Starting a business means being in charge of the survival of your operation no matter how small your business may be. You’re now responsible for following the laws that apply to legally operating a business, but do you need to become a lawyer to do so? No, but you have to understand some legal basics. Discover some of the laws that affect you as a small business owner and how they protect you and your customers.
Protect Sensitive Customer Information
When you’re selling products on your own website or taking orders over the phone, you need customer information to make the purchase happen. Selling online allows you and your customers to share information without giving out sensitive data through a merchant service account.
During the course of a transaction, you may still collect customer mailing addresses and phone numbers when necessary. But you need to keep this information secure even though the United States doesn’t have a single comprehensive law regulating the collection and use of personal data. Even though no specific law for customer data protection exists, you should be aware of other data protection regulations that govern the processing of personal data.
Track Your Finances for Taxes
Business income gets treated differently than personal income for tax reporting purposes. If you run a small operation that has no incorporation paperwork, you’re considered a sole proprietor by the IRS. You now have to maintain records for all financial details. In other words, you have to track your costs ranging from supplies to internet service and declare your profits.
You’ll likely pay a higher tax rate on your profits than you would on employment income, but you also have the benefit of write-offs that lower your taxable profits. For this reason, you should keep records of all of your business spending and profits throughout the year.
Don’t Infringe on Other Intellectual Property
You may feel as though you offer better products and services than your competitors. But make sure that what you’ve created doesn’t infringe on someone else’s product.
For example, an individual creates an item in the field you’re working in that’s successful. You feel that you can do better, so you develop a comparable item. In this case, you must make sure that what you’ve built doesn’t borrow substantially from your competitor.
Sometimes, you can rely upon common elements for your creation, but if your competitor created something distinctive for that item, you can’t legally copy any part of it. Be sure to verify that your product doesn’t infringe on other intellectual property before bringing your idea to market to avoid a potential lawsuit.
Above are only some of the issues that a new small business owner faces upon startup. For questions or legal counsel, don’t hesitate to talk to a lawyer who is familiar with your industry to find out what you need to know and how to avoid legal issues as you begin building your business and your base of customers.
Article Submitted By Community Writer