Commercial operations conducted from a residence are usually subject to home business laws. Such operations may be faced with the same legal issues as other businesses, such as deciding on a company type. There are likely to be zoning laws that determine which businesses may be operated from a home and how those operations are to be conducted. It is common for home business owners to be subject to tax regulations that affect deductions that apply when residential space is used for commercial purposes. Home businesses may also be subject to licensing laws.
Home business laws can vary from one jurisdiction to another. Individuals in one place may have to be concerned with regulations that are not an issue in another. This is why it is very important for anyone planning to establish a home business or who has already done so to familiarize herself with local laws.
Businesses that are operated in a residential setting are faced with some of the same legal issues as operations that are conducted in commercial settings. For instance, one of the first types of home business laws that a person is likely to be faced with is deciding upon the type of business he will run. For example, he may wish to establish a sole proprietorship, which is generally the simplest option. If he decides to have a limited liability corporation (LLC), he can protect his personal assets, but there is more complication involved.
There are often home business laws that pertain to taxes. A common set of regulations in this regard are those dealing with deductions for home office space. These regulations usually address how a person can reduce her tax liability by claiming that she sacrifices part of her home for the operation of her business.
Zoning laws determine what can be done in a certain area. Within this category are a wide range of home business laws that determine if a business can be operated from a residence. Some places completely restrict commercial activities in areas that have been zoned as residential. In other places, some types of business are permitted, while others are barred. When it is permissible to operate a business from home, zoning can affect the number of visitors who are permitted, the number of employees who are permitted, and whether signs can be displayed.
Even if zoning laws will permit a certain type of home-based business, there may be licensing restrictions. If a person does not obtain the necessary licenses, he will be operating illegally. This could have significant adverse effects on his business that may drastically outweigh the costs of obtaining the required legal documents.