Keep your firm from zoning out: running your business from your basement may get you zapped with hefty fines.

Tired of bumping her head against a corporate glass ceiling, a woman started her own accounting firm in the bedroom of her Los Angeles apartment. All was well until one of her neighbors started complaining about the number of people entering and leaving her apartment.

She was hit with a $100 fine and told to close shop: LA laws do not permit an entrepreneur to use his or her home as a primary place of business. There are some 24.3 million home-based businesses in the U.S., many of which are operating illegally.

However, state legislators may soon answer the prayers of business owners in the City of Angels. Karen Constine, chief of staff for 3rd District Councilwoman Laura Chick, says that Los Angeles is one of only 11 of L.A. county's 88 cities that doesn't allow home-based businesses to operate within the city limits. Councilwoman Chick has spearheaded legislation that will allow thousands of home-based businesses already operating in the city to become legal entities.

At press time, the city council was scheduled to vote on the bill to legalize L.A. home businesses. "We see home-based businesses as a rich, viable source to the Los Angeles economy," Constine says. "What we have now is a law that doesn't make sense."

Chick says her motive for the bill is to give those already in business a way to operate legally. If passed, the law will regulate the types of businesses that will be permitted to operate in residential areas.

For instance, mechanics would not be allowed to operate auto repair shops in their backyards. But the law would permit accountants, lawyers or writers to use their homes as their primary place of employment.

Most states have zoning ordinances or laws regarding home businesses. These laws vary depending on what type of business a resident has and how it affects the community, For example, "A person who owns an exterminating company would have to show that he's storing pesticides in accordance with federal and state environmental laws," says Thomas McLamore, state director of the Maryland Small Business Development Center Network in Baltimore.

How your neighbors feel about your home-based business can be enough to close it down, especially if you're operating illegally. "You can save yourself a lot of trouble by just talking to your neighbors," says McLamore. "In many cases when the zoning office got involved with home-based business owners, it was after neighbors made complaints. It's the complaint process that leads to citations and fines." Fines for violating zoning laws range from $100 to $500.

McLamore, who oversees 17 offices throughout Maryland that monitor and assist small businesses, says it's imperative for home-based entrepreneurs to learn about their community's zoning laws. If it's a business such as a doctor's office or beauty salon, residents have to prove that the extra traffic can be safely accommodated without intruding on their neighbors' parking. "I've seen situations where entrepreneurs have renovated their homes to start a business, only to find out that what they want to do isn't legal in their municipality."

The first step to opening a business in your home is to check with the zoning or building codes office in your community. Your local city hall or courthouse should be able to provide you with this information. There, you will find out what permits you need to apply for and how much they will cost. Permits range from $25 to more than $100 in some areas of the country.

Corey Faucheux, director of the St. Charles Parish Department of Economic Development in Louisiana, says those who want to start a business in their home should realize that "zoning laws are designed to maintain the integrity of the residential community."