Starting a new business is a daunting experience, especially when it comes to regulations in business setups. It is imperative that any business owner ensures compliance, risk management and best practices in various business aspects. There are quite many government regulations new business owners often remain unmindful of. This ignorance subsequently leads to legal complications along the path to success.
In order to narrow things down, here is a list of five important business regulations which must always be part of best practice.
1. Registered Business Name: Ideally one would want to have a business that suits the form of business and the owner. However, often the names we have may have been taken. It is recommended to have at least three different names in mind. When you approach the business registration department, at least one of the three you want will be available.
Registering a business is very important in order to pronounce ownership of a business. Whatever transactions, bills and other fees the business attracts must be forwarded to the owner. Therefore, registering a business with a unique name is a very important best practice. For example, if two businesses have the same name, this can be a bad thing. Imagine being sued for another company’s illegal activities because you have the same name. This will ruin your business reputation and affect your customer relations as well.
2. Seller’s Permit: There are state regulations which require businesses and individuals to a “Seller’s Permit”. This permit is important because it serves as a grant of permission for a business to sell or lease merchandise and goods. One can sell these items as a retailer or wholesaler. To ensure best practices through compliance with regulations a withstanding business requires a regular Seller’s Permit. On the other hand, seasonal businesses may apply for a temporary permit which lasts for ninety days.
3. Tax Clearance: Ensuring that a business or individual is complying with the state tax laws is a crucial best practice. Financial records of a business are reviewed to confirm a business pays taxes without any lapses. Owners of businesses must take these laws seriously. Obtaining a Tax Clearance is proof that owners are complying with business regulations and paying tax appropriately.
There are certain circumstances under which a business is required by law to file their tax returns on time. Having a tax clearance comes in handy under such circumstances. Not having a clearance has serious implications and you may lose your business for being careless about best practices. Similarly, if a business firm has employees which prefer the firm to withhold taxes, having a tax clearance is recommended. You will only need to submit a financial report accurately at the right time.
4. Surety Bonds: When two business firms or individuals have an agreement and one party fails to meet its obligations, the other party must be compensated. In this case a Surety bond protects the first party against losses because of failure to fulfill its obligation. It is a best practice to obtain a surety bond for all businesses. A surety bond also ensures that any business will comply with licensing and industry regulations.
5. Partnership Regulations: When an individual or a firm decides to go into partnership with a friend or another firm, there are certain best practices required. These requirements depend on whether it is a limited partnership or a limited liability partnership. There are a lot of benefits of partnerships in business and assists in risk management as well by reducing losses.
These five important business regulations are an essential part of best practices. Compliance with these and other business regulations will ensure risk management and success.