Do I Need To Get Licensed For Cake Decorator In Virginia???

Business By sunnyrise Updated 12 Mar 2009 , 7:57pm by bekahzzz

sunnyrise Posted 25 Feb 2009 , 2:56pm
post #1 of 49

Hi,

I am really confused with the regulations to start a home-based cake decoration business in VA.
What is the procedure to start the business?
Do I have to register and retrieve a license?
Do I need to contact the health department?
Can I advertise my work even if I dont have a license?

Oh my... I really need help.icon_smile.gif

Looking forward to hearing from you....

Thanks

48 replies
TracyLH Posted 25 Feb 2009 , 3:03pm
post #2 of 49

I am going through the process to get legal here in VA (cookies) and have a ton of info (license, inspection, zoning, etc). Let me find that and I will post soon.

TracyLH Posted 25 Feb 2009 , 3:18pm
post #3 of 49

Okay, here we go! First of all, this is information that I have gathered in my quest to get legal to operate out of my home. You need to look at two main things - regulations regading operating out of your kitchen and running a business out of your home (not a biggie). Others will have great info for you, but by my understand, you cannot/should not advertise if you are not legal.

I am in Fairfax County and don't know where you are, but I am including the info for my county. Yours might be different (I think Fredericksburg has different rules for zoning. They may have to pay a fee to operate a business in a residential area). Here is what I have:

Dept. of Agriculture: 800 552-9963 As I recall, you can ask for Dairy and Foods. Everyone I have spoken to is really nice and they will send you a handy-dandy packet that you will fill out and send back. Here in FFX county, once they receive your my packet, it is 14 21 days before the inspector will call and then they come out in the next few days.

Zoning: You will need to check zoning regulations for having a home-based business. Each county is different. Here in FFX, as long as nobody comes to the house to pick up cookies (which will be my case), there is no issue. They told me it is mainly parking they are worried about. I need to fill out a Home Occupation Permit which is free and can be done on-line. Here is the link to what the FFX county application looks like:
www.fairfaxcounty.gov/dpz/forms/homeoccupation.pdf
application: www.fairfaxcounty.gov/dpz/zoni.....pation.htm

Following is the number for my county's zoning office. If you can't find your county's info easily, perhaps you can call them and they can direct you to yours (hey, you never know!): FFX County Zoning Office 703-222-1082. But remember that I am not having customers come here to pick up or that would be another matter and this is just how it works in FFX. I will deliver to them, but I plan to be small and mainly in the immediate area. I know in Fredericksburg it costs something like $325 - 375 for zoning if you are in a residential area and are conducting a home based business.

Business License: If you need this info, here in FFX if you plan to make less than $7,00O there is no need to get a business license. I expect to fall into that realm. Here is the number for FFX (again, maybe they can direct you to your area if you have trouble finding it): 703-222-8234

Registering a business: If you need it, here is the info on registering a business in FFX: 703-246-4100. It is $10 and here is a link to what the form looks like here in FFX: http://www.fairfaxcounty.gov/c.....CR-140.pdf

Taxes: I am still figuring out how much state and local taxes will be as that will really determine if I can do this or not. Here is a start for those, if you need them:
VA State Tax Dept. - I started here: (804) 367-8031
Here is a link to the tax form I am using to figure that out: www.tax.virginia.gov/taxforms/.....ctions.pdf
You will need to collect tax on what you sell, but if you have it packaged, it is less than if not. You send in what you collect throughout the year, not just at the end. I've heard to send in the slip even if you don't sell anything in that time period and don't slip up as it can cause a headache.

Federal Tax Dept (i.e. - the IRS) - Okay, they were so nice and are really trying to help me figure this out.
IRS 800-829-4933 (or 800-tax-1040, press 3, then 2)

My concern is figuring how much taxes I will pay and if it will be worth it as my cookies are really time-intensive and potentially making $2/hour after taxes isn't too good. To figure out how much tax you would pay, ask to talk to someone in Tax Law for Self-Employment. They can also give you info about SS and Medicare payments which is covered under Self Employment Tax. Keep track of everything, cost of ingredients, miles on the car, etc, etc.

