Legal Issues You Need to Know Before You Start Your Home Based Busines

Filed in archive General on January 20, 2008

Thinking of starting a home based business? There are some legal issues you should be aware of first, such as:

Local Laws: Check with your local city or town hall before setting out to begin a home based business. Many municipalities have specific ordinances and laws pertaining to home based business. Some prohibit them all together and others allow only certain types. Checking out your area's laws are particularly important if your business involves customers coming to you, or if your business revolves around the sale of food products.

Taxes: No one likes to even think about them, but when you are your own boss, understanding your tax obligations are crucial. You will be responsible for paying your social security and income taxes and it's important to know just how much needs to be set aside for them. Depending on your business and how much you make, you may even need to make quarterly payments to the IRS. Make an appointment with an accountant and get your obligations set up and made clear to you. You won't regret it. On the plus side, being a business owner or freelance may entitle to you to several new deductions-again talk to an accountant to see which ones you may qualify for!

Registering Your Business: Most areas will require you to register your business and many require permits. There are fees involved-they vary depending on the type of business you want (LLC, Sole Proprietor, etc.).

business banking: Finally, you'll want to set up a bank account in the name of your business, or obtain a "DBA" (doing business as) account. This will allow you to cash and deposit checks made out to your business.

Next we'll take a look at some practical skills needed for a successful home business!