Business Considerations

• Local/County Planning Department:  They'll confirm if you can operate a food business from your home and what permits you might need.
   
• "Customary Home Occupation" License: Check with the planning department to see if this specific permit applies in your area for home-based businesses.
   
• HOA or Leasing Office Approval: If you have a homeowners association (HOA) or rent your place, you'll need to confirm their rules about home-based businesses. They may have limitations on things like signage or customer traffic. .

Tax Numbers

• Sales & Use Tax number (NC-BR): Needed if you plan to sell goods or services in North Carolina.
• Federal Employer Identification number (EIN or FEIN): Required if you have employees (even just one) or for other business purposes like opening a bank account. Obtained from the IRS website Internal Revenue Service (.gov)
• N.C. withholding tax number: Needed if you withhold state income tax from employee paychecks.

Application Process:

• NC-BR: You can register for a Sales & Use Tax number online with the North Carolina Department of Revenue https://www.ncdor.gov/.
• EIN: Apply for an EIN online or by mail through the IRS website.
• N.C. withholding tax number:  While there isn't a dedicated "N.C. Business License Information Office," you can obtain information and application forms for the N.C. withholding tax number from the North Carolina Department of Revenue website as well https://www.ncdor.gov/.

The business structure you choose determines where you register your business name in North Carolina. Here's a breakdown of the filing process:

• Sole Proprietorships and Partnerships:  File a Certificate of Assumed Name (DBA) with the Register of Deeds in each county where you plan to operate your business.
• Corporations and Limited Liability Companies (LLCs): Register your business name with the N.C. Secretary of State, Corporations Division. This filing applies statewide.

Why do you need it?

Even though you're running a business out of your home kitchen, accidents can happen.  Insurance protects you financially from various liabilities:

• General Liability Insurance: Covers you if a customer gets injured at your home (like a slip and fall) or if your business damages someone's property.
• Product Liability Insurance: This is crucial in case someone gets sick after consuming your food products.

What type of insurance do you need?

The core coverage you need is:

• General and Product Liability Insurance:  This combined policy is offered by many insurers and protects you from the most common risks associated with cottage food businesses.

There are also optional coverages to consider depending on your specific needs:

• Business Property Insurance: Protects your equipment and supplies in case of fire, theft, or other covered events.
• Business Interruption Insurance: Covers lost income if you can't operate due to a covered event (e.g., fire damage to your kitchen).

Finding the right insurance:

Here are some options to explore:

• Specialty Cottage Food Insurers:  FLIP is a popular example, offering affordable policies designed specifically for home-based food businesses.
• Independent Insurance Agent:  An agent can search for quotes from various insurers to find a policy that fits your needs and budget.

Tips for choosing insurance:

• Compare quotes: Get quotes from multiple insurers before deciding.
• Understand coverage:  Be clear on policy limits (maximum payout) and deductibles (out-of-pocket cost before coverage kicks in).
• Read the fine print:  Make sure you understand what's excluded from coverage before purchasing the policy.