Just simply being operating an online business doesn’t qualify as an internet-based business. Numerous businesses are typically required to acquire licenses based on state, local, and national regulations. Your state’s regulations are made up of a number of different categories of licensing, none of which are directly applicable to internet businesses. For instance, you will likely need a business license if you were to open a day spa. In addition, a massage therapist must hold a certificate of education from a school that has been accredited through a state board. These two examples are just a few examples of how your specific state may regulate various industries.
Although the above is a generalization, there are still principles that are universally applicable. One of these is business ownership. You are required by law to own a portion of any business that receives revenue from the sale of products or services. If the majority of your revenue comes from direct sales, then your ownership is considered a direct sale, therefore it will require a sales tax license.
Another principle that applies to home-based businesses is zoning. Zoning is the regulation of how property is used within a community. It is not only applied to residential communities but to commercial ones as well. In order to operate a home-based online business, you must abide by certain regulations regarding building restrictions, access to water, fire hazards, etc. In order to save time and avoid unnecessary red tape, always contact your local zoning office beforehand. It is not uncommon for some localities to take months to issue business permits.
A third regulation that applies to online business licenses is copyright. Every form of intellectual property must be licensed for circulation. This includes computer software and designs, among others. If you want to set up a home-based online business, you are required to have an agent who will represent you throughout the legal process. As an added precaution, you should always purchase and register any equipment, materials, or items with the city you live in before being able to begin using them.
The fourth regulation that pertains to online business is the Anti-Gambling Act. This legislation was created to prevent online poker sites and other gaming websites from facilitating transactions for gambling purposes. As an example, an online poker site could conceivably force customers to upgrade their membership in order to gamble online. If an online business operates in a state like Ohio, the law may prevent e-commerce companies from processing credit card payments for this purpose. Therefore, it is imperative that your company has a separate payment processor that processes payments for Ohio residents.
The fifth and final regulation to apply to any e-commerce business relates to the protection of intellectual property rights. There is some confusion about whether the term “intellectual property rights” is legally defined as part of a business or not. Some courts have held that there is a way for an e-commerce business to benefit from intangible assets, such as trademarks, logos, titles, and other traits associated with your brand. However, it is important to note that these assets do not have to be tangible. For instance, a logo and a set of text on a website are not considered intangible assets, but a trademark would likely be.
Finally, you may need to consult with your local government to register your home based online business with sales tax. In some cases, if you use a home address for your business, you will be required by law to register your business with sales tax. Other states, such as New Hampshire, have less restrictive laws when it comes to registered home businesses. Regardless of where you live, you should ensure that you have any zoning or business license applications updated, or that your local municipality has received notifications of these filings. If you do not update your zoning or business licenses, you could be in violation of your state’s laws at the end of the year if you have not filed your registration or extensions.
While it may seem more complicated than a traditional brick-and-mortar storefront, starting a home-based internet business can be very rewarding. In fact, it may be necessary for some entrepreneurs to seek out assistance from a professional to help them navigate the many hurdles that they may need to overcome in order to become profitable. As you begin your search for an expert to help you get started, be sure to ask about their experience in setting up home-based internet businesses. They should also be willing to show you examples of their work if you are interested.