The recent downturn in the economy has even more people than before working from the safe haven from their homes. The types of home-based businesses vary from internet marketing to programming. Regardless of what your home business is, it is still a business. From a legal point of view a home-based business is not much different than any other. You have to select a name for your business; form the legal structure (eg. Sole Proprietor, Limited Partnership, Limited Liability Company, etc.); pay taxes; procure insurance; execute contracts; and receive/collect payments from customers.
One key issue particular to a home-based business is restriction on property use.
Let’s take a look at zoning laws. Can you legally run a business from your home? The answer to this question can differ considerably from location to location. Condominium and planned developments generally have a detailed set of rules and regulations pertaining to home-based businesses that are even more stringent than most local zoning ordinances. If you live in one of these types of communities, it is a good idea to review these rules and regulations prior to investing substantial time and money into a home based business. If your home is not in this category, it will be covered by ordinances stemming from city, county, village or township governments.
Zoning Ordinances vary widely but all have the same basic intent: they separate the land into districts wherein particular activities are permitted or prohibited. Some areas may well prohibit home-based businesses all together, however, it is more common that the ordinances will merely restrict the home-based business activities. Common restrictions include but are not limited to the following:
-number of employees
-visible signage
-percent of home devoted to business
-on-street parking
-traffic/visitor count and frequency
It is not always easy to determine whether or not your home-based business will conflict with the zoning ordinances in your area, so as mentioned earlier, be sure to check into the specific requirements prior to investing significant time or capital into your home-based business.
