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Priyanka Bajpayee
| Updated: 02 Jun, 2022 | Category: Startup India Registration

Different Licenses Required for Home Based Business

Home Based Business

Any person wishing to start Home Based Businesses are often eager to get started that they forget to get all the requisite licenses to operate a business legally. Running a Home Based Business requires well worth the time and investment to ensure that all your business licensing is in order right from the start. However, licensing, permit, and regulations vary from one state to another, so it’s essential to check the license and permits required to be obtained. Here are a few things that you need to know about this business.

With the increase in the widespread use of the internet, everyone is now planning to become an entrepreneur[1] and start their own business from the comfort of their own home. To start a Home Based Business, all you need is a bright idea and the ability to work long hours.  Anyone from amateur writers to home bakers will be able to supplement their income through such businesses. If you think you can provide a product or service that consumers can enjoy, you can start working on your business plan.

Legal Implications for Home Based Business 

The main hurdle with starting a Home Based Business without a license is that a person will face fines and possible legal implications if caught. Due to the potential risk, it’s essential to learn the legal requisites for running this business in your city, state, or country.

  • Business License: Any business, including Home Based Businesses, must obtain a local city or country business license. A business license is a basic license that allows the holder to engage in business activities within the local jurisdiction. If your city doesn’t have a specific business licensing department, you can get the basic info on getting a basic business license at your local tax office.

Additionally, to get a general business license, it is essential to ensure that your business follows the local zone rules and regulations. In addition, one must consider that when you apply for the license in other cities, you are required to double-check with the city zoning department.

  • Professional License: Few Home Based Businesses require state or federal professional licensing. This includes businesses like 
  1. Daycare, 
  2. Salon services, 
  3. Legal or financial services or Advisory services. 

The best way to ensure that you get a proper checklist is to reach out to the state business office. Also, you can visit the official state website to get the details of all businesses that require professional licensing.

  • Safety License: Depending on the Business type you wish to operate, you may require an inspection and permission from the local fire department. This is commonly needed if clients come to your home to conduct business or take services. Usually, it’s not necessary to get a safety license unless you keep an inventory of potentially flammable products in your Home Based Business.

However, if we talk about, Environmental licenses, these licenses are less common for Home Based Businesses. Generally, these permits are required for businesses engaged in the wholesale or retail sale of food and beverage products. In these kinds of businesses, it’s important enough to check with state environmental protection agencies to inquire if your business requires any environmental inspection or permit.

  • GST Registration: A business involved in selling any kind of goods and services should obtain GST before remitting or collecting the tax. Though it is typically a part of a general business license, make sure that you have this before you start operating your business.
  • MSME Udyog Aadhaar Registration: MSME Udyog Aadhaar Registration is a project of the government of India initiated by the Ministry of MSME. The primary objective of this registration is to simplify the enrolment procedure for entrepreneurs. Also, it offers various discounts and incentives to enterprises to facilitate ease of doing business.
  • Import-Export Code: To be authorized to do business outside India, the company must obtain an Import Export Code. To get this Code, the company must have a PAN and a current account with a bank.

FSSAI License for a Home Based Business

In recent times, Home Based Business has been a prevalent business model. The reason why this business is getting famous is because of the low initial investment and adaptability. However, before running a home-based food business, it is mandatory to get FSSAI licenses in order to comply with legal requirements. The FSSAI license differs according to the nature and size of the home-based food business.

Any food business operator in this business who manufactures, processes, stores, distributes, or sells food products is required to obtain an FSSAI License. This license is a 14-digit authorized number that reflects on all products’ back packaging. In addition, the 14-digit identification number contains details regarding the assembling condition and the manufacturer’s permit. This FSSAI License process is intended to increase the FBO’s responsibility for food safety. The Licensing process and requirements for food licenses are administered by the Food Safety and Standards (Licensing and Registration of Food Businesses) Regulations, 2011. The FSSAI licensing depends on the size of the business and the location of the premises.

Conclusion

Various incidents exist of numerous businesses collapsing due to non-compliance with legal laws and legislation, resulting in massive fines and legal action. This also stops the growth of the Home Based Business, forcing the entrepreneur to close the business. That is why it is advisable to obtain the appropriate license in the most suitable way to begin a Home Based Business.

Read our Article:Legalities to Start a Candy Business in India

Priyanka Bajpayee

A Company Secretary together with PG in international Business, she has gained significant experience as legal content writer. She has keen interest in doing research and writing on legal and financial subject matters. She also holds work experience in legal compliances.

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