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Legal 101

Business Licensing

There are two types of business licenses. The first is a permit, allowing you to run a certain business at home. The second is a "skills" license issued by the state for such fields as accounting, architecture or photography. For the latter, check with your state's secretary of state office to find out if your profession requires a skills license.

As for business permits, your city's business license office probably licenses everyone from independent paralegals to muffin bakers. Occupations are grouped with similar ones in categories, and each category has a set of hoops to jump through.

A home occupation permit can cost anywhere from $50 to $250 and is usually valid for one to two years. Chances are you'll have to declare your gross sales for the period, which your locality may use as a tax basis.

Businesses involving cooking or baking, day care, high noise levels or environmental pollution are usually regulated more strictly. If you want to be the next Mrs. Fields, you may have to convert your kitchen to "commercial" quality or rent a commercial kitchen. Other local departments may also have a say in your business, including social services, health, fire and sanitation. Your city or county business license or business tax division can help you sort out the regulations you need to be aware of.

If you decide to call your business "Roadrunner Resumes," for example, rather than just using your name, you may also have to file a "fictitious business name certificate" with the county or city clerk. This gets published in a newspaper as a public notice.


AdditionalResources

Bankrate.com: The State and Local Resource Guide lists laws, regulations and tax demands on new business owners by state.

Start, Run and Profit From Your Own Home-Based Business by Gregory F. Kishel and Patricia Gunter Kishel

The Home Business Bible by David R. Eyler

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