What Do I Need To Do To Legalize My Business?

Business By RGWATERSLIDE Updated 15 Aug 2010 , 11:59pm by PiccoloChellie

RGWATERSLIDE Posted 12 Aug 2010 , 7:26pm
post #1 of 18

I HAD ALREADY STARTED MY BUSINESS AS A CAKE DECORATOR WORKING OFF OF FACEBOOK AND PASSED OUT A FEW BUSINESS CARDS THAT I HAD MADE MYSELF. I DIDNT THINK IT WOULD BE BOOMING THIS FAST OMG. SO WHAT I WANT TO KNOW IS HOW CAN I MAKE IT LEGAL TO RUN MY BUSINESS OUTSIDE MY HOME HERE IN MARYLAND. I ALSO LIVE IN A APARTMENT TOO I WAS TOLD THAT WOULD MAKE A DIFFERENCE AS WELL. CAN SOMEONE HELP ME THANKS A MILLLION

17 replies
Loucinda Posted 12 Aug 2010 , 8:17pm
post #2 of 18

RG - welcome to CC! First, call your state Dept. Of Agriculture. (that is who is in charge here in Ohio) you also need to call your local health dept. They will both have the information you need for YOUR state.

And, you may want to check your computer, your post is in all capitol letters - don't know if you know this, but that means your are YELLING! icon_biggrin.gificon_wink.gif

RGWATERSLIDE Posted 12 Aug 2010 , 8:54pm
post #3 of 18

THANKS AND ABOUT THE CAPS IVE BEEN TYPIN THIS WAY FOR YEARS LMBO IT A TERRIBLE HABIT I HAV PPL SAY THAT ALL THE TIME...BUT THANKS AGAIN thumbs_up.gif

jason_kraft Posted 12 Aug 2010 , 11:06pm
post #4 of 18

I would try to break that caps habit ASAP, especially if you plan on communicating with customers via e-mail -- it's not very professional to send out business communication in all caps.

In addition to the advice above, you will also want to get liability insurance, and seriously look into forming an LLC to protect your personal assets.

Motta Posted 12 Aug 2010 , 11:12pm
post #5 of 18
Quote:
Originally Posted by jasonkraft

I would try to break that caps habit ASAP, especially if you plan on communicating with customers via e-mail -- it's not very professional to send out business communication in all caps.

In addition to the advice above, you will also want to get liability insurance, and seriously look into forming an LLC to protect your personal assets.




I agree with all of the above. Be a professional right from the start and you'll stand out from the crowd. Congrats on the high demand!

RGWATERSLIDE Posted 13 Aug 2010 , 11:59pm
post #6 of 18

ok thanks alot thumbs_up.gif

RGWATERSLIDE Posted 14 Aug 2010 , 12:02am
post #7 of 18

oh and at jasonkraft where do I should i purchase liablity insurance from i found where i can get the LLC from is it from the same place?

jason_kraft Posted 14 Aug 2010 , 12:30am
post #8 of 18

Before you can get liability insurance, you'll need a business license, which should be available from your city/town.

You can purchase liability insurance from any number of commercial insurance providers. I would start by contacting your current insurance agent, if your current company does not provide commercial liability coverage they should be able to refer you to another company that does.

LLCs are set up through your state. Several companies can help you set one up, I recommend LegalZoom:
http://www.legalzoom.com/llc-state-requirements/maryland-llc.html

Mama_Mias_Cakes Posted 14 Aug 2010 , 11:38am
post #9 of 18

Before you spend money on your LLC and insurance, according to this link Maryland does not allow home baking businesses. I would definitely call your Department of Agriculture or local health department to follow up on that before you do the other two things.

http://cakecentral.com/cake-decorating-ftopict-586218.html

tokazodo Posted 14 Aug 2010 , 12:15pm
post #10 of 18

Mamma_Mias_Cakes is right.

There was a group on Facebook who tried to present a bill in Feb but it was voted down.
Idk if you would be interested in this group or not.

http://www.facebook.com/pages/We-support-the-2010-Maryland-House-Bill-to-legalize-Home-Based-Bakers/310759830072

jason_kraft Posted 14 Aug 2010 , 3:16pm
post #11 of 18
Quote:
Originally Posted by Mama_Mias_Cakes

Before you spend money on your LLC and insurance, according to this link Maryland does not allow home baking businesses.



OP is asking how to run a legal business outside her home.

Presumably she is already looking for commercial kitchen space to purchase or rent.

