Legal Issues for Home-Based Businesses

By Jessica Santiago

Home-based business owners can face several legal challenges. Before you get in over your head, here are some critical issues to consider before investing your money, time and effort into a new home-based business.

The first step is establishing a business entity for your new venture. Whether you decide to go with a corporation or an LLC, it’s imperative you complete this vital step to protect your business and yourself from liability issues.

You also will need to determine if your State requires you to have a business license before you can legally sell anything. If your State does not require you to have a business license, they still may require that you have a reseller’s certificate. Be sure to research your particular state’s laws and obtain the proper permit or license.

Your tax situation will change once you start your home-based business. New tax laws are passed every year, and it will be critical that you stay up to date on these changes. Ignorance of tax laws is one of the most common problems facing home-based businesses. Even if you have done your taxes for years, owning a business means that you will need to file your taxes differently. It might be best for you to enlist the help of a professional to ensure that your deductions are viable and that you are paying the correct amount of tax.

A commonly overlooked facet of running a home-based business is insurance. You will need to provide your health, dental, and life insurance. If you are going to have employees, you will need to decide if you will provide health care for them also. You will want to do some comparison shopping before settling on a plan that will work best for you and your employees if applicable.

In addition to health insurance, you will also want to investigate liability and business property insurance. This will ensure you will not be responsible in the event of an accident or an act of nature.

Although you will be dealing with more legal issues by opening your home business, try not to get overwhelmed. As long as you do your research ahead of time, you can eliminate many of the legal hurdles that have tripped up other small business owners. You will be ready to face any situation that may arise, and you can make your business a successful, legal operation.

And remember, when starting any home based business consider On Point Executive Center for your corporate address needs, notary, office and conference rooms by the hour and business services on demand.  813.350.7800