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Home Based Business Legalities
By Thomas Childs
arting an Internet based business is one of the least time consuming, most effort-free and least costly of businesses when it comes to complying with local business regulations such as licensing. This is primarily because the main concern with so many municipalities is zoning. The reason behind zoning regulations for business involves the amount of walk-in and drive-in traffic that a residential or semi-residential community would have to endure with the addition of a business in the neighborhood.
An Internet based business seldom meets resistance by local authorities, because itís reasonable to assume and easy to prove that this type of business doesnít typically have client traffic. An Internet business, just as its name would indicate, is conducted on the Web. Clients are met and communicated with by Web, by phone and by fax. Nothing of this would disturb the neighbors. In fact, the major hurdle of having the business there is the problems experienced by the Internet based business owner Ė the interruptions and noise of the neighbors. The opposite is seldom true. Internet based business owners can be in business for years before their neighbors even know they have a business.
Here, then, are the procedures typical of complying
with local business regulations. Of course, each municipality, and particularly each state, will have its own set of costs and compliance requirements, though most donít vary much. In Phoenix AZ, for example, the application for a local business license is $20 and the annual fee is $50, prorated for a portion of a calendar year the first year. The application is straightforward and easy to complete. The city wants to know the business name, the industry, and whether itís a sole proprietorship, partnership or corporation. The Internet based business owner would need to indicate the address, whether itís a rental property or owned, whether the business records are stored there or elsewhere (and where that elsewhere is) and whether itís a new business or one you just bought.
In most of South Carolina, in contrast, the additional question asked of an Internet based business Ė or any business Ė is how much, if any, client or vendor traffic is expected. They also inquire of the product or products sold, the type of business conducted in the course of the business day, and what type of business activities the proprietor or staff is engaged in during the course of that day. These questions are to determine if the business is going to be disruptive to the neighborhood. The business license fee starts at $20 (no application fee) and the first year is based on anticipated gross revenue. Subsequent years the owner is asked to divulge the gross profit of the prior year and from that the license fee is determined. Naturally the higher the gross profits the higher the business license fee.
The big question is - how many based internet business owners actually do all of this??
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