Almost every person or business is regulated by the government in some manner. For instance, in order to drive, one must obtain a driver’s license and register their car. Professionals such as attorneys, real estate agents, accountants or mortgage brokers must obtain specialized licences from the state. Businesses in specialty industries – such as gaming and now, medical marijuana – have a much more in-depth and complicated regulatory process.
Generalizing, unless the business is a non-profit, one of a business owner’s primary goals is to make money. Considering all that it takes to keep a business going on a day-to-day basis, it can be easy to lose track of city, county and state regulatory requirements. However, failing to stay current and knowledgeable with respect to your industry’s regulatory requirements will almost certainly cost something.
It sounds very simple – just make sure your business is always in compliance with the required laws and regulations. Yet, each year, many business owners forget to file required updates or payments or fail to stay current on regulatory changes.
This is mostly an issue related to business with a small number of employees – larger companies usually have compliance departments to handle these issues. For small business owners, the task can be onerous; however, regulatory penalties and fines can eat into hard-earned profits.
Here are five easy ways to keep your business out of regulatory hot water.
Know the law
Knowing the law is crucial. Without regulatory compliance, your business is not operating legally. Many small business owners do not have much assistance in staying on top of regulations related to their industry and must assume this responsibility in addition to their many other obligations.
At the very least, a business owner should know which laws apply to their business. Ideally, an owner will research this information prior to forming the business; however, if you have purchased a business from someone else, you should carefully research the legal requirements that pertain to its operations. For example, a dry cleaning business must comply with strict environmental regulations at the state level as well as city or county zoning and licensing issues. Such regulations may vary depending on where in Nevada your business is located.
Do not be afraid to hire a specialist to provide you with a brief primer on the statutes and regulations that apply to your business. Even if you later take over the compliance tasks, knowing which laws apply to your business will ensure you do not leave anything out.
Just knowing which laws apply to your business is not enough. Regulations and codes may change from year to year as laws are revised and new laws are enacted.
A good way to stay current is by reading industry trade publications. If there is a magazine or newsletter dedicated to your field, sign up or subscribe. It is akin to having an advisor or colleague keeping you up to date on current issues. While many publications are free, do not be afraid to spend a few bucks a month to subscribe to a relevant publication (then you just have to make sure you make the time to actually read them!).
Another way to stay current is to get out into the community and attend industry-sponsored events. Not only can such events be educational, they may reveal what your competitors are doing as well as allow you to network. Like-minded business people can be a great source of ideas.
Finally, attend state regulatory board meetings if they apply. Many of such boards also have email list serves that will send you pertinent information.
Know the difference between state and local regulations
While many people are familiar with general state requirements for their business – such as the need to obtain a state business license or comply with the sales tax process – many people forget about city and county requirements. An example of a business that might forget something is a small business with offices located in several areas of the state. An owner must make sure that the business complies at the state level, but also with ordinances enacted by each of the localities. However, even the most detail-oriented owners can miss something.
For instance, some localities – such as the City of Reno and Clark County – have enacted ordinances related to the operation of medical marijuana establishments. I recently assisted several clients in submitting applications to the State of Nevada to operate medical marijuana cultivation, production and dispensary establishments. It was not enough to simply know the requirements of Chapter 453A of the Nevada Revised Statutes and the Nevada Administrative Code – I also had to become familiar with the local ordinances where the facility was to be established to ensure that if the state application was granted, the facility would not be in violation of the local requirements.
For a business owner overseeing the operations in multiple locations, it can be difficult to manage both state and local deadlines and changes in the law.
Be on time
It sounds exceedingly obvious – do not miss a payment deadline, especially when doing so can technically require your business to cease all operations. However, numerous business owners let significant deadlines fall between the cracks. Indeed, even business owners who have the ability to pay a renewal fee or file required paperwork on time, can forget amidst all their other obligations. This can result in unnecessary fines and penalties. In some cases, a license reinstatement fee can be double and even triple of the amount of the original fee.
The easiest way to avoid this is to have a system in place for setting reminders in your calendar. Immediately upon receiving notice of the deadline, either calendar it yourself or designate a responsible person to do so. If you can sync your computer calendar with your phone, you’re ahead of the game. Just don’t forget to actually look at the calendar.
Get a good advisor
Finally, consult with a professional. For many business owners, there just isn’t enough time in the day. That is where a lawyer, an accountant or a specialized industry advisor comes in. While some people grumble about the added cost, I generally remind clients that a few hundred dollars up front is a lot better than tens of thousands of legal fees down the road to fix issues that have slipped through the cracks. Moreover, it frees you up to do what you do best – operate the business you started.
Paying someone else to stay current on the law and conduct an annual review of your business to make sure you’re meeting all the regulatory requirements can go a long way. It’s sort of like insurance — a little bit now will cover you later.
Elizabeth High, Esq. is a lawyer with Lee & High, Ltd. in Reno, Nevada. She practices bankruptcy, immigration and regulatory law. Ms. High has 12 years of experience including extensive litigation experience. She has represented numerous clients in regulatory matters before state and federal agencies.
High graduated summa cum laude from The Catholic University of America, Columbus School of Law. She earned a political science degree from the University of New Hampshire. She was the associate editor of The Journal of Contemporary Health Law & Policy. Ms. High moved to Reno in 2006 with her husband, Ryan. The Highs have two young children.