Many people, including some leading business representatives, argue that small firms are over burdened by the weight of business law they must comply with and that many owner-managers struggle to keep pace with an ever changing and growing mountain of legislation.
Does business law help or hinder small firms?
Estimates vary, but some say dealing with 'red-tape' takes up an average of two weeks of a small-business owner's time during an average year.
But as well as giving business managers more work to do, the cost implications of complying with business laws and regulation can be considerable, especially where significant legal changes are introduced. Potentially, there are also fines for firms that fail to live by the letter of the law – however unintentional the transgression.
But should business law be viewed simply as something that restricts the freedom and prosperity of businesses?
Business laws can protect your business
While it seems much legislation has been created by those with no experience of running a small business, there are many laws that protect owners' interests.
Such legislation is designed to stop businesses from being harmed by the illegal acts by competitors, customers, suppliers, employees and even government.
And although opinions will always differ over what is fair and unjust, few would deny that the law has an important responsibility to protect the health and safety of employees, the public and the environment from the worst excesses of business.
Complying with business law
New and amended regulations usually come into force on the Common Commencement Dates of April 6 and October 1. However, the Government has recognised the burden that regulations impose on small businesses. The 2011 moratorium on new business regulation has been replaced by the Small and Micro Business Assessment. It assesses all new, proposed regulations and if they are found to have a disproportionate impact on small and micro businesses, they will only be passed if small and micro businesses are exempted. Businesses with up to 50 employees qualify for the exemption (previously up to ten employees).
Complying with every rule and regulation might seem intimidating if you're about to start up a new business. However, many people find it painless enough - but much will depend on the nature of your venture. For obvious reasons, some types of business and sectors are more heavily regulated than others.
The information on this website is intended purely as an overview of key laws that apply to small firms. If ever in any doubt – seek professional legal advice.
But for starters, you can find out about: licences and registrations you might need; laws covering how to protect yourself, your staff and customers; making sure your business is insured (including instances when insurance is compulsory) and, of course, the health, safety and environmental regulatory regime. You must not discriminate against people with disabilities who use your goods or services, work for you or apply to work for you.
You'll also need to know about intellectual property (IP), which includes protecting copyright, trade marks or designs – and ensuring you're respecting other businesses' rights. There are even legal restrictions about naming a business.
If you retain hard copy or electronic information/data about employees, customers or suppliers, you must have their consent and only use it for the purpose for which it was obtained. To comply with the Data Protection Act, the information must be accurate, current, kept securely and should only be held as long as necessary. Learn more on the Information Commissioner's website.
And if you want to know more about what you're legally obliged to do when you take on staff, including contracts and other employment regulations, have a look at our Employment section.
If you're about to start up, it's a really good idea to read through our employment law resources to make sure you're aware of what will apply to you – now and as your business grows.
Alternatively, try the Acas website, your trade association (find contact details on the Trade Association Forum website) or local Enterprise Agency (find it on the National Enterprise Network website).
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