Legal Hurdles of Starting a Home-Based Business

Are you considering operating a home-based business? Have you been toying around the idea for some time and think that it is the best model to operate with? Think carefully and research all the requirements that you need to comply with before you seriously start to take steps to set up an enterprise from your own home.

Your own business and basing them at home can be tempting. After all, you don’t only own your time; you don’t have to spend a lot of money leasing office space and on other similar concerns.

It seems to be the easiest way to start a business: you have almost everything you needed. Unfortunately, that’s not all you have to see about starting a home-based business.

Like every business venture, there are some legal and financial hurdles that you have to face before you can successfully set up a home-based business. You have to know about these before you start selling the items you’ve been planning to invest on as a business.

Here are some of the things that you should have ready before operating a home-based business.

  • License
    First, in order to sell anything, you need to procure a license from your state’s appropriate agency. Find out from that agency (they may have their own websites) what they require for you to secure a license for your business or, in the alternative, to get a reseller’s certificate.
  • Registration
    Whether you like it or not, you still need to register your business. This is to make sure that you are legally protected especially when it comes to the name. You may have a company or a similar business operating with the same name. If that particular “clone” gets into trouble, you wouldn’t want to deal with mistaken identity, would you?

    Another reason to establish a business entity is that it provides you with the ability to go after fraudulent customers and get full protection from the law. You might not be able to file a case as a corporate entity because you don’t have the legal requirements to prove your identity in court. Worse, you might face a case yourself for illegal operation.
  • Taxes
    Businesses require taxes. If you decide to start a business – whether home-based or not – this requires different filing procedures from what you are used to when filing income tax.
  • Legislation
    Small-time home-based businesses are subject to different laws compared to bigger companies. For example, there are zoning laws that impose limits on the operation of a home-based business. These laws are designed to regulate home-based business especially when it comes to the behavior of your non-family employees, and even the products that you sell.

If you think home-based businesses are pretty simple, then think again. However, you would encounter very little to no problems at all if you do your research ahead of time and get the needed things ready beforehand.


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