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No entrepreneur goes into business with the purpose of violating the law, yet some people may be doing just that and not even knowing it. For example, all businesses in the state need to fill out a Master Business Application (Chapter 19.02 of the Revised Code of Washington known as the Business License Center Act.). The business is then issued a UBI, or tax registration number.
“Most people would be surprised to learn that it is a criminal offense to operate a business in the state of Washington without a valid business license issued by the Washington Department of Licensing,” said Richard D. Seward, Attorney at Law who founded his firm 11 years ago and works with business startups, contracts, employment law, and other business-related matters. “Payment of all Business and Occupation Taxes and Sale and Use Taxes are required to maintain your business license in good standing. Failure to pay can result in revocation or suspension of your business license. At that point, you are out of business and continued operations of your business is a criminal offense.”
Another matter some businesses may not consider is consumer protection. Several laws, both federal and state, carry criminal sanctions related to consumers.
“For business owners, the most important caveat under the consumer protection laws is under the Washington Securities Act because the act is very broad in its application and carries very serious civil and criminal sanctions, both at the state and federal level,” Seward said.
The definition of securities is broad, and could mean any stock, bond, notes, investment contract and other considerations involving capital risk.
“Where business owners get in trouble is when they run out of cash and look to investors to keep their business going,” Seward said. “The act not only regulates the sale of the ‘security,’ but also the ‘offer to sell.’ Business owners need to seek legal advice before making any offers to sell stock or any other security.”
Another reason business owners get into trouble is by not separating themselves from their business entity. Any company that is not a sole proprietorship should be treated by the owner as if he or she is running someone else’s business.
“When it comes to putting money into a business or taking it out, the manner in which you treat the money is critical,” said John R. San Felipo, attorney at law in Silverdale. “You have to treat the business entity as separate from yourself, because it is.”
(Editor’s note: This article is presented for informational purposes only and should not be viewed as legal advice.). | 
