Who doesn't love the idea of working at home and spending more time with family, avoiding a grueling commute and getting more time back in your personal life? Working from home was already experiencing high growth over the last few years, and because of the events of 2020, it has accelerated dramatically. Presently, there are millions of people in the U.S. who are either self-employed or are working remotely.
A home-based business has many benefits, but doing proper research before you dive in is essential. One part of your research should be finding out what business licenses may be required federally or by your state. You may need home business licenses in order to be in good standing with governing bodies to keep your business operational.
The last thing you want is for your successful business to incur fines or be forced to shut down because of government permits. So, before you start a business, make sure that you do not miss out on any legal obligations you may have.
What Home-Based Business Licenses Do I Need?
A business license is written permission from the government to conduct business. There are various types of licenses, and the type of home-based business licenses you need will depend on the nature of your business and where it will operate. You will then need to properly apply for the required licenses and pay any associated fees — they are not automatically appointed to you when you register your business, which is why some business owners find themselves in hot water.
Here are some of the home-based business licenses that you may need.
General Business License
No matter what type of business you are starting, you may need to get a general business license to engage and operate a business within the local jurisdiction. This is the basic and most important license that you should have. In addition to obtaining the general business license, make sure that your business meets the requirements of the local zoning ordinances. It helps to register your business for taxation and get a resale number.
There are various types of home-based businesses like legal advisory services, medical services, financial advisory services, etc., that require professional certifications.
It shows that the person meets the requirements and is qualified to provide the services in that particular profession. Performing your services without having a professional license that proves your expertise can open you up to fines and litigation.
Sales Tax License
This is also known as a sales tax permit or seller's permit. A business that is involved in selling any sort of goods and services should obtain sales tax before it starts remitting or collecting the sales tax. Though it is typically a part of a general business license, you need to get a separate sales tax license in some cases. Make sure that you have this before you start operating your business.
If you want to promote and advertise your business by putting a sign out in front of your home, you may need to get a sign permit. Every city has sign ordinances that restrict the location, type, lighting and size of the sign you can use. You should make sure that the sign you are using is in accordance with the law to avoid any fines. Also, if you live in a rented house or apartment, you may need to get permission from the landlord.
Health and Safety Permit
If customers come to your home for business purposes, you may need a safety permit. You may even need to get permission from the fire department, depending upon the type of business you have and the various codes you need to follow.
If you are involved in selling food and beverage, you should obtain a health permit or license from the local health department.
Home Occupation Permit
If you want to operate your business from home, you may need to get a home occupation permit. It protects your neighbors' rights and ensures that your business will not create any kind of trouble or problems for them. A home occupation permit typically requires that you affirm you are operating according to any HOA laws and that your property owner is aware of your home-based business.
Other Things to Keep in Mind When Obtaining a Home Business License
Make sure that your business matches with the local zoning laws. Properly research the laws and confirm if your planned business can operate there. For example, the zoning laws might not permit some businesses to operate from home.
Check your HOA and other lease restrictions if you rent or lease your home. Neighbors may be worried that your business will create problems like taking up all of the available parking, creating excess noise, etc., so a home-based business may be restricted or prohibited. Apart from this, if you live in a rented house, you may need to get permission from the landlord.
How Do I Obtain Any Home-Based Business License I Need?
Depending on your type of business, you may need federal, state, and even local licenses. It can be a tedious task trying to secure everything you need in order to fill out all of the paperwork and pay your fees. You'll need to thoroughly research what the state, city and federal government requires for your home business and your industry. Your state's Department of Revenue or Secretary of State website is typically the place to start.
Rather than going through the hassle and spending time doing it alone, consider using Incfile's Business License Research Package. We can do the research for you and provide a list of all the licenses and permits you need for your business, along with the correct forms to file. We'll give you instructions for filing, any supporting document requirements and the fees that you'll need to pay.
Our service will streamline the process so you can get your home business up and running in no time. (Learn more about LLC's)
Matt Weik is the Founder/Owner of Weik Fitness, LLC and is a well-respected fitness expert/author with a global following. He’s a certified strength and conditioning specialist, personal trainer, and sports nutritionist. His work has been featured in over 85 fitness magazines and over 1,500 websites. You can contact Matt via www.weikfitness.com or on his social channels found on his website.