You can no law against it that I know of. My mom made wedding cakes on the side all the time. Have a cousin running one from her home.
If you are producing food for commercial purposes you have to be licensed and your kitchen has to be up to restaurant code.
I remember watching a news story about a lady in Charlotte several years back that was feeding the homeless out of her house. The state came in and made her do like ten thousand dollars worth of upgrades so her house was up to code.
I don't know what laws are like in every state, but you are not legally allowed to run a restaurant or catering service out of a normal house in NC.