Mama_Mias_Cakes Posted 14 Aug 2010 , 10:31pm
post #12 of 18
Quote:
Originally Posted by jasonkraft

Quote:
Originally Posted by Mama_Mias_Cakes

Before you spend money on your LLC and insurance, according to this link Maryland does not allow home baking businesses.


OP is asking how to run a legal business outside her home.

Presumably she is already looking for commercial kitchen space to purchase or rent.




It's a bit confusing as she also mentions that she lives in an apartment and that would effect things. Which that would only be an issue if you want to bake at home.

cdgleason Posted 14 Aug 2010 , 11:02pm
post #13 of 18

WOW!!! that's so exciting that you're doing so well in such a short time!!
Congratulations!!

When you say working "outside your home"... does that mean you're getting a kitchen that is approved by the health department and all other agencies in your area??

when trying to give you the BEST advise, it's nice to know if you're planning to work 'from your home kitchen' OR... by saying " working outside your home" you mean that you will be in a commercial kitchen space....
does that make any sense?? *~*

I live in a state that DOES NOT allow home based food business... period!! it doesn't matter what we're making, unless we want to fully equip our home kitchens in accordance with all of the health department regulations, and any other business that wants to have a say in a home based business... it's strictly prohibitted!! ( don't know if I spelled that right, but you get what I'm saying!)

RGWATERSLIDE Posted 14 Aug 2010 , 11:37pm
post #14 of 18

@ cdhleason i apologize i meant working from my kitchen

jason_kraft Posted 14 Aug 2010 , 11:51pm
post #15 of 18

If you are working from an unlicensed home kitchen, I wouldn't accept another dime until you are in a licensed baking facility. If someone gets sick from a cake you sold that was baked in an unlicensed home kitchen, you could be on the hook for their medical bills and potentially significant punitive damages.

Getting a licensed facility is your #1 priority, since you won't be able to do anything else legitimately until you get your inspection certificate.

Lorraine25 Posted 15 Aug 2010 , 12:21am
post #16 of 18

RGwaterslide; from where in Maryland are you? I lived in Southern Maryland (St. Mary's County) and my best friend and myself took classes with hopes to open our business, I had to leave due to my husband job but my friend stay to make her business official she lived on military housing and got the big OK to start her business from Military Base Commander since she was in military housing but needed to get also state license thats when everything stop because they told her that she needed an oven that cost 5,000!!! that she cannot put in the house (due to military regulations) Make sure you dig in very well every information and double check just to be safe, some of the classmates said if you make less than certain amount a month you dont need license but again you better be safe you never know what kind of customer you might get that try to take down your business, but like I said go and double check EVERYTHING!!! Best wishes! God bless icon_wink.gif

RGWATERSLIDE Posted 15 Aug 2010 , 8:03pm
post #17 of 18

icon_eek.gif WOW YOU GUYS ARE SCARING ME NOW
@ LORRAINE25 I LIVE IN BALTIMORE CITY/COUNTY U MITE SAY

PiccoloChellie Posted 15 Aug 2010 , 11:59pm
post #18 of 18
Quote:
Originally Posted by RGWATERSLIDE

icon_eek.gif WOW YOU GUYS ARE SCARING ME NOW
@ LORRAINE25 I LIVE IN BALTIMORE CITY/COUNTY U MITE SAY




You've received some good advice.

Selling cakes baked in your home isn't allowed in your area.
Yes, there's the risk of someone getting ill and suing. There's also the risk of Health Dept fines, city tax assessments, county tax assessments, state tax assessments, and (IRS) federal tax assessments. They all want their piece of what you're selling, and if you're "caught" selling anything without proper licensing and tax forms the tax folks can (and WILL) kindly estimate what they feel you owe them. They estimate rather high and if they're in a bad mood you could be looking at what they call tax evasion. That carries additional fines and a possible jail sentence.
It sucks, but you've got to report your income from selling cakes on the state and federal level, plus collect and pay on any applicable sales tax for the state/county/city, plus there may be additional reporting for income taxes on the county/city level.

Yes, the IRS and state tax authorities do go after people for this.
http://articles.dailypress.com/2010-08-05/news/dp-nws-back-taxes-20100805_1_morgan-and-henretty-business-income-taxes
http://njtoday.net/2010/02/09/union-man-admits-failing-to-report-income-from-tax-preparation-business/
http://www.in.gov/dor/reference/legal/rulings/pdfs/04970181lof.pdf (PDF)

Only you can determine if the potential risk is worth it.

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