Legalities
Don't Be Blind-sided by Laws & Regulations

LEGAL REQUIREMENTS
A home-based business is subject to many of the same laws and regulations affecting other businesses. Here are some general areas to watch out for, but be sure to consult an attorney and the 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.
• Certain products cannot be produced in the home. Most states outlaw the home production of fireworks, drugs, poisons, explosives, sanitary or medical products and toys in the home. Some states also prohibit home-based businesses from making food, drink and clothing.

In addition, there are registration and accounting requirements to consider. Among them:

• You may need to obtain a work certificate or license from the state.
• Your business' name may need to be registered with the state.
• Usually, a sales tax number must be obtained.
• A separate business telephone and bank account normally are required.

And if you have employees, you are responsible for:

• Withholding income and social security taxes.
• Complying with minimum wage and employee health laws.

CHECKLIST OF ACTIVITIES
As a new entrepreneur you must consider more than the specific activities—production, marketing, accounting, and distribution—before starting up a business. You must also consider the legal environment and government regulation of business and the related forms necessary to comply with these regulations.

The following is a checklist of activities necessary to consider when going into business:

Consult an attorney regarding the legal requirements of setting up and operating your business.

Consult an accountant regarding the financial requirements of setting up and operating your business.

Register the name of the business with the state

Make appropriate applications for licenses to operate in desired states.

Apply for local business licenses.

Obtain federal employer identification
number.

Apply for state workmen's compensation and unemployment insurance.

Determine applicable job safety and health regulations.

CONSULT WITH YOUR ATTORNEY
In most instances, an attorney should be consulted to help you meet many of the legal requirements facing you and your business.

Laws and legal requirements enter into most aspects of business and can vary greatly from state to state. Business forms, contracts, employee relations, antitrust, product liability and environmental concerns affect your business daily.

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