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Legal Restrictions

A home-based business is subject to many of the same laws and regulations affecting other businesses and you will be responsible for complying with them.

There are some general areas to watch out for, but be sure to consult an attorney and your state department of labor to find out which laws and regulations will affect your business.


Be aware of your city’s zoning regulations. If your business operates in violation of them, you could be fined or closed down.

Restrictions on certain goods

Certain products may not be produced in the home. Most states outlaw home production of fireworks, drugs, poisons, explosives, sanitary or medical products, and toys. Some states also prohibit home-based businesses from making food, drink or clothing.

Registration and accounting requirements

You may need a – work certificate or a license from the state (your business’s name also may need to be registered with the state), sales tax number, separate business telephone, and separate business bank account.

If your business has employees, you are responsible for – withholding income and social security taxes, and complying with minimum wage and employee health and safety laws.


You’ve decided on your product or service. You’ve written your business plan and you’re about to order business cards and stationery. Before going any further, call your city or town hall to obtain a copy of your zoning ordinance. If home-based businesses are allowed in your municipality, keep reading. If some or all are restricted, find out if a preexisting clause might apply or if you have to ask your zoning board for a variance. Once you learn that your business conforms to zoning regulations, it’s important to keep up with any new proposals that may affect your situation. It’s also a good idea to join business organizations and neighborhood groups in case you ever need to rally together to propose or oppose new regulations. Always maintain good relations with your neighbors. They could be a crucial factor should adverse regulations affecting your business ever be proposed.

Zoning is an area where an attorney can be very helpful. If in the unfortunate and unlikely event your business does not conform and you are given a cease and desist order, consult with an attorney who is familiar with the regulations and workings of the zoning and appeals boards.


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Source by Kurt Mortensen

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