Very few have the luxury of a team of lawyers around them who could help them in case of making any particular decision. So why, as an entrepreneur, it is essential to know the basics of marketing and accounting. They also need to remain mindful of the fundamentals to avoid the potential failure that causes legal disputes. Today we will talk about some business laws that every entrepreneur should be aware of in Bangladesh.
1. Business licenses & Laws for Company Formation
A company needs to be legally registered before it can start its serious stuff. There are various types of business entities specified by the law, and an owner needs to select one for his/her enterprise. The process begins by calling your territorial government. Each model comes with its identical set of compliance requirements which must be followed by the company. The precise nature also dictates the tax requirements of the new entity. There are various requirements, both before and after the incorporation that must be done by the individual setting up the new venture.
See if you require a license and if you need to know about any zoning rules. For federal and state licensing, look into the Small Business Administration site and follow the instructions that ask for your business.
2. Fair Labor Standards Act
The acts control federal minimum wage, overtime rules, child labor bans, and record-keeping requirements. You will want to scrutinize it to make sure you take action with the present laws.
3.Federal Equal Employment Opportunity laws
This bunch of rules forbids discrimination on the basis of race, color, religion, sex, or national origin. Moreover, It also included equal wages for men and women and saved people with disabilities.
4. Family and Medical Leave Act
As your business makes ground and extends, you are going to need to hire employees more. It will open a proverbial pandora’s box of rules and regulations, which covers the Family and Medical Leave Act.
In addition, it is a federal law that established certain rights for employees to take personal leave while retaining their position with your business. For illustration, if an employee has a baby and needs time off, or if an employee is struggling with a medical condition or is taking care of a loved one with a medical situation, there are rules that you, the employer, must bond with. This comprises allowing the employee to take a definite amount of time off, as well as how much leave impacts compensation. A full set of benchmarks is accessible via the Department of Labor.
5. Occupational Safety and Health Act
This law ensures employees’ safe work circumstances, free from recognized health dangers.
6. Workers Compensation
Most countries require employers to purchase an insurance policy that compensates employees if they get injured or become ill from workplace exposure. To gain more about your responsibility as an owner and what an employee is entitled to, check out the department of labor website.
7. At-Will work doctrine
In all states except Montana, there is an at-will work law in place. This suggests employers can dismiss an employee at any time for any reason unless it’s an illegal one. Similarly, a particular employee can quit the job at any time.
8. Obtain an employer identification number
To record your merchandise taxes, you’ll need an employer identification number. Visit the IRS portal to get your number, and you’ll get the number instantly after filling out the necessary forms virtually.
9. Know the taxes you have to pay
Take some time to investigate the federal tax, social security, Medicare, and federal unemployment tax prerequisites. The IRS has a breakdown of your tax responsibilities as an owner. You’ll also want to talk with an accountant regarding these obligations and shape out a budget. Moreover, you’ll possibly have to pay state taxes as well. Use this website to examine your state tax needs.
10. Vicarious liability
Most business owners realize they’re accountable when employees cause harm to themselves or others while on company assets or while using company equipment. But, the fact is that employers can be liable for damage done by an employee at any time if that employee caused injury within the course and scope of his or her job responsibilities.
For instance, you might interrogate an employee to drop something off at the post office on the way home. If that employee causes an accident en route, even if he or she is driving a personal vehicle, your business could be liable for damages. This is a general situation, but it’s one that could have a significant effect on your business. To evade yourself on the false end of a vicarious liability summons, identify your employees’ job descriptions cleanly and buy a commercial general liability insurance policy that covers employees at work and in personal vehicles.
10. Overtime Rules
It is natural to work long hours for small pay at the beginning of the startup career. A higher amount of people know that putting in more than 40 hours per week equates to working overtime. Still, it’s crucial to remember that individual salaried employees are entitled to overtime pay. Some employers try to dodge overtime entirely by categorizing employees as uncommitted contractors. Not only is this unauthorized, but it’s also easy prey for wage and hour plaintiffs’ attorneys. A few startups are already encountering legal woes over this practice, so make sure you classify your employees accurately.
If you have non-released workers working overtime, alongside off-the-clock work, pay them for that time and make sure your payroll executives are up-to-date on present wage and hour laws. However, it might feel costly now, doing so will save avoidable litigation expenses down the line.
