As a small business owner, you’re familiar with the challenge of keeping track of legal requirements for your business. You may have started by getting a business license, only to find out the slew of technicalities required to stay compliant is never-ending.
To avoid getting sideswiped by an unexpected requirement. stay up-to-date with the technicalities listed below.
1. Maintain the strictest data privacy requirements possible
Trying to stay on top of local and state data privacy laws has become impossible. Laws change fast; it’s impossible to expect anyone to reasonably stay caught up with the details. You could be compliant today, yet when a new law goes into effect tomorrow, overnight you could become non-compliant.
Data privacy laws are complex and it’s not always because of the specific requirements. Today’s data privacy laws are applicable across national borders.
Everyone in the world is required to abide by a state or country’s data privacy laws if they handle the personal data of residents. For example, the EU passed the General Data Protection Regulation (GDPR) and as of 2018, every business in the world is required to comply if they handle just one EU citizen’s data.
How would a business know if they’re handling an EU citizen’s data? It’s nearly impossible to know. That’s why all businesses need to maintain the strictest data privacy standards possible. A business with 30,000 email subscribers is bound to have at least one EU citizen on that list, but businesses can’t take a chance. Every business across the world must act as if they are handling the data of an EU citizen.
The penalties for a data breach under any regulation are steep. Go to every extent possible to protect the data you handle so that breaches are thwarted and stolen data is encrypted and, therefore, useless.
2. General liability insurance
Getting business insurance is a wise move. There are many situations that can put you into a financial hole if you’re caught uninsured. For example, if someone slips and falls on your premises, they’ll likely sue you for their injuries. If you’re found to be negligent, you will be required to pay for their current and ongoing medical expenses along with legal fees incurred during the lawsuit.
Another reason to get small business insurance is to cover your legal fees in case you’re sued for something like trademark infringement or a defective product. Lawsuits are expensive, especially ones heard in federal court. You don’t want to pay out of pocket to defend yourself and you definitely don’t want to represent yourself in court.
Business insurance also covers property damage, which is something every business owner is susceptible to experiencing. Property damage can be accidental or intentional, but either way, a business insurance policy will pay for repairs.
While it’s true that your policy rates may rise after you have to make a claim, it’s worth the extra cost. At any point in time, if you get hit with a million-dollar lawsuit, you could lose your business.
3. Form an official business entity
In some U.S. states, you don’t need to form an official business entity to operate, but it’s a technicality you’ll regret not pursuing. The main reason business owners form entities like an S-Corporation, C-Corporation, or Limited Liability Company (LLC) is to protect their personal assets from being grabbed in a lawsuit.
Another reason to form an official entity is to make your business more official in the eyes of your customers. Not everyone will care that you have “LLC” at the end of your business name, but for many, it’s a sign that you’re serious about your business. When customers know your business is official, they’re more likely to trust your brand and try you out if they’ve never heard of you before.
4. Keep a record of all licenses obtained
Keep an organized index of all licenses obtained in the course of doing business. You might be required to produce your license later on someday. For example, you’re probably going to download a bunch of stock photos over the years. Each time you buy a stock photo, you receive a license to use that photo. While these licenses will be available in your online account, always print them out and save them in physical form.
If the copyright owner sees their stock photo in use, they may contact you to find out if you have a license. Having a copy on hand makes it easy to send them your license for verification.
The other reason to keep stock media licenses on hand in printed format is in case you end up in court over an alleged copyright violation. Hopefully that won’t happen, but if it does, you’ll already have an organized binder full of licenses to bring with you to court.
With copies on hand, you won’t have to waste your time scrambling to print all of your licenses obtained from multiple websites. You also won’t have to worry about forgetting your username and password or forgetting where you bought the license in the first place.
5. A printed record of receipts
Almost everything is stored on the computer today, but it’s still a good idea to have printed copies of certain kinds of information. Receipts are included in that exception.
If your receipts are stored in a cloud service provider’s account, that’s great for easy access but not so great when you need to hand over your receipts to your tax preparer. Most cloud services make it easy to print a record of your receipts and you should take full advantage of that on a monthly or weekly basis.
When storing printed records of receipts, make sure your records include a description of what was purchased in case the line item isn’t legible or the description doesn’t make it easy to remember the item.
Taxes are the main reason you’ll need to keep receipt records, and having a printed collection of receipts organized by month and year will help you find a receipt under any circumstances. For example, what if you need to find a receipt immediately, but you forgot your login information? Or the power goes out? Or your internet is down? What if you lose your phone and that’s the only way you access your account?
You may never need to access your stash of printed receipts, but if you encounter a situation where you need fast access, you’ll be glad you printed them out.
7. A visible ‘unsubscribe’ link in your emails
Like privacy policies, having a clear unsubscribe link in all of your emails is required by law. All businesses and individuals with an email list must provide an easy way for subscribers to unsubscribe.
Most businesses place an unsubscribe link in the footer of every email. This placement has become the standard and is what people expect. Some people place their unsubscribe link in the footer of their emails, but reword the link so it’s not easy to find. For example, some businesses provide a link with anchor text that reads, “change your email preferences.” This is still legal, but it’s harder for people to find since most people specifically look for the word ‘unsubscribe.’
Make sure your unsubscribe link goes to a page that actually unsubscribes people from your list. Don’t try to re-segment those people and trick them into getting onto another email list by spoofing an unsubscribe form. This is an old marketing trick that only causes harm. If someone wants to unsubscribe from your list, let them. They aren’t your audience.
Stay on top of new laws in your industry
While these legal technicalities apply across the board, make sure you stay up-to-date with new laws and regulations in your industry. Don’t leave legal compliance up to chance. If you can’t easily find sources for legal changes in your industry, find an attorney you can pay to provide you with regular updates.
The post Small Businesses Need These 7 Legal Technicalities to Thrive appeared first on ReadWrite.