Selling baked goods from home is legal in most US states — but the specific rules vary widely. Getting your registration right from the start protects you, builds client trust, and lets you operate without worry. Here is what you need to know to register your home bakery properly.
Understand cottage food laws in your state
Cottage food laws allow home bakers to sell non-hazardous food products without a commercial kitchen. Most states permit the sale of shelf-stable baked goods: breads, cookies, cakes, brownies, and similar items. Products with fresh dairy fillings — cream cheese frosting, custards, fresh whipped cream — often fall outside cottage food protection and may require additional licensing.
Revenue caps, labeling requirements, and permitted sales channels (direct-to-consumer only vs. wholesale) all vary by state. Search "[your state] cottage food law" and read the official state agriculture department page. Do not rely on secondhand information — the rules matter.
Register your business name and structure
Once you understand the food safety rules, register your business. The most common structures for home bakers:
- Sole proprietorship: Simplest option. No formal registration needed in most states beyond a DBA (doing business as) if you use a business name. Your personal taxes cover business income.
- LLC: Provides liability protection. Costs $50-500 to file depending on the state. Recommended once you are doing consistent volume or taking large custom orders.
- DBA (fictitious business name): Required in most states if you operate under a name other than your legal name. Filed with your county clerk for $10-50.
Get an EIN and a business bank account
An Employer Identification Number (EIN) is a free federal tax ID issued by the IRS. Even if you have no employees, an EIN lets you open a business bank account without using your Social Security Number. Apply at IRS.gov — it takes about five minutes online and is issued immediately.
A separate business bank account keeps your finances clean. It makes tax time easier, gives your business a professional appearance, and is required if you operate as an LLC. Many banks offer free business checking accounts.
Labeling and insurance requirements
Most cottage food states require a label on every product that includes: your name, address, the product name, ingredient list, major allergens (nuts, gluten, dairy, eggs), and a statement that the product was made in a home kitchen not inspected by the state. Keep a label template ready and apply it consistently.
Consider a home-based food business insurance policy. A standard homeowner's policy typically does not cover business activities. Specialty policies for cottage food businesses cost $150-500/year and protect you if a client claims a food-related illness or injury.
After registration: set up your business systems
Once you are legally registered, set up systems to run your bakery professionally. Track orders, payments, and client details in a tool like Threecus so your business records are as organized as your legal registration. A well-run home bakery operation from day one builds the reputation that leads to referrals and growth. Our guide on starting a home bakery business covers the next steps after registration.
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