Being a small business owner and mom can be a daunting task to say the least. Many parts of running my business are exciting and fun and other parts I’d rather not deal with. A good friend of mine recently went through a legal battle over a copyright infringement and lost the case and this costs her quite a bit, emotionally and financially. It has motivated me to remind myself of the common laws that get violated by small businesses. Just as a disclaimer, I am by no means an attorney or a legal expert, so I always recommend seeking expert advice on legal issues. However, if you are going to run a business, I think you should have some foundational knowledge of the basics just to keep yourself out of trouble and be proactive about this part of your business.
So use five minutes and read the following because as we all know, as a Mom we can do just about anything in five minutes.
I have found the best place to go for small business information is the SBA.gov. The U.S. Small Business Administration offers a bounty of resources for women business owners. In fact there’s so much information on their site, the only way you would have time to read all of it is if it was a hot, juicy fiction novel that all your girlfriends are raving about. Below are five laws that could affect you, but of course, there are many more.
1. Online Business Law
Do you need to collect sales taxes when selling online? This can be confusing indeed. The simple answer is “yes” if you are a brick and mortar who also sells online.
- As a rule of thumb, if you have a brick and mortar building, meaning a physical presence, in a state, then you must charge applicable state and local sales taxes if you are selling online. It’s a referred to as a “nexus”, so if you have a nexus in a state then you are required to charge sales tax.
- No physical presence? No sales tax. The end.
Success Story! Woman-Owned Online Retail Business – OOVOO Designs: Find out how one woman turned her education at an introductory business startup class into a full-fledged online business. She was able to go to Vietnam where she was inspired for what is now her online retail boutique.
2. Digital Millennium Copyright Act (DMCA)
This one is a mouthful and even more difficult to understand. The DMCA protects digital works, like text, music, movies and art. The simplest explanation is that it protects you from copyright infringement.
What do you do in a case like this? You contact the hosting provider of the site.
Why? Because the DMCA requires a hosting provider to take down the infringing information.
However, this law can be abused by taking down information that people just don’t want up. Take for example the following misuse and abuse of power by none other than Rush Limbaugh:
Rush Limbaugh Tries to Silence Critics
How does this apply to your business? Just make sure that whatever you have on your website is your own work and if it isn’t that you have permission from the owner to use it on your website.
3. Antitrust Law
This falls under fair business practices when it comes to your competitors. The simple explanation? I’ll answer it with one question (I hope that doesn’t confuse you).
Did you know that just discussing prices with your competitors could be possibly misconstrued as a violation of antitrust laws? Even if it affects a small marketplace? Okay I answered it with two questions, and you see the oxymoron involved here right?
Anyway, bottom line, be fair and you won’t be violating the law.
Did you know that there is a Bureau of Competition? Neither did I. It is a department of the FTC and assists businesses in navigating the choppy antitrust waters. Click on the link above to access their pamphlet that describes what they do.
4. Privacy Law
Although it is not required by law, it is becoming commonplace as well as seen as a best practice, to have a privacy policy online about how your business is going to protect your customer’s privacy.
If you do have an online privacy policy, you must ensure you implement it correctly or end up with costly legal fees. In addition you are more likely to get consumers to want to buy from you if you have a privacy policy regarding how you are protecting their private information.
Don’t know how to write a privacy policy? There are many excellent examples online for all sorts of online policies for your website. For a reputable up-to-date policy the American Advertising Association has sample ones you can use to make your own.
Download a copy of the FTC’s latest recommendations concerning Privacy Laws: Federal Trade Commission Recommendations April 18, 2012
Interested in learning how Google is violating the European Union’s Privacy Laws with Google’s latest changes to its privacy policy?
5. Advertising Law
For the most part this is a simple one: it’s called truth-in-advertising. If you make a claim about a product or service you are offering, you better make sure you have evidence to back it up; or you could face severe penalties and civil action against you and your business.
Also, know that if you describe your product on the packaging this is considered advertising as well, so be careful how you list it. As long as you are being truthful then no worries.
Latest updates that could affect your business: A recent court case involving Rosetta stone and Google could cause trouble for online retailers as it relates to Google’s platform of 3rd party advertising. To find out more click here: Rosetta Stone v. Google and here Unfortunate: Appeals Court Revives Misguided Rosetta Stone Lawsuit against Google
Interested in knowing why Urban Outfitters is being sued by a model who claimed they didn’t have the right to use her “salacious” image on t-shirts sold in their stores?
So there you have it, five useful laws that you are now up-to-date on that could affect your business. Now, if only you had five seconds to spare to clean your house.
Need Expert Advice? Here are a few places to consider using:
Useful Links
Bureau of Consumer Protection Business Center
Everything You Need to Know About the DMCA
United States Chamber of Commerce
United States Department of Labor: eLaws Employment Law Assistance for Workers and Small Business
Women’s Business Development Center
