5 laws every business owner can’t afford to ignore
Whether you are starting out or have been operating a business for years, it’s always good to familiarise yourself with the laws that affect your business.
Whether it’s regulation specific to geographic location of your business (provincial or local by‑laws) or laws that regulate your industry (Consumer Protection Act 68 of 2008) – it is essential that you do your research or consult a professional – non-compliance could lead to penalties.
Here are 5 types of laws that every business owner should be familiar with:
1. Entity Regulatory Laws
Depending on the type entity you elect for your business, relevant statute will apply, such as the Companies Act No 71 of 2008 or the Close Corporation Act 69 of 1984.
Each act regulating entities requires compliance and provides rules on the powers and limitations of the entity and its various stakeholders. Examples include financial reporting obligations or dealing with entity securities or fiduciary duties of directors or members.
2. Employment and labour Laws
Employment and labour laws regulate and organise the relationship between employer, employees and other stakeholders. There over a dozen laws that relate to labour matters from the Constitution Act 108 of 1996 to the Skills Development Act 97 1998.
It is a big task to know all laws that apply, however at the very least know what applies to you and your business.
The Basic Conditions of Employment Act 75 of 1997 which mainly deals with, but is not limited to, contracts of employment; regulation of working hours; remuneration; procedural fairness; dismissals and resignations and the notices. All these aspects are important for the continuous operation of business
3. Private property laws
An important aspect of your business is to protect ownership of your property, this includes registering ownership of property, plant and equipment or intellectual property rights. The Intellectual Property Laws Amendment Act, No 38 of 1997 which offers protection to the business owner for production of work done by the employees while under the business owner’s employ. The legal protection of intellectual property ensures that exclusive rights are captured and protected against exploitation by powerful corporations or individuals.
“Simply put, know your laws. Know your rights and obligations.”
4. Consumer Protection Laws
Your business may be required to comply as a supplier or is offered protection as a consumer – either way consumer protection laws apply to you and your business. The Consumer Protection Act, No 68 of 2008 regulates such a relationship between the business owner and the consumer.
The Act establishes the national norms and standards relating to consumer protection and business practices relating to products and services, such as quality, fair pricing, dealing with returns and refunds, and complaints process and remedies.
5. Tax Related Laws
Most business owners are united in their feeling about SARS, in the contrary, if you are paying tax then you are making money. Tax laws are numerous, from VAT Act 89 of 199 to the Securities Transfer Tax Act 25 of 2007, which may also include industry specific tax laws.
The most comprehensive and relevant to most businesses is the Income Tax Act no 58 of 1962.This Act regulates and taxes all and any form of income, be it personal or business. Differing tax rates apply to micro, small, medium and large businesses – at the very least business owners are encouraged to get their hands on the annual tax guides issued by SARS and many financial institutions.
Simply put, know your laws. Know your rights and obligations. In this way you mitigate risk to yourself, your business, your employees and your customers. If done well, it helps to improve business performance and ensure financial success.
About the author: Monisha Prem (BA MBA) is the CEO and senior legal practitioner at Excelsur Legal Services. Monisha is an admitted attorney with over 10 years post-article experience in law.