Raven's Work From Home Resources
Legal Issues for the WAH/Homebusiness Person
Local, county and state agencies for some reason, care what you are doing, who you are doing it with, how you are doing it and where it is being done. It is an unfortunate fact that you need to acknowledge and go along with if you want to work at home legally. There is, at least, some forms, procedures and fees involved and failure to complete the necessary steps can really hurt you in the future.
If you work in direct sales for an established company, or if you work in a more traditional manner (such as editing work over a network from home) for a local business, it is possible that they will take care of this for you. If not they will be able to give you firm guidence as to what needs to be done as many will not give you any work until you have completed these procedures. If you are completely running the show yourself, however, you will need to discover and then fulfill these legal issues yourself as well.
- Zoning: Be sure to check zoning restrictions for your area. Chances are if you are the only one involved and your inventory/suppliers can be contained within your home, a storage facility or will be drop shipped from the wholesaler there will most likely be no problem with your enterprise. However it is best to check. There may need to be a variance issued for you.
Usually what is required to get approval or the appropriate variances issued is compliance with the following: No outside signs (or no signs larger than a certain size), family or single person only employment, no outside storage, no large machinery outside, no excessive traffic in and out of your residence, no obstructions to the public walkways and no excessive noise. And of course once you start, make sure your neighbours have nothing to complain about while you go about your business.
- Licensing: You will need a business license to work at home unless you are employed by someone like Avon. When you get into the appropriate offices you may be told flat out that there are no home businesses allowed in your zone or within city limits. If this happens don't accept it right off, go over this person's head. You may need to get a zoning variance or conditional use permit to get your license and it is possible the clerk did not want to deal with it or did not know where you needed to go to get these items. His or her boss, however, will know the answer.
There is also a possibility that you will need another license - a professional license or permit. Some occupations are regulated (such as cosmetology) and some are regulated by governmental bureaucrats like the FTC (running a radio station for example). Contact your state chapters to see what is necessary.
The IRS always has to have something to say, you may need to get an Employers ID Number (EIN). This will be necessary if you have other employees or if you set up as a partnership or corporation. If you are the only one involved you will be able to use your SSAN most likely, but it never hurts to call the IRS.
- Names: You will need to register your business under some sort of name. It is best you find a name which adequately accomodates what you are planning to do. If you are planning to have multiple streams of income and do more than one thing, a general name such as BB Jones Enterprises will suffice. Keep in mind, however, that if you specialise in one area, it is best to name the business something which describes what you are doing. BB Jones Enterprises is not going to be a memorable name for a traveling Hairdressing company. Brenda B's Beauty would be more appropriate.
- DBA and Fictitious Names: DBA means "Doing Business As" and a Fictitious name might mean a psuedonym or pen name. People use these for various reasons and if your business identity is not going to be your own, you will need to register a fictitious name certificate with your county and possibly elsewhere. To see if anything else is needed, it is best to contact your bank. You will have to have all of the appropriate paperwork when you set up your account, so they will know what forms are necessary and where you can get them.
- Business Accounts: You will need to keep track of your money. You will need to be able to receive payments and purchase things for your business. For these you will need a business account. Home Businesses often get audited by the IRS also, and if you start with a separate account from the beginning and keep good records it will be much easier to take care of taxes in the end. Besides, it looks better if you pay for the fifty pounds of ceramic materials you need with a check with your business on it than it does to do so with your personal. Usually all you will need to get a business account is your business permit, Tax ID and DBA/Fictitious name certificates. Call the bank in advance and ask, they would rather you come in prepared than not be able to complete the process when you come in the first time.
It may seem like a royal pain to take care of your legal matters in the beginning, but if you fail to do so you could end up paying fines or having alot of legal problems. Take the time to do things properly at the start you won't have anything to worry about.
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