Hope this helps! It is likely more than you need, but I thought I would post it in case you or somene else could use it and, hey, I am knee-deep it in right now! Hope it helps!

Best of luck on your venture!

gingersoave Posted 25 Feb 2009 , 3:21pm
post #4 of 49

I would like to know the info too! I already have a web site with all my cakes. I have a couple of students that just got their license here in Virginia Beach. I should ask them too.

thanks for the info. I know they had to get their kitchen inspected, go to the court house to get their license etc....

ginger

TracyLH Posted 25 Feb 2009 , 3:31pm
post #5 of 49

Hey, Ginger! Nice to see you again! I will look to see what you find out with your students. I am not complete in my process, so that will help. We may have a move to Norfolk, so that would give me an idea of the regulations there. Thanks!

costumeczar Posted 25 Feb 2009 , 3:33pm
post #6 of 49

There are a few threads on here already about Virginia licensing, if you do a search you'll find more info.

If you're selling things in Virginia you need to pay sales tax to the state, and to do that you need to get an Employer ID number from the IRS. To get that, you need a business license, as far as I know. I just converted from a sole proprietor to an LLC, and I needed all of that information.

I'd go ahead and get a business license even if you don't think that you'll be making the income, it just makes everything easier in the long run. It doesn't cost anything to register a business if your income is below a certain level, and it will register your business name when you get your license. It also looks better for you if you can tell clients that you're licensed.

I'd also suggest registering as an LLC from the beginning, because if you do decide to convert like I did it's a pain in the butt. You have to go through the whole thing again for the "new" business. If you're a pass-through entity type of LLC you can jsut do your business taxes alogn with your personal income taxes, so it isn't like you need special accounting. You just need to make sure to keep everything separate, personal from business.

gingersoave Posted 25 Feb 2009 , 3:34pm
post #7 of 49

Hey Tracy! Thanks for all that info!!! I just emailed my student, she literally just got back from the court house with her new business license. She has increased her cost of cakes b/c of the taxes, so what was once a $75 cake is now $100. I just don't know if I want to go thru all that and then have to pay taxes too......but to stay legal I may have to go that route, especially since my husband works for an insurance company (USAA)!!!!!

thanks again for the info, give a big wave to all my pals in Fairfax!!!

TracyLH Posted 25 Feb 2009 , 4:22pm
post #8 of 49

Costumeszar - Oh, thanks for bringing up the part about the LLC!!! I totally forgot to mention that! I also need to put that on my 'to-do' list as well! Thanks for your thoughts on the license even thought I wouldn't make that much- very good point and much appreciated!

Ginger - I agree about the tax part. I was floored when I saw how much it all was, but alas, it is what it is. My DH says we just have to record everything and a trip to the store to buy supplies needs to be recorded as miles. I am still weighing what I will do especially with the thought of moving. My fingers crossed that we get Norfolk! It would be fun to have a 'cookie playdate' with you! I may have to sign up for one of your classes should I ever venture into cakes! You do amazing work!

gingersoave Posted 25 Feb 2009 , 5:10pm
post #9 of 49

Thanks Tracy (and all others), very good info!!

Tracy, I may be gone by the time you get to norfolk, my husband works for USAA and they just closed their office of 1100 people, my husband will remain here with the other 500 claims staff but who knows for how long, rumor has it another year. We don't want to move but sometimes ya can't make that decision especially with an economy like now. But definitely look me up, I'll always be on CC and if we are here I'll be at Michaels hilltop. I teach cookie classes too!!! Cookie bouquets and how to ship them!!! I'm sure you already know all that, maybe we could teach a class together icon_smile.gif

thanks again everyone!!!

