My startups
and smaller clients love to ask me this question.
The answer
to “Does size matter?” is for the most part pretty consistent, which is, “It depends!”
It depends
because even though there may be definitions of what a small business is, when
the government puts out a new regulation, or an amendment to one, it may reason
that because such new changes will have a limited impact on small businesses,
that providing an exception for small businesses to compliance with the new
rules is unnecessary.
Let’s take
the recent amendments to the regulations for the Textile Fiber Products Identification Act (“the Rules”) as an
example.
Under the
Small Business Size Standards issued by the Small Business Administration,
textile apparel manufacturers qualify as small businesses if they have 500 or
fewer employees.
Clothing wholesalers qualify as small businesses if they have 100 or fewer
employees.
The Federal
Trade Commission’s (FTC) staff estimated that approximately 22,218 textile
fiber product manufacturers and importers are covered by the disclosure requirements
of these amended Rules.
While the
FTC figured that a substantial number of these entities likely qualify as small
businesses, it concluded that the amendments would not have a significant
impact on small businesses because they do not impose any significant new
obligations on them.
The FTC
therefore, did not propose any specific small entity exception or other
significant alternatives as it did not find it necessary to minimize the
compliance burden, if any, on small entities while achieving the intended
purposes of the amendments.
What do you
think? Should smaller businesses be subject to less rigorous compliance
requirements?
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