1. Home-based Business Legal Issues Stephen R. Cook, Esq. Stephen R. Cook, Esq. Asst. Clinical Professor of Law University of Akron School of Law University of Akron School of Law scook@uakron.edu scook@uakron.eduscook@uakron.edu 330-972-2358 330-972-2358

2. Why a business? Make a profit Make a profit Participate in management of business Participate in management of business Liability protection from business obligations Liability protection from business obligations Recognition as a business Recognition as a business Structure Structure

3. Entity Selection Sole Proprietor Sole Proprietor Partnership Partnership LLC LLC Corporation S/C Corporation S/C

4. Entity Selection Liability Liability Ease of formation Ease of formation Formalities Formalities Organization Organization Dissolution Dissolution

5. Entity Selection Secretary of State Secretary of State Name selection Name selection Proper form Proper form Statutory agent Statutory agent Filing fee Filing fee Charter number Charter number

7. Liability Insurance – Business Owner’s Policy (“BOP”) Insurance – Business Owner’s Policy (“BOP”) Premises/product liability Premises/product liability Secondary market insurance Secondary market insurance Aggregate, per-occurrence Aggregate, per-occurrence Umbrella policy? Umbrella policy?

8. Taxation Sole Proprietor – Schedule C Sole Proprietor – Schedule C Single member LLC – Schedule C Single member LLC – Schedule C Multiple-member LLC – Partnership taxation Multiple-member LLC – Partnership taxation “Flow-through” taxation “Flow-through” taxation S Corp. v. LLC – distributive share S Corp. v. LLC – distributive share EIN number EIN number

9. Vendor’s License Vendor’s or Service vendors license? Vendor’s or Service vendors license? Ohio Department of Taxation Ohio Department of Taxation http://tax.ohio.gov/divisions/sales_and_use/index.stm (TOC for Sales and Use tax) http://tax.ohio.gov/divisions/sales_and_use/index.stm (TOC for Sales and Use tax) http://tax.ohio.gov/divisions/sales_and_use/index.stm Check your local taxing jurisdiction Check your local taxing jurisdiction Better safe than sorry Better safe than sorry

10. Zoning Check local zoning office for home occupation variance Check local zoning office for home occupation variance Understand specifics of code Understand specifics of code Variance usually based on % of business sq. footage, limited signage, no effluent and limited stress on public infrastructure Variance usually based on % of business sq. footage, limited signage, no effluent and limited stress on public infrastructure Lawful purpose Lawful purpose No right to home-based business variance No right to home-based business variance