TracyLH Posted 25 Feb 2009 , 5:24pm
post #10 of 49

icon_cry.gif I told myself that if we had to move to Norfolk, at least I already had a cookie friend there! We could have had fun - especially after reading about your chocolate martinis a while back! Best of luck to you! You are right about the economy. DH is deciding whether to stay in or get out. Scary timing. Fingers crossed for you! Hopefully we will cross paths at some point. I am sure you have the cookie class well covered, but I would take a cake class from you in a heartbeat!

thems_my_kids Posted 25 Feb 2009 , 6:08pm
post #11 of 49

So Tracy, where are you in VA now?

TracyLH Posted 25 Feb 2009 , 7:00pm
post #12 of 49

Fairfax County - near Manassas. Where are you?

thems_my_kids Posted 25 Feb 2009 , 7:05pm
post #13 of 49

I'm in the Shenandoah Valley in Page County.

TracyLH Posted 25 Feb 2009 , 7:05pm
post #14 of 49

Oh, that is a gorgeous area! icon_smile.gif

rana_cis Posted 25 Feb 2009 , 11:34pm
post #15 of 49

Thank you very much ladies! this is really helpful.
Tracy you are amazing with all of this resourceful information.
costumeczar, Thank you for bringing the subject of ownership, this is going to be in my searching list too.
what is the different of getting registered and licensed, is it the same, do I have to get both?
I have a lot of homework to do, I am trying to find the start point icon_smile.gif
Thanks again everyone!!

pinkpiggie78 Posted 25 Feb 2009 , 11:52pm
post #16 of 49

Definately do your own research... every area can be a little different. Unfortunately, no one can REALLY give you a run down of what you need to do... as usual with "red tape" everyone will give you a different story.. at least when it comes to the order in which you need to complete things. I do have some of those other VA threads bookmarked if you are interested... that is how I figured out at least WHAT I needed to do... but the order seems to vary.

costumeczar Posted 26 Feb 2009 , 1:03am
post #17 of 49

When you get a business license you register the name of the business with your name as the contact person, under a "doing business as" (DBA) name. I had to do a name search when I first started to make sure that nobody else was using the name, and when I incorporated they did another search. If someone's already using the name in the state you have to choose another name.

If you don't get a business license then I don't know if you have to register the name somehow. If you don't register the name then someone else could come along and start doing business with the same name if they register it first. That would get into a legal mess while you try to sort out who has the right to the name, given that you had it first without a business license, but they had it registered legally...I don't know the answer to that one, you could check with your county registrar.

I just don't see the point of NOT getting a business license to start with, given that it doesn't cost anything and so many other tax/legal issues that you'll be dealing with need a license to get the federal numbers for your sales tax. When I pay state sales tax online they require your Federal Employer ID number to register an online sales tax account, and the IRS needs a business license number to get the FEIN. It's all a roundabout paperwork mess...

pinkpiggie78 Posted 26 Feb 2009 , 2:03am
post #18 of 49

Spotsy County does not give business licenses to those doing less than $250,000 worth of gross sales... and over that you pay a percentage of your sales.

I am not exactly sure what costumeczar is talking about when he refers to a business license and the FEIN. The first thing I did, after I registered my business name with the State Corp Comission was apply for my FEIN online (I did both the same day). No numbers were required for that... but then again I don't have any employees, so that might make the difference. Pretty much anyone can apply for a FEIN in 10 minutes online.

As for the whole DBA thing... after I got my letter from the State Corp Com that I have my business name, I had to go register my fictious name with the County (aka my business name) and then send a copy of that back to the State Corp Commission.

PoodleDoodle Posted 26 Feb 2009 , 3:19am
post #19 of 49

Hey Ladies, I'm in Fairfax Station, VA. Got my packet from the dept of agriculture. One of the requirement is having a private water well tested. Guess what -- My well was condemed by the county so I'm getting a new well drilled. Cost will be $15,000 and up depending on how deep it has to be. Drilling began this past Tuesday - my yard is a muddy mess and today the casing they put in the ground broke and they had to pull it out. Who knows how long this will take.

I have my packet complete to submit to Dept of Agri so I just hope it doesn't take too long for them to come out to inspect my kitchen.

Question for those licensed -- The packet mentions Labeling -- Did you have labels created with the ingredients and measurements and weights.

