You need to be careful. Linux - as in the kernel - is licensed under the GPL. This means you are free to distribute it, but you are under an obligation to supply the source code used to build it if requested - though you may charge a fee to cover your costs when doing so. Of course, it is unlikely you will be asked, but you might be.

The wider operating system - sometimes referred to as GNU/Linux - will be covered by a variety of licenses and I am sure it is this, as opposed to the kernel, you wish to distribute. Depending on your jurisdiction (software patent law is very different in the EU from the US, for instance) and the software used you may not be free to distribute that at all eg you may have software which is built using combined GPL and non-GPL code (you can build this but you may not distribute it in this form) etc - you need to check all this thoroughly.