Home-based business owners face many legal challenges. Before you get in over your head, here are some important issues that you need to be aware of before investing your time, money, and effort into a new home-based business.
First, you will need to establish a business entity for your new venture. Whether you decide to go with an LLC or a corporation, you need to take this vital step for your business to protect yourself and your company from liability issues.
If your state requires a business license, you will need to apply for one before you sell anything. If your state does not require a license, it may require you to have a reseller’s certificate. Research your particular state’s business laws and get the proper license or certification.
Your tax situation will change as you start your home-based business. New tax laws are passed every year, and you will need to be stay current on these changes. Ignorance of tax laws is one of the most common problems facing home-based business owners.
Even if you have done your own taxes for years, owning a business means that you will need to file your taxes differently. You may need to enlist the help of a professional to make sure that your deductions are viable and that you are paying the correct amount of tax. You can find a lot of tax-related information on the Internet, but this is no substitute for the advice of a tax professional. He or she can answer your specific questions and advise you on the best course of action for your company.
Insurance is a commonly overlooked facet of running a home-based business. Unless you are covered already, you will need to provide your own health, dental, and life insurance. Do some comparison shopping before settling on a new health plan. You may be eligible for COBRA during this period, which will offer you coverage while you shop around.
In addition to health insurance, you should also investigate liability and business property insurance. This will ensure that you will not be held responsible in the event of an accident or act of nature.
Zoning laws are an important consideration for home-based businesses. Check with your city’s zoning commission to see if there are any limitations in your area before opening your new business. Read Dealing with Zoning Laws for Your Home-Based Business.
Having employees working in your home-based business opens up a host of other concerns. Will you provide health insurance for your employees? How will you withhold income tax? Is your home-based business subject to OSHA standards?
Although you will suddenly be faced with more legal issues by opening your home business, try not to get overwhelmed. By doing your research ahead of time, you will clear many of the legal hurdles that trip 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.