Author Topic: Are you LLC, LLP, Sole Proprietor, etc? (Read 6506 times)

PaulieWalnuts · « **on:** November 19, 2008, 13:34 »

I was going to do a poll on this but there are a gazillion different business types worldwide.

I'm curious about this because this hobby is turning into a business and I want to separate business and personal. Really don't want my personal assets ruined from some business problem or lawsuit.

Any of you filed as a business and which classification?

AVAVA · « **Reply #1 on:** November 19, 2008, 13:47 »

Hi PW,

Your name reminds me of some dark character from a Coppala film, love it! We are inc. if that helps.

Best,
AVAVA

PeterChigmaroff · « **Reply #2 on:** November 19, 2008, 14:04 »

I'm Inc. as well. Is that the same as LLC? Is LOL an option?

PaulieWalnuts · « **Reply #3 on:** November 19, 2008, 14:06 »

Quote from: AVAVA on November 19, 2008, 13:47

Hi PW,

Your name reminds me of some dark character from a Coppala film, love it! We are inc. if that helps.

Best,
AVAVA

Close to Coppala. It's from the HBO mobster series the Soppranos http://www.hbo.com/sopranos/cast/character/paulie_walnuts.shtml

Read_My_Rights · « **Reply #4 on:** November 19, 2008, 14:52 »

Really small scale in my case: sole proprietor.

RacePhoto · « **Reply #5 on:** November 19, 2008, 15:09 »

Quote from: Read_My_Rights on November 19, 2008, 14:52

Really small scale in my case: sole proprietor.

SP plus Federal Tax ID, State ID and state sales tax number. None of these protect me against anything except forgetting to pay taxes.

lisafx · « **Reply #6 on:** November 19, 2008, 15:53 »

I am still a Sole Proprietor. I talked to the accountant about LLC but he said since I shoot stock and don't take commissions from clients anymore that LLC was overkill.

melastmohican · « **Reply #7 on:** November 19, 2008, 16:05 »

Very interesting question. I might face this next year cause it is my first couple months I have regular payouts. If I am going to declare myself as SP is Schedule C the only thing I need? How do you handle expenses (I bought some software and lens this year)?

AVAVA · « **Reply #8 on:** November 19, 2008, 16:15 »

Hey Paulie,

Forgetta about it.... I am actually one of the few that have not embraced the series yet. Some day I will get some free time and get hooked. I am a big fan of gangster flicks.

Best,
J

lisafx · « **Reply #9 on:** November 19, 2008, 16:22 »

Quote from: melastmohican on November 19, 2008, 16:05

Very interesting question. I might face this next year cause it is my first couple months I have regular payouts. If I am going to declare myself as SP is Schedule C the only thing I need? How do you handle expenses (I bought some software and lens this year)?

I write off everything I can - equipment, office supplies, props, model gifts and entertainment, mileage, and home office. Without hunting for my tax return, I believe it all went on schedule C.

Definitely worth paying an accountant IMHO.

charlesknox · « **Reply #10 on:** November 19, 2008, 16:23 »

Anyone Canadians have the anwser for this? im wondering the same thing. It's going to be the first year where i declare an income from photography and was wondering how canadians do it?

AVAVA · « **Reply #11 on:** November 19, 2008, 16:53 »

Hi All,

I would all look into inc. or doing something to get away from the sole propriotor approach. In the U.S. your own private assets ( house, car etc. ) are not protected seperately from your company and if you get sued for one of your images you could be leaving your major assets vulnerable to such a situation. To be honest my wife runs the entire business end of our company ( that's why we are successful she keeps me away from the money

) I am not as well versed about these matters as she is. If you have any specific questions I would be happy to relate them to her and get you a more detailed answer.

Best,
AVAVA

leaf · « **Reply #12 on:** November 19, 2008, 17:04 »

I am a Sole Proprietor but have been thinking about being an incorporated business.

Besides the legal responsibility there is also the matter of taxes which are cheaper as a business if you plan on building up assets

NikonScott · « **Reply #13 on:** November 19, 2008, 18:00 »

As Lsafx says in her post, go to a small business consultant and/or an acountant. The path is full of details that are not easy to understand and everyone's needs vary.

In many towns you can contact the small business bureau and they frequently have peole that can walk you throught the local info you need to understand what you want to do and they do it for free. Incorporating can in most cases protect you personal assets, but that said it is not always true. Being a SP does not personal asset protection most of the time.

Having liability insurance can also be important depending on the types of activities you have, again consult an accountant, attorney or business advisor.

Scott

AVAVA · « **Reply #14 on:** November 19, 2008, 18:33 »

Great advice Scott,

Especially if you shoot people in your work. The chance for having some undesirable legal situation arise is much higher. Insurance is very important if you are going to shoot lifestyle. Consult an accountant or business advisor but make sure it is one that understands the stock industry. There is an add on insurance called E&O ( errors and omissions ) that helps cover you for something you might have forgotten or neglected to add. Maybe a model release wasn't filled in correctly. It is just another layer of protection on top of your other insurance. Not all agencies offer E&O for our industry and it will cost ya.
I have seen a couple of pros get stung very hard by law suits from models that were misrepresented by a sale or advertisement. Or the photographer forgot to get the release so they just filled it in from another shoot with the same model. Remember we might only make a few cents from our downloads but the end user could be of poor character and misuse your image. In the end you can probably get out of it but I stay away from court like the plague.

Lots to learn,
J

mjp · « **Reply #15 on:** November 20, 2008, 02:12 »

I run stock operations as : "Private person carrying on trade", it has own company business code, own accounting, tax and vat numbers etc but the taxes as calculated into my personal taxes even the "company" has own accounting books. The VAT reductions and possibility to buy computers and cameras and get them off from taxes is the main good bonuses. Ofcourse it help to work with other companies too. If you are planning to set up some I prefer to hire good accountist it will not cost much as you think but will help you a lot example when dealing with tax bureau.

br, MjP

Karimala · « **Reply #16 on:** November 20, 2008, 12:04 »

I met with an accountant and attorney who jointly advised sole proprietorship, because my business and its assets is so tiny. If I ever go on to hire employees or open a studio, then I will probably change my status to an LLC.

a.k.a.-tom · « **Reply #17 on:** November 20, 2008, 18:54 »

LLC.

helix7 · « **Reply #18 on:** November 20, 2008, 23:47 »

Sole Proprietorship. Makes the bookkeeping much easier. It's separate from personal funds, expenses are taken straight from the business account, etc.

Check your local laws/requirements if you're considering something more advanced. In some states, one person can't start some of the more involved entities. For example, in some states you need at least 2 people to start an LLC.

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Author Topic: Are you LLC, LLP, Sole Proprietor, etc? (Read 6506 times)

PaulieWalnuts

AVAVA

PeterChigmaroff

PaulieWalnuts

Read_My_Rights

RacePhoto

lisafx

melastmohican

AVAVA

lisafx

charlesknox

AVAVA

leaf

NikonScott

AVAVA

mjp

Karimala

a.k.a.-tom

helix7

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