Learn which home based businesses require a federal license and from which federal department.
Only a few home based businesses actually require a federal license. In most cases the license required would be based on state, county and city rules. The federal licensing bureaucracy mainly deals with businesses that operate across state lines or handle certain operations. The government agencies that currently deal with federal licensing are the FDA, Department of Transportation, Federal Highway Administration, SEC, FCC, Bureau of Alcohol Tobacco and Firearms, and the Bureau of Export Administrations.
Are you planning on selling or serving homemade food products? If so, then you would need to contact the FDA (Food and Drug Administration) in order to get your product approved. The FDA monitors production, packaging, labeling, distribution and selling of food products. There are different rules and processes for each type of food product. If for some reason, the FDA finds that you have violated one of the codes, then they would request that you voluntarily destroy the product or in extreme cases they may be seized by U.S Marshals on orders from the FDA. The order would be available in a written report and a recall may be issued.
Will you be working in the field of investments? Whether a broker or advisor, you would need to receive a federal license from the SEC (U.S. Securities and Exchange Commission). The goal the SEC is to protect and defend the investors as well as uphold the integrity of the securities markets. Due to the Securities Exchange Act of 1934, all brokers, dealers and advisors must register with the SEC. This act governs how financial or investment companies are to operate. The registration must be completed before the business is to begin.
Are you broadcasting on television or radio? The FCC (Federal Communications Commission) regulates television and radio broadcast. If you plan on broadcasting television or radio signals from home, then you must go through the FCC. They only deal with the actual act of broadcasting and not filming or recording for later broadcast by another company. It is the FCC's job to assure that the Communications Act of 1934 is being followed by all television, radio, phone, overseas cellular, cable, and satellite companies.
Will you be dealing with or selling Alcohol, Tobacco or Firearms? If you plan on selling Alcohol, Tobacco or Firearms, then you will need a license and permit from the Bureau of Alcohol, Tobacco and Firearms. This bureau monitors the selling of these items to assure the public's safety from criminal and terrorist organizations. It is a very serious offense to sell these items without proper licenses and permits.
Will your product be sold to people in other countries? If so, then you will need to contact the Bureau of Export Administration. This bureau monitors the export of sensitive good and technologies. They enforce export control, anti-boycott and public safety laws. Just because an item is legal in the United States, does not mean that it is legal in all other countries. The Bureau of Export Administration assures that all rules and regulations of other countries are followed when exporting goods. They are also known as the Bureau of Industry and Security.
As for the Department of Transportation and the Federal Highway Administration, these agencies mostly deal with state, county and local government to assure that transportation and roadways are safe.
Unless your home based business falls under any of the previously mentioned categories, then it is very unlikely that you will need more then a state, county or city license. What ever your needs may be, be sure to get your licenses before your start your new home based business. Many applications or registration can be completed online and most local governments have information centers for new businesses. For more information on local, state or federal regulations, please contact your local government.
