Statutes are written laws or regulations enacted by a legislative body, such as a government or parliament, that set rules and guidelines governing various aspects of business activities and operations.
Starts at $0 + state fees and only takes 5-10 minutes
Last Updated: December 10, 2025
There are many ways to express an authoritative rule. Regulations, ordinances, and precepts are just a few of those ways. Yet statutes are probably one of the more common methods. In fact, statutes are one of the most common means of describing a binding rule. Both governments and corporations create and vote on statutes to express their authority.
Statutes cover every kind of topic and area of modern life, from criminal acts to environmental rules. It’s vital for business owners to understand what statutes are and how they’re affected by the statutes they encounter or create.
Statutes are commonplace, but they can be difficult to define because, strictly speaking, the definition of a statute depends on the context where that term is used.
Take, for example, the context of government. In that scenario, Merriam-Webster defines a statute as “a law enacted by the legislative branch of a government.” Within state and national legislatures, statutes start as a proposed bill. Assuming the bill receives the legislature’s vote, it is signed into law by the president or governor. At that point, the bill becomes a statute and carries binding authority. Once in place, statutes remain in effect indefinitely until they are either repealed or struck down by a court or other judicial body.
In a business context, statutes are defined as “an act of a corporation or of its founder intended as a permanent rule.” So for a corporation, the bylaws and other rules could be regarded as corporate statutes.
To successfully navigate the business landscape, small business owners need to understand more than just the basic meaning of a statute; they need to know exactly how a statute impacts their business and their commercial prospects. This includes understanding both the benefits and disadvantages of statutes.
Statutes have a lot of clear benefits. To start, statutes provide a clear source of authority that people can rely on. As a result, statutes help society run smoothly and fairly. Plus, thanks to the internet, it’s easy for anyone to access their state’s statutes (usually called a code) with a quick Google search. Statutes clearly define the responsibilities, rights, and privileges of the people and businesses they govern, too.
Statutes have some drawbacks, too. For businesses, one of the biggest disadvantages of statutes is that they constrain and regulate business owners in several ways. Although many of those restrictions are beneficial for society, they can cost business owners time and money.
Another common drawback to statutes: they’re crafted by politicians and their legislative subordinates. Also, statutes are crafted by politicians and their legislative subordinates. This means that some statutes can be long, complex, and confusing. It’s not uncommon for statutes to be hundreds of lines long and require interpretation by highly specialized attorneys. Despite that, business owners are required to understand those statutes and abide by them at all times.
Here are a few notable, real-world statutes that apply to businesses.
The Fair Labor Standards Act (FLSA) imposes a national minimum wage in the United States so that all businesses provide a decent wage to their employees. The FLSA also regulates other labor matters, including overtime rules, employee tips, and when children can work. Prior to the FLSA’s passage in 1938, there were few protections against oppressive labor standards and child labor.
The Civil Rights Act of 1964 imposed tremendous changes on American society. It outlawed discrimination based on a person’s race, color, religion, sex, and national origin. Title VII of the Civil Rights Act prohibited federal agencies and private employers from discriminating against people based on those factors. Title VII applies to all aspects of employment, including:
Subsequent laws have expanded upon Title VII, banning discrimination based on a person’s disability, age, and other factors.
The Affordable Care Act (ACA) significantly revised how employers provide health care to their employees. The ACA attempts to make healthcare more affordable for Americans by offering insurance subsidies to most American households and extending Medicare coverage. It also prohibits medical insurers from pricing plans based on a person’s pre-existing conditions, age, or smoking habits. Thanks to the ACA, all businesses with more than 49 employees have to provide affordable healthcare benefits to all full-time employees.
Statutes are important sources of law that significantly impact how businesses operate, how society functions, and more.
Recommended articles
Statutes create a lot of requirements for a business, and they aren’t always easy to satisfy. However, these statutes don’t have to deprive entrepreneurs of their business dreams. That’s where ZenBusiness comes in.
ZenBusiness specializes in all things business. With their Business Formation Services, entrepreneurs can start their own businesses quickly. If a business owner needs help staying compliant with annual requirements, the brand’s Worry-Free Compliance Service is a valuable resource. Those who need help staying on top of their business finances will find a valuable tool in ZenBusiness Money Pro. ZenBusiness takes care of the tedious red tape so entrepreneurs can focus on what they love: growing their new companies.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. For specific questions about any of these topics, seek the counsel of a licensed professional.
Written by ZenBusiness Editorial Team
The ZenBusiness Editorial Team has more than 20 years of combined small business publishing experience and has helped over 850,000 entrepreneurs launch and grow their companies. The team’s writers and business formation experts are dedicated to providing accurate, practical, and trustworthy guidance so business owners can make confident decisions.
Ready to Start Your Business?
Start Your LLC