Home Business Legal Definition
If you want to hang your shingles permanently or temporarily at home, here`s what you need to keep in mind: A list of the most common ways small businesses get into trouble with the government. The negative connotation implicit in referring to home-based businesses as a “cottage industry” disappears. Still, presenting a professional image can be difficult when your 4-year-old answers your phone or your customers face mountains of laundry on their way through the house to your office. Here are some things you can do to let people know you`re serious about your business: If you run a home-based business, you`re likely eligible for a small business tax deduction. Some important takeaways about the small business tax deduction: While many people blithely ignore zoning, a complaining neighbor can put a real crease into your business plan, as you may end up with a cease and desist order and suddenly need to move or close. So find out what you`re allowed to do and get along well with your neighbors. With their help, you may be able to get a waiver of restrictions called waiver or conditional use authorization. You can also make an appointment to meet with your local zoning and planning department if you have any further questions. However, you should only go to a zone manager if you don`t first find your answer through local ordinances. Also, keep in mind that there may be private restrictions on home-based businesses. This could include those associated with homeowner associations, as well as contractual terms for deeds or leases. This MBN video explains what a home-based business is in a simple and easy to understand way.
It is important to note that there are still cities and counties where zoning laws are so strict that they do not allow any type of business in a residential area. To ensure that operating your home-based business in your city or county does not constitute a zoning violation, you must first obtain a copy of your local zoning orders from the county office or city clerk. If you live in an apartment, condominium, or co-op apartment, your ability to run a home-based business may be more limited. Leases, condominium use restrictions and other private housing contracts may expressly prohibit you from doing business in your home. Before starting a home-based business, talk to your landlord, condominium corporation, or other private housing authority to see if you can run a business in your home. One in six Americans lives in a planned community where there is a homeowners association. If you buy real estate in such a development, you automatically become a member of the homeowners association. They are also subject to its rules, which are usually set out in a lengthy document called “Covenants, Conditions and Restrictions” (CC&R). CC&R often regulates in great detail what you can do on, in and on your property.
The Homeowners Association is responsible for amending and enforcing these rules. The number of home-based businesses continues to grow due to the rise of technology. [17] In the UK, 8 million people were running a home-based business online in April 2013. [18] If you have started a home-based business, contact a qualified business lawyer in your area to take advantage of some tax benefits that may be available to you. You can also ask your lawyer to guide you through compliance with zoning laws and other important areas of law. Zoning ordinances that restrict businesses in residential areas are worded in different ways. Some are extremely vague and allow for “usual domestic occupations”. Others allow homeowners to use their homes for broad, but not specific, business purposes, such as “domestic professions and occupations, crafts and services.” Still others contain a detailed list of authorized professions, such as “law, dentistry, medicine, music education, photography [and] carpentry.” Regulations that allow home-based businesses usually contain detailed regulations on how to conduct business activities. These regulations vary widely, but the most common ones limit your use of traffic signs, car and truck traffic, and the number of employees who can work from your home on a regular basis (some ban employees altogether).
Some ordinances also limit the percentage of your home`s floor space that you can devote to your business. Study your prescription carefully to see how these rules apply to you. If you`re still unsure whether your business is authorized, you may be tempted to discuss it with zoning or planning officials. However, until you understand your venue`s rules and policies, you are collecting information without identifying yourself or drawing attention to yourself. For example, ask a friend who lives nearby for general inquiries. If you`re ready to start your small business, consider a trusted online business incorporation service like the one we offer. As mentioned earlier, you should consult with a competent business lawyer before opening your home-based business. An experienced local business attorney would be in the best position to understand your state`s specific laws and zoning designations, as it relates to a home-based business. Whether your business is making money or not, you should keep an eye on your home office expenses and claim the deduction on your tax return.
Home-based businesses offer certain economic freedoms and benefits to the small business owner, but there are a number of legal issues that should be considered before starting a home-based business.