Businesses must comply with multiple layers of government regulations on the federal, state, county, and local level. It is important that businesses are aware of all of the different laws and ordinances they must comply with. These regulations deal with topics ranging from health and safety standards to specific regulations only applicable to certain industries. Sometimes, the different levels of oversight may overlap and it’s unclear which regulations apply. Working with attorneys experienced in business compliance will give business owners peace of mind and ensure your business is complying with all relevant regulations.
One of the first steps in starting a business is choosing a business structure. When a business officially becomes a “legal entity,” it gains the ability to own property, hold bank accounts, and pay taxes similar to an individual. The specific needs of your business will typically dictate the choice of entity for your business. The business entity chosen also impacts the way the business is taxed, the relationship between owners, and legal liability. Examples of different business entities include: General Partnerships; Limited Liability Partnerships; Limited Partnerships; Limited Liability Companies; Corporations; and S-Corporations. Different entity types will have different compliance steps, including different licensing and regulatory requirements. These requirements will also vary between different jurisdictions.
One of the first compliance steps is to register your name and business, as well as any trademarks. Additionally, a business will need to get a tax identification number and any applicable permits and professional licenses. The permits and licenses required will vary by jurisdiction, as well as the practice area of your business. For example, Virginia doesn’t require a general business license for all business, but does regulate certain occupations and professions through licensing boards. If your Virginia business is involved in an occupation covered by a licensing board, all licenses and certifications must be completed prior to opening the business. Licenses may also require renewal, so it’s important to keep track of any required annual filings and filing deadlines. However, in Maryland, almost all businesses need a business license issued by the Clerks of the Circuit Court. Similarly, in D.C., a Basic Business License is required for many business activities, such as the operation of restaurants, convenience and retail stores, consulting firms, home improvement businesses, and many more business activities.
Businesses may also need to consider bonding requirements. Surety bonds can protect against claims of incomplete or unsatisfactory work, failure to comply with laws and regulations, and allegations of fraud and theft. Bond requirements differ by jurisdiction, but are used in a variety of industries, including construction. Surety bonds can also help small businesses win contracts since they provide the customer with a guarantee that the work will be completed. Many public and private contracts will require surety bonds. Often the surety bond process will start when a contract specifically requires that the business doing the work is properly bonded. The business will work with an authorized surety company, which will provide surety bonds to businesses that meet their set qualifications. The Small Business Administration guarantees surety bonds for private surety companies which allows more small businesses to qualify for bonds and get work that requires the business to be bonded.
Running a business is hard enough without having to factor in compliance matters. Failure to comply with required government regulations can have serious consequences for businesses, from fines to losing licenses or permits. To ensure your business takes all the required steps when first forming your business and continues to provide required annual filings, consult a Business Law attorney who is experienced and knowledgeable about the local requirements. Attorneys at General Counsel, P.C. have experience working with business owners across Virginia, Maryland, and D.C. and can help your business comply with the relevant regulations.