Can You Run a Business from Home in Michigan?

Yes, you can run a business from home in Michigan, but there are important regulations and considerations to keep in mind. Many entrepreneurs, especially freelancers, consultants, e-commerce sellers, and small service providers, choose home-based businesses for their low overhead costs and flexibility. Michigan supports this trend, but compliance is key.

• Zoning and Local Ordinances: Before anything else, you should check with your city or county zoning office. Some residential zones may restrict or even prohibit certain types of business activities entirely. Those restrictions mainly concern activities which, for instance, make the traffic heavier, the noise louder, or the signage bigger.
• Business Structure and Licensing: Even though all of your business activities will be conducted in your home, you still need to come up with an appropriate legal structure, such as an LLC, corporation, or sole proprietorship. Moreover, the industry to which you belong will determine if you need licenses at the state or local levels. For instance, a business that prepares food, provides daycare, or does personal care for others is a service that is obliged to have a permit first before starting such activities.
• Home Occupation Permits: In certain Michigan cities, you may need a home occupation permit if your business involves regular customer visits, deliveries, or on-site services. This is to ensure that the nature of your operations does not disrupt the residential character of the neighborhood.
• Taxes and Deductions: Having a home business is not a reason to be exempt from taxes. You must register for applicable state taxes, such as sales tax, income tax withholding, or unemployment tax, depending on your business type.
• Insurance Considerations: Typically, homeowner’s insurance does not provide coverage for business-related liabilities. However, entrepreneurs can purchase a separate business liability policy or an insurance rider to cover potential business-related risks.

Michigan allows home-based businesses, but success depends on aligning with local zoning, licensing, and compliance requirements. The flexibility can be a major advantage, but skipping the legal groundwork can lead to costly penalties.

For tailored support in structuring and maintaining compliance for your Michigan home-based business, OneIBC USA provides expert guidance on formation, licensing, and tax registration.