11. Patents, copyrights, and trademarks
You may have an excellent product, logo, website photo, and company name. Still, if any of those constitute someone else’s intellectual substance, you will have to pay for using them without consent. Intellectual property law covers patents, which protect inventions; copyrights, which protect artistic creations; and trademarks, which protect brands. Punishments for infringing intellectual property rights range from crippling monetary penalties to injunctions, both of which can be fatal to a growing business. Knowing what constitutes intellectual attributes helps, but in some cases, it isn’t enough. “Patent trolls,” people who enroll as many patents as they can and file frivolous lawsuits, are everywhere. Retaining a lawyer can be costly, but a good one will save your company thousands in the long run by defending you against baseless litigation, researching and filing patents and trademarks, and warning you about potential infringement issues. You don’t have to go back to school for your J.D., but as an entrepreneur, you do need to be ready for usual legal circumstances. Extended, expensive litigation can pull down even the most promising startup. Educate yourself on connected laws, so that the inverse scenario will keep away from you.
12. Recruit Employees
when you plan to fetch on an employee, it influences your taxes. The amount of time an individual employee works for you will make a variety when it comes to taxes, so experiment with the difference between a W-2 employee and a 1099 employee before making any forging decisions.
13. Truth in Advertising and Marketing
This law needs all advertising efforts to be truthful. In addition, if you make any claims in the course of an advertisement, you must have evidence to back it up. You can’t ever be deluded or unfair. This rule becomes even more particular when you market to children or use endorsements.
14. CAN-SPAM Act
Did you know there is an email law? It’s true. The CAN-SPAM takes action to regulate commercial emails.
The law requires integrity and bans deceptive subject lines. Besides, you must tell recipients where you locate and give them an easy way to opt out of your email messages.
15. Tele-Marketing Rules
If you plan to trade products by phone, mail, or online, you’ll need to touch upon the FTC’s telemarketing rule. According to this rule, businesses must ship products within 30 days, provide delivery notices if a product delay, and give refunds if an order can not be filled. You’ll also want to inspect out the regulation surrounding the Do Not Call Registry.
16. Sales- Tax Collection
Owners of a brick-and-mortar storefront charge a sales tax that’s required in that particular area, but what will be the terms if you have a virtual business? According to the FTC, if your business has a physical presence in a state, such as a store, office, or warehouse, you must collect applicable state and local sales tax. Of course, some states don’t have any sales tax. You’ll want to read the FTC guidelines and check with your state’s revenue agency to make sure you comply with the law.
17. International Sale Laws
With a web portal, any business can get the luxury to sell its products internationally. It instantly opens the door to your business to a new audience, but that exposure comes with regulations. It poses concerns about shipping, various taxes, and customs. The FTC has a guide to assist you to navigate the international waters.
18. Data Security
If your business collects sensitive private information from its buyers, you must have a full-proof security plan in place. Aside from keeping the data under lock and key, you should only gather the information that you need, nothing more. The FTC has a conductor to help businesses put a strategy in place.
19. Affordable Care Act
Healthcare laws have drastically changed in the last few years. The new Affordable Care Act influences every business. Assemble your startup by reading about the new healthcare policies.
20. Healthcare Privacy
If your small business provides healthcare policies that can get in touch online, you’ll need to come up with a safety plan for this data as well. If the information is ever breached, there are rules in place to inform those affected.
21. Protect your Intellectual Property
If you reveal a fresh product, you’ll want to keep it safe with a patent. You can also safeguard your business name, symbols, and logos by an appeal for a trademark. You can learn more about the method through the United States Patent and Trademark Office. To preserve books, movies, digital work, and musical pieces, you’ll want to copyright your service. The United States Copyright Office can favor you to file the accurate paperwork.
Though we hope you never have to go here, in some cases, new businesses hit monetary roadblocks. If your company has currency flow worries and is exploring the chance of bankruptcy, there are several laws you’ll want to familiarise yourself with before filing the paperwork. The Small Business Association has the resources you’ll need to review Researching business laws can be an exhausting task, but it’s always best to be aware. While the chart above covers a lot of legal ground, other requirements may lie to your business. To prevent yourself, find a knowledgeable attorney, and talk regarding laws that are specific to your business.
23. Laws Governing E-commerce Transactions
The internet has become the world’s biggest marketplace, with many e-commerce platforms selling their services and products. This led to the framing of laws governing e-commerce deals. Online businesses must know how sales tax will gather from them and what are their legal duties towards customers. They must also be mindful of the information they legally need to showcase on their websites.
24. Winding up of business
It might be scary to think of winding up a business before beginning up. But it is often told that you should prepare for the worst possible scenario and hope for the best outcome. So the process of winding up should be done naturally as many people are involved with the functioning of the company.
