Generally the principle is that we should do this “Because additional flexibility with how small businesses are run allows them a greater chance to grow to become bigger businesses. “ but other than that… it’s also just the normal thing in many countries that certain regulations only kick in once your business grows to a certain size. I can thing if several USA and Australian laws like this.

Normal doesn't mean its right, seeing as the normal is currently anyone can do it, big or small, as per this thread and OPs suggestion.