Many small businesses, particularly sole proprietors with service businesses, do not have a professional business address but instead use their home address. However, there are some downsides and potential legal issues when doing so. Intuit spells out some of the more prevalent ones in a QuickBooks posting:
Lease and HOA Rules.
Apartment and condo complexes restrict the ability for residents to run a business out of their home (or in this case apartment or condo). Check your lease and home owners’ association (HOA) rules to confirm if there are any restrictions.
Local municipality codes (zoning regulations) in some cities may restrict or prohibit home owners from running a commercial operation out of their homes.
LLCs and corporations may negate the benefits they received by forming a limited liability company or corporation. Those protections only apply if business and personal activities are kept separate. If the courts deem the two are intertwined, then you could be personally liable for business debts and obligations.
When a small business owner uses her or his private home address, she or he must provide it to customers whenever they require contact information (often the case with legal contracts). This may compromise your family’s privacy, with customers suddenly showing up on your doorstep.
Solopreneurs and small businesses without physical office addresses are opting to use virtual office addresses instead of their home addresses. There are multiple advantages in doing so:
Search Engine Optimization (SEO).
A critical starting point for any local search marketing campaign is a local business listing. This includes business name, address, phone number, and other details. There are various online business listings that you need to complete to be visible: a) Google My Business, b) Facebook Professional Services, c) Yelp for Business, d) Yellow Pages, e) Yahoo Local, f) Bing Places for Business, and g) Foursquare for Business. An important reminder here is to keep the information you input on each of these consistent, as variations will affect your SEO ranking. Additionally, pay special attention to the categories for your business; these impact SEO.
Professional Presence and Trust.
You’ve heard the old real-estate saying, “Location, location, location.” The same is true when it comes to your business. Your business address plays a critical role in building a professional presence and initial trust with prospects and customers. A home address or one in a less-than-desirable location can have the exact opposite effect.
Meeting Place for Clients and Partners.
Having a professional address at which to meet clients and partners is important. Hotel rooms are expensive (twice the cost of a rented meeting room space) and are staid and fail to provide the type of experience you typically want for clients and partners. Coffee shops are unprofessional and lack the confidentiality many business meetings require. Here, you want to select a virtual offices supplier that also offers professional rented meeting space such as Davinci Virtual Offices and Davinci Meeting Rooms.
Registered Agent Requirements.
If you want to form a limited liability company (LLC), corporation, or limited partnership, you must have a registered agent address in the state where you have registered to do business. A registered agent is simply someone your business has designated to receive important papers related to the business (government documents and notices related to lawsuits). If you use your home address, then it is displayed in public records. A virtual office address is a much better alternative to your business needs.
For businesses that expand into new locations, having a local professional address affords many of the same benefits—from SEO to a professional identity to a meeting place for clients and partners.
Shortcuts matter when it comes to business, and certain ones simply aren’t worth the perceived benefits. Using your home address and not listing your business address on the online business listings are shortcuts you should avoid. Mitigate your legal risks while gaining tangible business benefits by dumping your home business address for a virtual office address today.