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Home is where the Business is

The advantages of operating a business from your home need to be balanced against legal considerations that may not be as apparent. Attention to these matters at the outset of starting a home-based business can help you avoid legal pitfalls and can greatly enhance your prospects for success.

Business Organization

Your business may be a glorified version of a former hobby, but, as an ongoing business, the enterprise needs to take a legal form best suited to your circumstances. Factors such as tax issues, the number of employees (if any), and avoiding personal liability will influence the decision on a business's legal structure. The most common choices are sole proprietorship, partnership, corporation, and limited liability company.

Zoning and Building Codes

A plan for a home-based business will stall if local land-use regulations prohibit a business from being run on property that is zoned "residential." Just what qualifies as a "business use" under a zoning ordinance is not always clear, however, and home-based businesses may be permitted if certain restrictions or conditions are met.

When your home doubles as a business office, compliance with local building codes becomes a bigger issue. Features that may not apply to a residence can come into play, such as handrails or ramps for providing access for persons with disabilities. Your electrical system could need an overhaul in order to comply with the code, especially if the business requires computers or other technologies not typically found at home.

Insurance

Because a fledgling business is vulnerable to financial injury from lost or damaged business property or injury to a client, it is also in need of appropriate insurance. Simply continuing your homeowner's insurance without changes may not be sufficient when starting up an in-home business, especially since such policies generally are meant to cover personal property only. The simplest and least expensive solution may be to add a "rider" to an existing policy that covers business assets and liability. Another alternative is a new, separate policy covering anything related to the business.

This website is not intended to constitute legal advice or the provision of legal services. By posting and/or maintaining the website and its contents, Lucas Law does not intend to solicit business from clients located in states or jurisdictions outside of Illinois wherein Lucas Law or its individual attorney(s) are not licensed or authorized to practice law.

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