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Business formation considerations for a home business

by | Sep 12, 2014 | Business Formation & Planning

When many people in Fort Collins, Colorado, think of starting their own business, they think of going the traditional route: Buying some real estate, hiring employees and starting from the ground up. However, the reality of the situation is that many people are actually interested in taking a more non-traditional route and starting a business out of their own homes. What should these people consider, in a legal sense, as they go forward?

First of all, they have to look at zoning. Business formation may not be possible if the area is not zoned for this type of use. However, this will be legal in most cases as long as certain regulations are met. For instance, there may be laws about how signs can be used or how many employees can be hired.

Next, people have to consider the terms of their leases if they do not own their homes. Does the lease specify that no commercial practices can be done in the building? All leases are different, so each person needs to check their own.

Finally, after they get everything set up, these new business owners may want to know if they qualify for certain tax breaks. There are many things that can be written off, but this does have to be done legally. For instance, part of the house has to be used for nothing but the operation of that business, and the house has to be the main place where the business operates.

It is crucial that any workers in Colorado who want to start businesses out of their homes know all of the legal ramifications of doing so and what officials steps must be taken to adhere to the laws.

Source: FindLaw, “Home-Based Businesses: Overview” Sep. 12, 2014

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