One of the toughest parts of starting a home business is dealing with all the legal and tax issues. This may seem complicated and scary, and may keep you from even starting a business. But don't let it be an excuse for delay. Just educate yourself.

Q: Do I need a business license and what type of permits will I need?

A: This varies by city. To find out if you'll need the following licenses or permits, call your local county or city clerk's office. They are usually located at City Hall.

* Seller's or Resale Permit -- If your state has a sales tax, and you plan to sell goods in-state, you will need this permit. It allows you to avoid paying sales tax on supplies when you buy from wholesalers.

* Food Permit -- If you plan to make or sell food, you'll need this one. Expect to receive a visit from your local health department.

* Zoning Permit -- Don't mess around with this one. Visit your local planning department or city zoning board to see if your area is zoned for a home business.

* State occupational licenses -- Day-care operators especially need to check this out. Your State affairs office should be able to help.

Q: Do I need a tax ID number?

A: If you have employees, are in a partnership or are incorporated, you will need a federal Employer's Identification Number. If you are a sole proprietor and have no employees, you can use your Social Security number as your tax ID number. You can obtain an EIN through the Internal Revenue Service.

Q: Is the naming of my business important?

A: Yes! Make sure you don't give your business a vague name. You want your customers to remember your name and you want future customers -- if they see your name on the street -- to know what it is you do. P> Make sure someone else doesn't have whatever name you come up with. First, check your phone books. If you don't see it, go to your county clerk's office. They have on file all the business names in your area.

There are two ways to name your business. For example, if you have a marketing service, you could call yourself "Make Your Business Known" or "Liz Folger's Marketing Service."

The first name will require a DBA (doing business as) registration. You can do this at the county clerk's office. Some clerks, for a charge, place your DBA in the local paper for you. If they don't, you need to run it once a week for four weeks. If you decide to put your surname into your business name (Liz Folger's Marketing Service.), you may not need a DBA. (Some states always require you to file a DBA and most banks won't cash your checks if you haven't registered your business name.) You also need a DBA if your business name includes words such as Company, Associates, Group, Brothers or Sons.

If you want to grow your home business, you'll need national name protection. You will then want to register your name as a trademark. To do this you should contact the U.S. Patent and Trademark Offices in Washington, DC.

Q: Do I need a lawyer?

A: If you are starting your business via a business opportunity ad or franchise, I highly recommend you discuss it with a lawyer. It's best to spend the money now rather than lose a lot more down the road because you didn't know what you were getting into.

You will also need to consult a lawyer if you will be dealing with a significant amount of money, are incorporating or are in a partnership.

Q: Do I need an accountant?

A: If you're starting a home-based business, there's a good chance you can save some money and do your own accounting. Some wonderful accounting programs let you do it on your computer. You can also keep track of your expenses and income on paper. If you stay very organized, you'll be OK.

If you absolutely hate paperwork or turn green at the mere thought of accounting, consider seeking out someone who enjoys it.

Q: Do I need insurance for my home business?

A: Most homeowners insurance will not cover a home business. Talk with your insurance rep. Your needs will vary depending on the nature of your business and whether you will have clients in your home.

RESOURCES YOU CAN USE

Small Business Administration
http://www.sba.gov
800-827-5722

Service Corps of Retired Executives (SCORE)
http://www.score.org
800-827-5722

The SBA's Online Women's Business Center
http://www.onlinewbc.org

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Liz Folger is Work-at-Home Mom Expert and author of, "The Stay-at-Home Mom's Guide To making Money". Her book is available at your favorite bookstore or by calling, 800-632-8676. Liz has also created a resource site for work-at-home moms at: http://www.bizymoms.com. When you visit don't forget to sign-up for the free e-newsletter just for moms who work from home. If you have a question that you'd like covered in a column, e-mail her at: [email protected].