Things you need to know about the law and running a business

Now, being your own boss involves learning a lot about being a boss, and learning it properly. To be in business means you're covered by laws. Depending on the kind of business, it can be a lot of laws.

This can be maddening, if you're starting from scratch. Even opening a shop involves a lot of different things, as far as the law is concerned. Some professions legally require formal qualifications, licenses, and regular compliance with a lot of laws. You can't do business at all, without these things.

First and unavoidable: Taxes.

Tax law, anywhere, is the big one. Every country on Earth has tax laws, usually more than anyone likes.

There's only one basic rule about taxes: Get them right.

Tax laws all have some thing in common, whatever you do as a business: You must keep proper records for your business. Every cent that comes in or goes out is relevant. It's manageable, when you understand it.

IMPORTANT: It's fine to have an accountant doing your tax. In fact you should have one, but make sure you understand your tax obligations and accounts yourself. If you have any experience using personal tax prep software, then you know how tedious taxes can be. It's your business, you're responsible if anything goes wrong.

You're also strongly advised not even to think about avoiding taxes.

It's not that easy, most people do get caught, and it can cost you everything, quite literally.

Some people, by supposedly avoiding taxes, have created tax liabilities for themselves of millions. It's not clever, it's stupid, and usually expensive.

You're liable for taxes, but you can claim deductions and expenses incurred in operating your business. That reduces the amount of taxable income, and there's quite legal ways of not paying any more tax than you actually have to. You can just ring the tax office and ask if you can claim on things. You're also more likely to get an honest answer from someone who doesn't get paid to 'find' things to claim on your tax. As your own boss, you can choose where your information comes from, and it's a big advantage.

ALWAYS REMEMBER: You are the boss. If it's anything to do with your business, you need to know about it.

Goods and services/ value added taxes: These are taxes gathered by business on behalf of the revenue system. They look complex, but they're really pretty easy to handle, you can learn the basics in an hour. You can also find out how you can get tax credits for things you buy which are subject to these taxes.

Any question you have about taxes, get an answer you can trust.

The law is that you're liable for payment of taxes.

Whatever business you're in, whatever profession, if someone says you don't have to pay tax, they're wrong, unless there's a law somewhere actually saying that in so many words.

This is one of the really big deals about being your own boss. If there's a problem with the law, it's your problem. With taxes, the buck really does stop with you.

NOTE: It's also one of the great advantages of being your own boss that you can tell people who are giving you bad information where to go.

You're in control. Keep it that way.

Check out everything, thoroughly.


All businesses are subject to regulations and laws. The bottom line is if you don't obey those laws, you're out of business.


Some professions and trades require formal qualifications.

To even call yourself a lawyer, or claim to be giving legal advice, in most places on Earth, you need legal qualifications. It's illegal if you aren't qualified.

Doctors, dentists, vets, electricians, plumbers, financial advisors, you name it, the expectation is that they're supposed to be qualified, and the laws of most countries require that.

It makes sense. An unqualified person could do real damage in those professions. The qualifications are a sort of protection for the public.

So you can't operate a business in those professions without those qualifications, either.

This can get tricky.

In some professions, you may have the basic qualifications, but to offer some services in your business, you need additional qualifications approved by the government. Working in other countries, you may need to meet their qualifications criteria, even if you're already qualified at home.


Tradespeople, many service providers, like restaurants, wholesalers, importers, exporters, usually require licenses.

Licenses fall into several categories:

These are usually local government licenses:

  • Licenses for shops and places of business.
  • Licenses for a particular form of business activity, like factories.
  • Licenses to operate services to the public, like tour operators, food shops, transport, etc.
  • License to keep animals
  • Agricultural licenses

Some licenses relate to use of materials. They can be based on state, national or Federal laws, or part of an economic treaty, like the European Union:

Hazardous chemicals, explosives, flammable materials, poisons, pharmaceuticals, etc.

Which means our example of a pet shop would involve at the very least a shop license, and a license to keep animals on the premises. The local government would want to be sure the owner could keep his shop sanitary, and comply with animal care laws.

The shop owner has to comply with these laws, or can't do business at all. You can see why. A shop full of sick animals isn't exactly a great business, either.

The law isn't the enemy. It simply requires an acceptable level of professional competence to be shown by the businesses.


Regulation really means enforcement of laws. Businesses are required to provide regular information to the government.

Some of this is public information regarding your business. Your various licenses and other information, like a record of who owns the business, whether you're a sole trader or a company, etc, are all available to the public.

The information required isn't sensitive, or invasive of privacy, but it means that people can check up on who they're doing business with, and that you're who you say you are, and are a legitimate business. Someone who checks the public information and finds out you really are your own boss will be reassured.

(If you were about to enter into a contract with someone, you'd probably want to know that you're doing business with a legitimate business operator. A lot of fraud can be avoided. Some internet scams are so lazy that they even claim to be companies which aren't even doing business in the country where they claim to be operating)

Another form of regulation is government-based. If someone complains about a business, it's the government's responsibility, by law, to check it out, if it's in the public interest. This applies to all forms of business, at some level.

A shop selling food that makes people sick is a case in point. The law allows the government, usually local government, to make a decision to revoke the shop's license, if they think it's required. They'll send an inspector, check out the business, and the decision is made. They may alternatively order the shop to comply with health regulations, and fine it, rather than shut it down.

Zoning and Land Use

Being your own boss means knowing your business, and all the laws. Businesses can't just set up shop anywhere. Generally speaking, local government planning creates zones for residential, environmental, business and industrial activity.

To get approval to open a business, you need to be operating a business which meets zoning requirements.

You may even have to put in a development application to build or renovate premises for your business, even if the zoning's OK.

This is partly for reasons of keeping local development organized and properly regulated, and also for reasons of environmental and public safety.

A business premises has to be approved before it can operate in a location. (Which is one of the reasons you see businesses like restaurants opening where other restaurants have previously operated. Zoning completely controls commercial land use.)

That can mean quite a lot of requirements being placed on the business.

Say you're a manufacturer, making fire lighters.

The local authority, for some reason, want you to install sprinklers and fire alarms. They also want you to build your factory out of non-flammable materials, before they grant you the factory license.

Alternatively, they can point out that the zoning of the area is residential, or for shops, or in the middle of a wetland, so you can't put a factory there.

You see the point. It's basic common sense to organize business districts. Things like shopping malls generate a lot of traffic, causing massive costs to the local budget, trying to provide roads, parking, amenities for millions of shoppers, etc. In many cases, developers have to provide things like that, before they can build shopping malls.


  • Qualifications?
  • License?
  • Tax requirements?
  • Regulations?
  • Zoning?
  • Development application required?

This is all basic information, a very broad overview of fundamental legal requirements.

It's impossible to tell people exactly what they will need for all of these things, but we can promise you that you'll have to do all of them. That's what makes you your own boss.

  • Learn the laws regarding your business.
  • Keep proper business records.
  • Get your taxes right.
  • Check out any legal or regulatory requirements, personally. Make sure you know and understand what's required.

The law is on your side. Don't break it, and it won't break you.