the U.S. Congress.
State Registration
of a Trademark:
Trademarks and service marks may be registered in a state for
a term of ten years. For more information about Applications for
Registration of Trademark or Service Mark in your state contact:
www.sba.gov/world/states.html
Federal
Registration of Trademark and Patent
To register a trademark contact:
U.S. Department of Commerce
2900 Crystal Drive
Trademark Assistance Center
South Tower
Arlington, Virginia 22202
(703) 308-9000 or (800) 786-9199
To register a patent, contact:
Asst. Commissioner for Trademarks, Patent Applications
Washington, D.C. 20231 (800) 786-9199
Also, visit their web
site.
Caution: Federally registered trademarks may conflict
with and supersede state registered business and product names.
Businesses are encouraged to check for conflicts with federal
trademarks.
Patents
Contact:
Superintendent of Documents
P.O. Box 371954
Pittsburgh, Pennsylvania 15250-7954
(412) 512-1800
New and useful inventions can be protected by a U.S. patent.
Professional assistance from a patent attorney is strongly urged
because patent procedures are detailed and technical. A patent
search is performed to see if a patent currently exists on the
same or nearly the same device and, if not, to make proper application
with the Patent Office.
Note: Only attorneys and agents registered with the U.S. Patent
Office may represent inventors in related matters. The office
has geographical and alphabetical listings of the more than 11,000
registered agents. Only these agents may perform patent searches
in the patent office. Inventors or their attorneys can make arrangements
with one of those agents. U.S. patents are issued by the Assistant
Commissioner of Patents, Washington, D.C.
Additional information is provided in the publication, General
Information Concerning Patents and Other Publications, distributed
through the U.S. Patent and Trademark Office.
Copyrights
Contact:
U.S. Library of Congress
James Madison Memorial Building
Washington, D.C. 20559
(202)707-9100 Order Line
(202) 707-3000 Information Line
Copyrights protect the thoughts and ideas of authors, composers
and artists. A copyright prevents illegal copying of written matter,
works of art or computer programs. In order to ensure copyright
protection, the copyright owner should always include notices
on all copies of the work.
Business Insurance
Like home insurance, business insurance protects the contents
of your business against fire, theft and other losses. Many small
businesses must protect themselves from lawsuits and other situations
for which they might be deemed liable. All businesses should research
the advisability of appropriate liability insurance. The Insurance
Information Institute can assist you in identifying the various
types of insurance, and other considerations. Contact your insurance
agent or broker.
Sales Tax Number
In most states there is a sales and use tax which applies to
the retail purchase, retail site, rental, storage, use or consumption
of tangible personal property and certain services. In other words,
sales tax must be collected on just about every tangible item
sold.
A sales tax number is required for each business before opening.
The number, plus instructions for collection, reporting and remitting
the money to the state on a monthly basis, can be obtained from:
www.sba.gov/world/states.html
State
Requirements and Other Considerations
All businesses with employees are required to comply with state
and federal regulations regarding the protection of employees.
For information on state labor laws, work force availability,
prevailing wages, unemployment insurance, unionization, benefits
packages and employment services contact:
www.sba.gov/world/states.html
Federal information may be obtained by contacting the:
U.S. Department
of Labor
Unemployment Insurance
Tax
Businesses are required by the state to pay unemployment insurance
tax if the company has one or more employees for 20 weeks in a
calendar year, or it has paid gross wages of $1,500 or more in
a calendar year. The taxes are payable at a rate of 2.7 percent
on the first $8,500 in annual wages of an employee. www.sba.gov/world/states.htm
Unemployment insurance must be reported and returns made to the
state.
Immigration Act
The Federal Immigration Reform and Control Act of 1986 requires
all employers to verify the employment eligibility of new employees.
The Immigration and Naturalization Service makes available a Handbook
for Employers which provides step-by-step instructions on how
to complete the "Employer Eligibility Verification"
Form I-9, which is required by law when hiring a new employee.
To obtain a copy of the handbook and the form and for additional
information contact:
http://www.ins.usdoj.gov/graphics/formsfee/forms/i-9.htm
Health and Safety
The Federal Occupational Safety and Health Administration (OSHA)
outlines specific health and safety standards employers must provide
for the protection of employees. Many states have similar standards.
For information contact: http://www.osha-slc.gov/SmallBusiness/Safety.html
OSHA also has a widely respected program called "OSHA Advisors".
This is a free, downloadable, and interactive program that can
give you feedback on safety concerns. It is available at http://www.osha-slc.gov/dts/osta/oshasoft/index.html.
Workers' Compensation
If a business employs three or more people, workers' compensation
insurance must be carried to provide protection to those injured
in on-the-job accidents. The State Board of Workers' Compensation
aids people who need claim assistance.
Wage Payments
Virtually all business entities are subject to the federal minimum
wage, overtime and child labor laws. Information on these laws
and other federal laws, may be obtained from:
U.S. Department of Labor
Wage and Hour Division
www.dol.gov/dol/esa/public/whd_org.htm
Bar Coding
The Uniform Code Council, Inc., (not a government agency) assigns
a manufacturer's ID code for the purposes of bar coding. Many
stores require bar coding on the packaged products they sell.
For additional information contact: Uniform Code Council Inc.,
P.O. Box 1244, Dayton, Ohio 45401, (513) 435?3870.
Electronic Commerce
The Department of Commerce has a web site, http://www.ecommerce.gov
, that can be used as a resource for regulations and other topics
concerning electronic commerce.
Small Business Regulatory Enforcement
Fairness Act (SBREFA)
The Small Business and Agriculture Regulatory Enforcement Ombudsman
and 10 Regional Fairness Boards were established to receive comments
from small businesses about federal agencies' enforcement actions.
The Ombudsman will annually evaluate the enforcement activities
and rate each agency and rate its responsiveness to small business.
If you wish to comment on the interactions with the IRS, call
1-888-REG-FAIR or visit the SBREFA web site at http://www.sba.gov/ombudsman/.