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Licensing Requirements for Home Based Businesses

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Licensing Requirements for Home Based Businesses

By NicoleD
Published: March 16, 2009 Updated: February 17, 2011

Starting a home-based business is a rewarding and flexible option for thousands of small business owners. However, starting up is not as simple as hanging an “Open for Business” sign on the front door. Understanding the required permits you’ll need to legally operate your business can save you from big head-aches (and big fines) down the road. Regulations vary based on industry and location, and while there is no one-size-fits-all permit checklist for home-based businesses, there are general guidelines home-based business owners should be aware of:

1. General Business Licenses
Most home-based businesses owners will be required to file an application for a general business permit from their city or county to legally operate in that area. County registrations may apply to you if your home-based business is outside the jurisdiction of a town/city. 

2. Professional and Trade Licenses
Some industries may have to obtain professional/occupational licenses, such as a nursing certificate or a real estate license, at the state government level. You can contact your state's business license office for a complete list of the occupations that require licensing in your area. 

3. Home Occupation Permit
Many city and county zoning and planning agencies require all home-based businesses to get a Home Occupation Permit. If a permit is not required in your city, the zoning office should tell if your neighborhood is zoned for the business activity you plan to conduct from your home. If your area is not zoned for your type of business, you may need to file for an additional variance or conditional-use permit. Visit the Zoning Laws for Home Based Businesses page for more information about zoning laws for home-based businesses. 

4. Sales Tax Permit
If your home-based business sells taxable goods or services, you may be required collect state and local sales taxes from your customers. If you sell your products in a state that charges a sales tax; or levies a gross receipts or excise tax on businesses you may have to apply for a tax permit or otherwise register with your state revenue agency. If you plan to run an online business, visit Collecting Sales Tax Over the Internet.

5. Health and Safety Permits
Depending on your location and industry, you may need either a permit or inspections from your local fire department, especially if your business requires the use of flammable materials or assembling of people in one location (such as a child care service) Air and water pollution by businesses are monitored in some communities. You can check with your state environmental protection agency to see if these regulations are applicable. Health Department permits are typically issued by your county government, pending an inspection of the business premises, if you plan to sell food to the public or to other businesses. Additional permits may be required for food-service or food-preparation depending on your state. 

6. Sign Permits
Some cities and town have sign ordinances in effect that restrict the type, size, or location of signs placed on your property. 

7. Construction Permits
Environmental and building permits may be required for construction. It’s a good idea to check your local government’s building and planning department before undergoing any construction efforts. 

8. Tools and Resources

Message Edited by NicoleD on 03-17-2009 09:48 AMMessage Edited by NicoleD on 03-17-2009 09:52 AM

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Thank you very much for posting this article. Its a very useful article. We will be acquire lot of things from this site. ---This post was edited to remove a commercial link. Read our discussion policies for more Community best practices.
Open a business enterprise should have quite a variety of commercial licenses to ensure the development of sustainable businesses! Thanks for your post! My income is pretty much useful information.
I believe the lisencing requirement should be made more simple. Home businesses are just too small to manage the complicated administration and high expense
4. Sales Tax Permit If your home-based business sells taxable goods or services, you may be required collect state and local sales taxes from your customers.
If you are starting a home based business, also check with your insurance agent. While your homeowner's insurance policy will cover the damage to your home, it generally does not cover your business equipment and lost profits during the time when your property is being restored. Once you find a business insurance policy that is right for you, contact your insurance agent at least yearly to ensure you have enough coverage.
I must agree that these Lisencing requirement should be made more easier it's complex to get a lisence for a home based business. I have been trying to start and get registered my new home based business that can be benifitial for others and for me as well.
Wow. Excellent read. I just went to my state government's website, and filed for an LLC. I think i'm better of filing and having a registered business than trying to get under the radar. For all those thinking about registering, it's actually a REALLY simple process. Don't pay a lawyer, do it yourself. ---This post was edited to remove a commercial link. Read our discussion policies for more Community best practices.
Thank you very much for posting this article. Its a very useful article. We will be acquire lot of things from this site. ---This post was edited to remove a commercial link. Read our discussion policies for more Community best practices.
I must agree that these Lisencing requirement should be made more easier it's complex to get a lisence for a home based business. I have been trying to start and get registered my new home based business that can be benifitial for others and for me as well.---This post was edited to remove a commercial link. Read our discussion policies for more Community best practices.
Apotik - Application costs and fees vary depending on the location of your business. You can contact your state's business licensing office for details (scroll).

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