I'm not planning to make a living at this. I just felt that because I was selling cakes I should be legal.

Thanks again for the info on FFX co.

costumeczar Posted 26 Feb 2009 , 3:37pm
post #20 of 49

My mistake about the FEIN, then...When I did it I entered all of my numbers, but maybe they let it go through without some information.

The label issue is one the you'll get different answers on depending on who you ask, but I did a cake for one of the health department officials who works in this area. She said that there's an exemption for food that's delivered by the person who made it, like wedding cakes would be. If you have the opportunity to speak to the client who's buying the cake, and answer questions they have about the ingredients, then you don't need labelling. The inspector told me that it's a good idea to list any allergens that are in the food and leave it with the cake, but you don't need a formal label. I put a list of allergens on the serving charts that I leave at the venue, then if the person who's cutting the cake has questions from guests they'll have the answers (if they bother to look at my list) icon_smile.gif

If you're selling things at a farmer's market or another situation like that, where you won't necessarily be there and the food is packaged, then you need labels.

cas17 Posted 28 Feb 2009 , 2:57am
post #21 of 49
Quote:
Originally Posted by pinkpiggie78

Spotsy County does not give business licenses to those doing less than $250,000 worth of gross sales... and over that you pay a percentage of your sales.

I am not exactly sure what costumeczar is talking about when he refers to a business license and the FEIN. The first thing I did, after I registered my business name with the State Corp Comission was apply for my FEIN online (I did both the same day). No numbers were required for that... but then again I don't have any employees, so that might make the difference. Pretty much anyone can apply for a FEIN in 10 minutes online.

As for the whole DBA thing... after I got my letter from the State Corp Com that I have my business name, I had to go register my fictious name with the County (aka my business name) and then send a copy of that back to the State Corp Commission.




pinkpiggie78: did you have to find a registered agent when you did your application to the state corporation commission? i am in the process of trying to become legal in gloucester and it's very confusing. i have been inspected and passed from health dept. i filled out the zoning papers--no customer traffic to my home. then i went to register my name and city said if LLC go through state corp commision. well, that's $100 to file, $125 for this registered agent then i have to go back to my city commisioner's office for my business license, $50 then i have to go get insurance, more $$ that i don't have! it would be cheaper and faster to be sole proprietor. just don't know what i should do!

pinkpiggie78 Posted 28 Feb 2009 , 2:53pm
post #22 of 49

I am my own registered agent.... just paid the $100. I too wanted to just be a sole prop to make my life easier, but after going for some business counseling, I decided it was safer for my family to be a LLC. I know about all the costs... I think it will be close to $500 excluding insurance for me to get all set up with all the fees. I haven't looked into CPL insurance yet, but I assume it will be at least $500 a year. I would rather shell out $1000 a year than get sued for personal assets.

cas17 Posted 28 Feb 2009 , 3:30pm
post #23 of 49
Quote:
Originally Posted by pinkpiggie78

I am my own registered agent.... just paid the $100. I too wanted to just be a sole prop to make my life easier, but after going for some business counseling, I decided it was safer for my family to be a LLC. I know about all the costs... I think it will be close to $500 excluding insurance for me to get all set up with all the fees. I haven't looked into CPL insurance yet, but I assume it will be at least $500 a year. I would rather shell out $1000 a year than get sued for personal assets.




thank you for then info! so you (i) can be your own registered agent? i thought it had to be a lawyer. maybe i read instruction sheet incorectly?

pinkpiggie78 Posted 28 Feb 2009 , 3:38pm
post #24 of 49

Apparently so... I filled out my State Corp Commission application with the local Small Business Development Center and I was the registered agent. No lawyers here... which was one thing I definately didn't want to have to deal with.

