For those in Virginia I looked up the vda rules governing home baking business. Just FYI. There is a whole lot of arguing going on but not a whole lot of information posting so I figured it wouldn't take more than a minute to copy and paste. Of course this is only valid information for those in Virginia. Google is a wonderful tool
Location of a Home-Based Bakery
The Virginia Department of Agriculture and Consumer Services (VDACS) has the authority to see that clean and wholesome bakery products, such as cakes, breads and cookies, are prepared under proper conditions. Although a license is not required for a home-based bakery, VDACS must inspect the facility that you intend to use. A separate kitchen is not required, but the products and ingredients must be kept separate from those used by your family. VDACS will need formulations (recipes) of the products that you intend to prepare as well as flow processes for these products. To insure that good manufacturing practices (GMP) are used, all products must undergo basic laboratory testing to make sure that they are not adulterated with bacteria that cause foodborne illness.
If the products will be sold to retail outlets, they must be labeled. The label must include: 1) name of the product; 2) net weight of the product; 3) name and address of the manufacturer and 4) a list of the ingredients in descending order by weight. All packaging used for the products must be made of food grade sources, as recognized by the Food and Drug Administration and the United States Department of Agriculture.