There are 3 modes to wind up a business and these are:
- Fast track exit mode
- Court or tribunal route
- Voluntary closure
Among the 3 ways referred to above, the best option is to choose the fast track exit mode. It takes less time to shut down a company with minimal cost involved. For this, 2 conditions are mandatory :
First, the company should not have any assets or liabilities. Secondly; there shouldn’t be any business operations for the past year. And in the case of the voluntary closure, the shareholders and creditors need to be on the same page of winding up. Despite being an easy route, it is not often applicable and practical at times. The third process of winding up via tribunal courts is not advisable at all. As it involves several meetings with various stakeholders leading to prolonged court proceedings. There is another way of winding up the company using the Insolvency and Bankruptcy Bill, 2015. In this case, an insolvency professional was hired to liquidate the assets of the company within 90 days, in accordance with the ‘Startup India Action Plan’.
25. Employment-Based Immigration
There are various ways to immigrate to the United States legally. For those who wish to migrate here so that they can work in the U.S., there is the choice of applying for and obtaining an employment visa. There are employment-based non-immigrant visas and immigrant visas. The primary difference between these two types of employment visas is that the former is for those seeking temporary authorization to work in the U.S., and the latter is for immigrant workers who wish to remain and work in the U.S. permanently. The United States Citizenship and Immigration Services and the Department of Labor (DOL) both provide useful data about employment-based immigration.
26. Non-Immigrant Visas
An immigrant worker can obtain a non-immigrant work visa, which will permit him or her to work in the U.S. for an interim period. Permissions that grant temporary worker status require the sponsorship of an employer. The kind of temporary visa that an employer needs to apply for will depend on the position that needs to fill. For a temporary visa to grant, the employer must apply for the visa and show that the place for the immigrant exists. If the immigrant is laid off or fired, he or she is no longer permitted to work in the U.S.
27. Fraudulent Misrepresentation
A contract is not considered valid unless all parties are in agreement to the terms. If the disclosed terms are not precise, then any deal is based on a false premise, and the contract is invalid. Knowingly making false statements — whether in writing, verbally, through a straightforward gesture, or even silence — constitutes fraudulent misrepresentation if it has a material effect on the deal.
For example, a drug company working out an acquisition by another company boasts of several “promising” drugs in clinical trials. Still, it fails to mention that they likely will not make it to the market based on disappointing results. Since the acquiring company assumed these drugs would add value to the deal, it suffered damages by overpaying.
Even if the representation was made without knowledge of whether it was true, it could give rise to a fraudulent misrepresentation claim if it was made recklessly. In such instances, the party making the representation is acting recklessly solely to induce the other party into the contract. Using the example above, let’s say the drug company boldly claims it is the only one developing a particular class of pharmaceuticals even though it isn’t positive about this claim. If other companies are working on this specific type of drug, the reckless misrepresentation would have a material impact on the deal.
Other types include negligent misrepresentation, in which one party failed to ensure the accuracy of the representation adequately, and honest description, which is neither fraudulent or negligent. Keep in mind that a misrepresentation that does not have a material effect on the contract does not give rise to legal action.
28. Environmental Laws
Laws protecting our shared waterways, air, trees, and other natural assets are meant to ensure a more secure future for the next generations.
While environmental laws may seem burdensome to tiny business owners, just keep in mind that your competitors also must abide by them. This section broadly covers environmental regulations about businesses, with articles on indoor and outdoor air impurity, recognizing and disposing of hazardous waste, overviews of federal environmental protection laws.
29. Restraint of Trade
At the most primary level, “restraint of trade” is any act that confines another party from conducting business as they usually would without such a restraint. For example, two companies agreeing to fix prices to put another competitor out of business is an illegal restraint of trade. Other examples comprise creating a monopoly, coercing another party to terminate competing with your business, or unlawfully interfering with a business deal. Although, not all restraints of trade are illegal, alongside non-competition agreements with employees in states where such agreements — if considered logical– are enforceable. The doctrine of restraint of trade is rooted in English common law and codified under U.S. statutes and different state antitrust laws. While federal and some state laws serve as restraint of trade and other antitrust acts as a crime, parties that suffer losses from such actions may seek monetary recovery in civil court.
Some business owners have all the fate. While most are just the right business people, your overall expertise will determine how much the business will grow.
Having success in business is not just about doing things the way you want; it’s also about obeying specific entrepreneurial laws. So it is vital to remain conscious of all the business to avoid all the hassle.