The expansive Act paves the way for businesses to get improved access to finance and puts an end to zero hours exclusivity clauses.
Business secretary Vince Cable said the new legislation was designed to help entrepreneurs looking to establish new and growing businesses.
“The Small Business Act will create the right environment for small businesses to continue to thrive by giving them greater access to finance to help them innovate and grow, and make it easier for them to export goods and services made in Britain.
“The bill’s measures also mean there is nowhere to hide for firms who do not play by the rules, whether by abusing zero hours contracts or not paying the minimum wage,” Cable said.
On access to finance, the legislation now requires banks to pass on details of small and medium-sized enterprises they decline for a loan to online platforms which can help match them with alternative finance providers.
Adam Tavener, of Bristol-based firm Clifton Asset Management, said the new legislation would change lending to small businesses forever.
“At government level the legislation is not seen as the end game but the beginning of a new way for small businesses to access finance in the future.”
Business minister Matthew Hancock added that the bill had taken radical action on prompt payment to end the late payment culture where the largest companies will now have to report on payment practices twice a year.
“It contains measures across the board to make it easier to start and grow a business.
“As someone who understands how it works, having been part of a small business myself, to be able to make the changes available today is one of the reasons I went into politics,” Hancock said.
The Federation of Small Businesses (FSB) said the act was “landmark” legislation.
“For the first time, an important piece of legislation has been devoted to small businesses. This underlines the huge economic contribution small firms make to the UK economy and recognises their distinct needs,” John Allan, national chairman of the FSB said.
The Small Business, Enterprise and Employment Act 2015 was passed on 27 March.