Work from Home: Is it Legal to Run a Business Out of Your Home?

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There are so many interesting and lucrative ideas for running a business out of your home but you need to first find out whether it is illegal to use your home for business purposes.

You can easily start a successful home business from your residence but check out the restrictions if any in your state!

The restrictions and rules might differ from state to state, but in general you will need permission in order to work from home or run a business from your home. You will need to seek the permission of some authorities for running a home business.

The type of permission involved and the authority from which you seek it will depend on the kind of property, whether you own it or have rented it and the kind of SME or small business that you intend running there.

Read: Coworking Advantages: 9 Benefits of Coworking Spaces

running a business out of your home
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Breach of Lease for Business Out of Your Home

Is it legal to run a business from an apartment? The first thing you need to do when running a business out of your home is to check the lease deed in case you are living in a rented house! If you live in a rented house, you might need written permission from your landlord for running a home business.

  • While running a business from home, check out the dos and don’ts listed out in the lease for the lessee, which means you.
  • Even if your particular home business is not mentioned in the lease deed, it does not mean that it is legally safe to do it.
  • In case your business disturbs other tenants (think drum lessons!), it could be a violation of the lease deed.

It would be a good idea to talk to the landlord regarding restrictions on home based businesses.

Checking the Codes

What constitutes running a business from home? When trying to find an answer to this, you need to check out the three major legal codes where you could be facing problems with your home business.

is it legal to run a business from an apartment

  • When considering business out of your home, pay heed to important laws that include Zoning laws, Business licenses and Ordinances pertaining to home based businesses.
  • The Zoning permitting system separates commercial land from residential and agricultural or industrial lands.

Check out with the local land use department in order to see where your property is zoned, such as residential or commercial. Check the SBA website for checking out the requirements specific to your state.

Even if there is a zoning restriction for your property, you can request for a waiver or variance for allowing an exception.

  • Check out the ordinance pertaining to your area, to see if there are any restrictions on the type of business, the number of employees, etc.

Check out any business licenses you might need for a home business at the City Hall. Otherwise, you might unknowingly conduct illegal business practises and might have to pay up a fine or a penalty. Even if there is no license requirement, you might need to register the business.

Insurance Policy Requirements

Most people overlook this aspect while attempting an apartment based business, because they think their home insurance covers their home based business. Not so! In fact, the home based business could actually invalidate your home insurance.

  • The kind of insurance policy you need will depend on the type of home business that you are conducting.

Tip: There are several insurance companies offering reasonably priced packages for home based business coverage.

how do i legally run a business from home

Professional/Special License

You might know how to start a business but might be wondering how do I legally run a business from home? Apart from a general home business license, some types of home based businesses require professional licensing.

  • For instance, for a work from home business such as daycare centers or hair styling centers will need professional certification from the state or federal level.
  • Contact the state business office and get a list of the occupations needing professional licensing.
  • Also, while considering work from home companies, you might require permits related to health and safety. For instance, a home based food business. You might need to get the premises inspected by the local health department or the fire department.

However, this might not be necessary if you are only doing online business and supplying the goods online, unless you keep an inventory of products that are health hazards.

  • Some permits for a business out of your home might be required related to the environmental safety. This is mostly required for home businesses related to retail selling of food and beverages.
  • You might also have to get sign permits if planning to put out a outdoor sign outside your home.

Warning: Remember that sign ordinances have restrictions related to the size, the type and the lighting of your sign.

  • You might also require sales tax license, though sometimes it is a part of the business license itself.

Tip: Be alert to work from home scams especially when considering online businesses.

Is It Legal to Run a Business Out of Your Home

If you’re planning to try out some home based business ideas, use the above as a checklist to see if you’re violating any laws, otherwise you could be forced to close down your business.

The good news is that in most cases if your home business does not cause much nuisance to neighbors or affect the environment, you will be be able to continue operating it and you may not run into any legal problems or violations.

startups beginning in living rooms or garages

We have all heard of so many successful startups beginning in living rooms or garages. In fact, according to the SBS, home businesses constitute around 50 percent of businesses in the US.

Rules are usually enforced in home businesses only if your neighbors complain, so one of the crucial steps is to get your neighbor’s approval. You can be upfront with them about your business and get prior approval.

Try to keep traffic and noise to a minimum level, so that people don’t notice that you even run a home business. Make sure that you have all the licenses and paperwork required for running your home business. The last thing you would want is to have an up and running successful business being shut down due to lack of such documents.

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