Legal Issues
Make sure to answer these three legal questions when starting a homebased business.
Q: What are the most common legal oversights? As a new
business owner, I want to make sure I'm not missing something
important.
A: Here are some common legal questions you should
contemplate before starting a homebased business:
Can you legally work from your home? If not, you may
receive a cease and desist order from your county, city or
homeowners association requiring you to stop operating your
business at home. You can prevent this by checking the zoning code
and association governing documents posted on most city and large
homeowners association websites. Even better, talk with an attorney
to ensure you're in compliance. If your business violates
zoning laws, you may be able to get a conditional use permit or a
variance from the city or county.
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Do you need to collect and pay sales tax on your product or
service? Failing to collect could hurt you if you receive a
notice for past-due sales tax plus penalties and interest. You may
also need to get a seller's permit, a certificate of authority
or a resale certificate from the state agency that administers
sales tax collection. The types of products and services considered
taxable vary from state to state.
Are you encroaching on someone else's trademark? If
so, you can expect to be forced to change your business name, since
you probably can't afford to litigate the issue. To reduce the
chances of this happening, do a trademark search at the United
States Patent and Trademark Office and check your state's trademark database. If there's even
the slightest doubt in your mind, consult an attorney.
These are just a few common oversights. Also make sure you find
out if you need a license to conduct business and if your state
levies a tax on gross receipts.
Authors and career coaches Paul and Sarah Edwards' new
book is The Best Home Businesses for People 50+.
Send them your questions at www.workingfromhome.com or in care of
Entrepreneur.