The basic legal issues, such as picking a name for your business and deciding whether to operate as a sole proprietorship, partnership, limited liability company or corporation, apply to all businesses whether they operate from your garage or the 100th floor of New York's World Trade Center. Similarly, when it comes to signing contracts, hiring employees and collecting from your customers, the laws are identical.

But there are also a number of legal issues unique to home-based businesses, including zoning ordinances which typically allow some types of businesses to be operated from home, while forbidding others. Tax law is another area in which special and sometimes complicated legal rules affect home-based businesses.

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