I just wish I would hear back about my kitchen inspection!!! The gentleman told me 2-3 weeks from the time they receive my packet... it will be 3 weeks on Tues and I haven't heard a peep.

cas17 Posted 28 Feb 2009 , 3:57pm
post #25 of 49

i guess i will call SCC on monday to see if i can be my own registered agent as on the instruction page is says "the limited liability company may not serve as its own registered agent". it even said on their website to go online and do a search for va registered agents which i had a few companies came up but at $125/year.

yes i agree 100% with you that i do not want to risk my family's home and assets but this is frustrating and expensive! : (

pinkpiggie78 Posted 28 Feb 2009 , 4:03pm
post #26 of 49

I hate legalise, but I think that might mean the LLC or S Corp, C Corp, etc can't be the registered agent, but you as the owner, who is not the LLC, can be the agent of the LLC

blueydmom2004 Posted 8 Mar 2009 , 4:03am
post #27 of 49

I have 2 questions that may sound really dumb...but what is an LLC? And I'm currently looking into starting a home business in near Blacksburg, VA in Montgomery County. My other question is what did you all do to determine if you had enough business to start with. I've done many cakes for my close friends and family but not any outside that circle. I'm kinda afraid to do any kind of "advertising" (leaving business cards and flyers) because I'm worried about getting caught and fined. I've been told one of those stories about a friend of a friend of a friend about someone in the area getting in trouble for not getting licensed and inspected. Sorry if these are kinda silly questions.

costumeczar Posted 8 Mar 2009 , 12:30pm
post #28 of 49

An LLC is a Limited Liability Corporation, which basically means that the business is separate from your personal finances. You can go to the irs.gov website, or to legalzoom.com for explanations of different business organization options.

If you do an LLC and you're the only partner in the corporation, you can still do your income taxes on your personal tax forms using the Schedule C for business that you'd use if you were a sole proprietor. You'd be filing as a pass-through entity, but filling out a couple extra worksheets, no big deal. The benefit is that if someone sues you for something cake-related, they sue the business, not you personally. It just gives you a little more protection than a sole-proprietorship does. (Although I'd guess that if someone wanted to sue you they'd be able to find a lawyer who could sue everything they could find.)

If your county requires a business license I'd just go ahead and get one, why not? It doesn't cost anything and it will make you feel less nervous. And I do know of one caterer (I probably mentioned this before) whose hobby is to go around and turn in unlicensed food vendors. He's the father of a kid in my daughter's class, and I've had conversations with him where he's told me about striking up conversations with people in line at Sam's, getting their business cards, then turning them in. He also showed up at a cooking school I teach at and quizzed the owner "casually" about whether he was selling food and if he needed a license to do it. You could tell he was trying to find out if there was something worth turning in! (He gets a percentage of the fines and back taxes that the state collects for turning these people in, so that's why he does it.)

pinkpiggie78 Posted 8 Mar 2009 , 2:11pm
post #29 of 49

I will take the enough business question, since costumeczar answered the LLC part very well.

For me, I decided that it wasn't a huge investment for me. Just to pay all the registration fees, it would be about $500. I figured I would buy equipment and ingredients as I went along. Since I am STILL waiting for them to inspect my kitchen, I haven't been able to hand out anything, but with friends and family, I have already done up to 4 cakes a month. For me it was more about deducting my tools, pans, classes, etc. I figure I won't make back what I put into it, for about two years (I only do it part-time... I will only allow two cakes per weekend, unless someone wants a Sunday pickup).

niccicola Posted 8 Mar 2009 , 2:24pm
post #30 of 49

I am in Roanoke City, so I can only speak for what I have done....

We called the Dept. of Agriculture and we were told by a very informative person that as long as we do not sell any goods that would require refrigeration, we do not have to be inspected-otherwise, it falls under Health Dept. We called the State Corp. Commission and did a name search for the business name I wanted. It was available, so we downloaded and filled out a form that I had to sign and return with $100. A week later I got a certificate saying I can do business under that name. Went to the clerks office, courthouse, then back to the clerks office which totalled $50 for the business license, and $10 for some other random fee.

At this point, I do not need to be inspected as long as I follow the rules of owning a business out of home-basically, I can not operate as a storefront. No customers can come to the house, no signs outside in my yard because I am zoned residential.

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