Mixing Business And Abodes: The Legal Issues Of Home Business

For those who've decided to shorten their daily commute to, say, 1 minute, there is likely no going back to the old way. To make sure that your plans for global domination are upfront and legal, read on for can't-miss tips.

1. Check the zoning ordinances.

Your neighbors may envy your home business, or even admire you, but just make sure that you don't annoy them or run afoul of your town's zoning ordinances before you begin. People have the right to reside in a peaceful, quiet, safe area, and zoning ordinances help ensure that happens by regulating the types of businesses allowed in residential neighborhoods and how it affects your neighbors. Common areas of concern include increased traffic, noise that creates a nuisance, odors, or use of toxic substances that endanger nearby homes and more. Check with your local zoning board before you order those business cards.

2.  Pick a perfect name for your business.

Since you will, at some point, actually need to order those business cards (and other things) make sure to choose an appropriate, memorable, and legal name for your business. A name will also be necessary for applying for licenses and other legal documents, so this should be among your first priorities. Take care to search your state's business name database to ensure that you aren't trying to use another business's name.

3. Procure the proper licenses for your city and state.

Many cities, counties and states require that you register your business. This may come as a surprise for those who look forward to the freedom of working from home, but theses government entities consider any income you produce taxable, and registering as a business allows them to collect those "use" taxes. Additionally, registering your business properly will also ensure that you are staying within the zoning ordinances. The upside of all this paperwork is the issuance of a state tax certificate, which allows you to make purchases for your business without paying sales tax and can also get you admission to conventions and trade shows.

4. Choose the correct business form.

Paying income tax on any income earned by your business is a requirement, and part of that process involves choosing a status, or form, for your business. If you want to keep it simple, you can file taxes as a sole proprietor, which requires no extra forms or incorporation actions. Be sure to speak with an accountant to find out the best form to use, be it a Limited Liability Corporation or C Corporation.

One major step to take in forming your own home-business is to seek the advice of an attorney like Caldwell Kennedy & Porter who can help you with the above steps and everything else you need to get your business off to a legal start.