Does Your Small Business Meet Regulations?

Updated on April 2, 2017
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Audrey Howitt has been a licensed attorney in California since 1990. Her expertise is legal research and writing.

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Small businesses face many of the same types of regulations that larger businesses face. It can be daunting to start a small business. And yet small businesses comprise a large piece of the financial pie, often employing workers in the community and adding to the sense of community in urban and suburban areas.

There are a multitude of regulations that may apply to your small business. It is important to understand that regulations exist at multiple levels: city or municipal, county, state and federal regulations may all apply to your business depending upon the type of business and the number of employees that you may have.

There are a number of basic areas of inquiry that a small business owner should look at.


Licensing can be thought of as broken down into two separate areas: professional and local. Professional licensing pertains to state regulations that govern the standardization and professional requirements among certain professions. Chief among these are professions such as doctors, lawyers, nurses and other medical professionals, mental health professionals such as marriage and family therapists and psychologists, cosmetologists and the like. These professionals must all meet standard levels of competence and expertise within their particular professions. State licensing boards run and monitor licensing and continuing education within these types of professions. Every state has a website that allows you to look up the status of professionals . These boards are also responsible for disciplining these professionals.

Most cities require that all small businesses obtain a license to run their business within city limits. While this is primarily an income generating tool for municipalities, the penalty for failing to obtain a city business license can be quite steep depending upon the municipality. Check your city's requirements and license accordingly.

Environment and Labor

Not every business runs into environmental issues. Certain smaller businesses, such as cosmetologists and garage mechanics however, may have city, county, state, and federal requirements for the handling and elimination of certain chemical and hazardous materials. For example, the dumping of oil from cars is illegal in most jurisdictions. It must be recycled at a certified center. Much of this information can be obtained on federal and state governmental websites. If you are in doubt, it is best to check first.

Many small businesses are run by a sole proprietor and have no employees. However, when you do have employees, You must be very careful to ensure that your business meets all the criteria for the management of finances for your employees. Taxes and other funds need to be withheld and paid on behalf of your employees. A Certified Public Accountant is a wise investment for any small business owner with one or more employees.

The U.S. Department of Labor and state law govern the handling of your most employee matters. The U.S. Department of Labor’s FirstStep Employment Law Advisor can help an employer determine which Federal employment laws apply to their particular business. Also remember to check your state's department of labor website. All states have them and they contain invaluable information regarding permits, licensing, workers compensation and wage information.

In addition, under the Occupational Safety and Health Act (OSHA), all employers are required to provide a safe place to work, governed by the U.S. Department of Labor (DOL) and state regulations. These regulations can vary quite a bit across industries. The DOL issues guides to help small businesses to determine which regulations might apply. States also regulate this area, such as California’s Cal/OSHA. Every state handles worker safety differently, and every state has that information readily available on government websites.


Increasingly, small business owners collect sensitive information from consumers and employees as a matter of course. If your business does collect sensitive information, your business may be legally obligated to take steps to protect and to dispose of that information so as not to cause harm to those from whom the information was collected. The Federal Trade Commission governs this area of law. This is a growing area of concern for many companies and even small business owners must employ some form of privacy policy to protect consumers and employees.


The Federal Trade Commission and state law govern the area of advertising. The FTC issues industry guides for selected industries. In addition, every state has a "truth in advertising" set of laws and state government websites display this information as well as how and where consumers may file complaints about business advertising. In addition, many professions such as lawyers, psychologists and the like, have rules regarding how their licensees may advertise their services.


There are many sources available to the small business, most of them available online. Take time to plan, research, and ask questions. And remember, there is a solution for almost every business need once that need is identified.


U.S. Small Business Administration, Small Business Size Regulations

U.S. Small Business Administration, Advertising & Marketing Law

Federal Trade Commission, Selected Industries,

United States, Department of Labor, FirstStep Employment Law Advisor,

Federal Trade Commission, Guide to Antitrust Laws,

Securities and Exchange Commission, Information for Small Businesses,

U.S. Small Business Administration, Finance Law,

Privacy Policy,

Privacy Policy,



© 2017 Audrey Howitt


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    • AudreyHowitt profile image

      Audrey Howitt 10 months ago from California

      Thank you Manatita!

    • AudreyHowitt profile image

      Audrey Howitt 10 months ago from California

      Thank you Mike!

    • mckbirdbks profile image

      mckbirdbks 10 months ago from Emerald Wells, Just off the crossroads,Texas

      Hi Audrey - Great advice for those just starting out on their road to financial success.

    • AudreyHowitt profile image

      Audrey Howitt 10 months ago from California

      Thank you Dora!

    • manatita44 profile image

      manatita44 11 months ago from london

      An interesting change. Small businesses tend to suffer. The big boys can be bullies, if necessary, and the successful smaller man has to be very astute. Nice write.

    • AudreyHowitt profile image

      Audrey Howitt 11 months ago from California

      Hi Ruby--thank you for stopping by--and thank you for your kind words-

    • always exploring profile image

      Ruby Jean Fuller 11 months ago from Southern Illinois

      I do not own a small business, but learning the necessary fundamentals is a good thing. Thank you for sharing your knowledge with us....

    • MsDora profile image

      Dora Weithers 11 months ago from The Caribbean

      Thanks for such great information for potential as well as existing small business owners. So often they get into trouble for something they did not know. Facts about environment and labor may be among the instructions not followed regularly. Very useful!

    • AudreyHowitt profile image

      Audrey Howitt 11 months ago from California

      Thank you Bill and thank you Heidi! Privacy concerns are a particular problem in small businesses I think--thank you for your kind words

    • heidithorne profile image

      Heidi Thorne 11 months ago from Chicago Area

      Thank you for spreading the word! I can't believe how many small businesses think they are immune to the law because they are small. So wrong! They are subject to regulations just like the big multinational corporations. And with the advent of the Internet, it's just getting worse, especially for issues such as privacy. Great read!

    • billybuc profile image

      Bill Holland 11 months ago from Olympia, WA

      Bev and I have two small businesses, and your suggestions/advice is right on, my friend. This is a great crash course for anyone considering starting a small business.

    • AudreyHowitt profile image

      Audrey Howitt 11 months ago from California

      Thank you Martie--Thank you Flourish--I am hoping to turn these into a series if they are well-received

    • FlourishAnyway profile image

      FlourishAnyway 11 months ago from USA

      There are so many areas of the law that small business owners need to comply with that it's a good reason to consult experts like yourself.

    • MartieCoetser profile image

      Martie Coetser 11 months ago from South Africa

      This article aroused memories of the time when I had a couple of small businesses. It's important to know all the things that have to be put in place before business can begin.