Small business compliance requirements are a big deal. If you fail to comply, you could owe the government money, you could get sued, or you business could be shut down. Put simply, you should understand what the requirements are for a small business and the types of business compliance you should adhere to.
If you don’t, you could be in big trouble…in more ways than one.
Take this seriously. Do your due diligence and dig into small business compliance requirements in your area.
So…the big question here…
What is small business compliance?
Basically, these are the things that you need to do to comply with state and federal law.
Like we said in the intro. It’s a big deal and you shouldn’t ignore it.
What Are Requirements For Small Businesses?
The next questions of course are, “What are the requirements for small business?”, “What types of business compliance items are there?”
I looked around at the SBA.gov site.
The main small business compliance items are:
- filing paperwork, and
- paying taxes with state or federal governments
Beyond this, there are internal controls that may be required.
Other small business compliance items noted were:
- shareholder meetings
- recording meeting minutes
- have an operating agreement
- hold annual meetings
Each business is different and each one will have a list of “must-haves” when it comes to compliance.
Want to know more about business compliance? Or more about each of these types of business compliance? Keep on reading!
Small Business Compliance Requirements – Issues You MUST Understand!
If you run a business, this might be your main question — “What are requirements for small business?”
You’ll need to make sure that you understand the laws and regulations that apply to you. Failing to understand key compliance issues could land you in trouble later down the line.
To help you along the way, here are a few of the key regulations that you should be aware of – as well as a little commentary around each.
The GDPR refers to a data and privacy law, the law requires businesses to keep customer data safe. At the same time, the GDPR allows individuals to control the way that companies use their data. Unless businesses comply with the GDPR they risk facing hefty fines.
To ensure compliance businesses must carry out an info audit, (to check if they are using personal data from the EU). If businesses are processing data from EU website visitors, these businesses need to tell these customers why the data is being processed. Companies need to assess all data processing to offer enhanced protection.
Businesses can support these processes by hiring a data officer.
One of the main types of business compliance is tax compliance. Tax compliance means adhering to the tax rules and regulations, set out by taxing authorities and the government.
Businesses need to keep records of their accounts and ensure that they pay income tax by the appropriate tax deadline.
Companies may also need to pay:
- Taxes for payroll and employment
- Tax on real estate assets or property
- Tax on any merchandise sold in certain states
- Dividends offered to shareholders are also taxable
The best thing to do is to work with a business tax advisor. Professional services like these can support you to meet key compliance and deadlines. For more information, take a look at tk.cpa.
The government often requires all businesses to have…
- worker’s compensation insurance,
- disability insurance, and
- unemployment insurance.
If an employee gets injured or becomes sick, worker’s compensation insurance is used to cover lost wages or medical expenses.
It’s also advisable for companies to get public liability insurance. This insurance covers a business if a member of the public attempts to sue. Circumstances might include if a member of the public is injured (and your company is at fault) or if someone’s property is damaged.
Here’s another one of the major types of business compliance that you need to be aware of.
According to the SBA, there are several state filing requirements that businesses need to understand. Your filing requirements each year will depend on the structure of your company, and the state you operate in.
These general business requirements are a great starting point:
- Businesses need to file a biennial statement or annual report ( this counts for most states)
- Companies are usually required to pay a fee when they file their biennial or annual reports
- Certain LLCs or corporations need to pay a franchise tax
- If you make changes to your company, for example, membership or a name change, you’ll need to file an ‘article of amendment’
Small Business Compliance Requirements – Are You Covered?
Understanding small business compliance requirements and issues will help you to protect your assets and your future.
If you’re having trouble understanding any key compliance issues, it’s best to seek expert support. The last thing you want is to end up with expensive fines!
Finding the knowledge you need will help you to keep everything above board. Following key regulations can help you to avoid setbacks and increase productivity in the long run.
Are you up to speed on all of these small business compliance requirements? Or do you have some work to do now?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.