# Legal Stuff...



## burnws6 (Feb 2, 2010)

Besides your regular business license, is there anything else needed to charge for your work?


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## robertwsimpson (Feb 2, 2010)

a paying customer?


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## burnws6 (Feb 2, 2010)

Lol, its just that I am going to be shooting some vignettes for a huge design companj and I want to male sure I have everything in check.


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## burnws6 (Feb 2, 2010)

Sorry for the spelling I'm on my blackberry


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## robertwsimpson (Feb 2, 2010)

I don't know if you even need a license... Then again, I'd ask to be paid in cash and then not tell uncle sam, if you know what I mean.


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## Christie Photo (Feb 2, 2010)

robertwsimpson said:


> I don't know if you even need a license...



Don't need one in Illinois.

For the job you have coming up, you'll be an independent contractor.  The client may want you to fill out a W9 (that's your name, address and SS#) so they can issue you a 1099 at year's end.

If you ever start re-selling merchandise, you'll need to register with the state for sales tax.  And if you ever hire an employee (put someone on the payroll), you'll need to set that up with the federal government.

-Pete


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## burnws6 (Feb 2, 2010)

So you're telling me I didn't need to get a license for doing photography? that makes no sense. 

Or are you talking about not needing a license to do commercial work?


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## robertwsimpson (Feb 3, 2010)

I don't think you need to be licensed to be an independent contractor in an unskilled field.  by unskilled, I mean as in not a plummer or carpenter, etc.


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## burnws6 (Feb 3, 2010)

Ahh got it. Ok yeah, that makes sense. I'm pretty sure I'm fine, these people are just intimidating and I know they're going to pull paperwork and contracts left and right so I just wanted some piece of mind.


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## Shelly1204 (Feb 3, 2010)

If you don't have one already, I'd recommend forming a corporation to insulate you from liability, especially if you're signing contracts you're not going to thoroughly read. You can find the forms on your state's Department of State website. It usually costs under $200, and you can most likely be up & running right away (depending on the laws of your state).


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## Christie Photo (Feb 3, 2010)

Shelly1204 said:


> If you don't have one already, I'd recommend forming a corporation to insulate you from liability...



I'm not sure why this is always cited.  What sort of liability do we need protecting from?  Yes...  a corporation is a separate legal entity, but that simply makes the corporation and it's officers liable.  Guess who they are.

Still...  aside from business insurance to protect me from claims that my equipment or premises injured someone, I can't imagine what I need fear.  I have only one employee (very part-time).

If I fail to fulfill any contract, I'm liable....  incorporated or not.

Can someone please enlighten me?

Thanks!

-Pete


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## Christie Photo (Feb 3, 2010)

burnws6 said:


> So you're telling me I didn't need to get a license for doing photography?



Just to be clear....  there IS no "photography license."

-Pete


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## themedicine (Feb 3, 2010)

From my understanding you want to be incorporated or in some states have LLC (which is like a smaller version of being incorporated) so that if someone were to sue you, you can't lose personal effects like houses and cars. They can take the business down, take everything that is involved with the business but they wouldn't be able to take your personal assets. If you don't LLC or incorporate, and someone sues you and wins, they can take your personal assets like your home and cars and tvs to make up the difference in what they won.


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## Christie Photo (Feb 3, 2010)

themedicine said:


> ...if someone were to sue you, you can't lose personal effects...



I can't give an intelligent response to this.  I suspect the nature of the claim might have some bearing on it.  You may be absolutely right, but I suspect the officers of the corporation will have some liability. (Is there a lawyer in the house?)

Either way, I believe the better way to limit my liability is with a contract.  I use a contract for weddings, since the amount of money is substantial and emotions would be high (to say the least) if something goes wrong.  There's no good way to do additional photography to complete a wedding contract.  And, being such a personal, emotional event, I'm certain an angry couple would want to punish me in the worst way, making it their new hobby to get it done.

My wedding contract is VERY brief, outlining the payment schedule and stating that if I fail to deliver, my liability is limited to the refund deposits paid.

-Pete


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## burnws6 (Feb 3, 2010)

Christie Photo said:


> burnws6 said:
> 
> 
> > So you're telling me I didn't need to get a license for doing photography?
> ...



Lol, I meant license to do business as a photographer. 

Thanks everyone for the input...keep it coming


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## raptorman (Feb 3, 2010)

Christie Photo said:


> I can't give an intelligent response to this.  I suspect the nature of the claim might have some bearing on it.  You may be absolutely right, but I suspect the officers of the corporation will have some liability. (Is there a lawyer in the house?)
> 
> Either way, I believe the better way to limit my liability is with a contract.  I use a contract for weddings, since the amount of money is substantial and emotions would be high (to say the least) if something goes wrong.  There's no good way to do additional photography to complete a wedding contract.  And, being such a personal, emotional event, I'm certain an angry couple would want to punish me in the worst way, making it their new hobby to get it done.
> 
> ...



What will you do if the court invalidates your limitation of liability clause? (under Belgian law a clause limiting your liability to the refund of deposits paid wouldn't stand a chance in court when used against a consumer, but that's also because under Belgian law, consumers are considered idiots who can't read or think for themselves so our government does it for them)

The combination of a well written limitation of liability clause, using a LLC, PLC..., a good insurance, using common sense, good advisors... will greatly reduce the risk of doing business when used altogether.


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## Christie Photo (Feb 3, 2010)

raptorman said:


> What will you do if the court invalidates your limitation of liability clause? (under Belgian law a clause limiting your liability to the refund of deposits paid wouldn't stand a chance in court when used against a consumer, ...



Well, I suppose I'll just come back here and stay the hell out of Belgium.

Like I said, my contract is quite simple...  quite plain.  No legal mumbo jumbo.  The courts in the US tend to hold BOTH parties to contractual agreements.

But no matter.  It wouldn't take a court order for me to make any reasonable remedy to satisfy a customer that I let down.

-Pete


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## KmH (Feb 3, 2010)

burnws6 said:


> Besides your regular business license, is there anything else needed to charge for your work?


That depends on the state and county you live in and they all have their little ins-and-outs.

You need to consult with a local attorney to know what's required where your business is.

Where I live, they don't require a business license, but they have a commercial property tax, and for that reason it's against the law to run a business out of your home.. The only requirement for selling is having a state sales tax account and collecting/paying the applicable sales taxes to the state.


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## Shelly1204 (Feb 3, 2010)

Christie Photo said:


> I'm not sure why this is always cited.  What sort of liability do we need protecting from?



It's always cited because it's a good idea. I'm not trying to dig at you, but I think the reason you don't see it as a good idea is because you don't really understand what the purpose of a corporation is. Again, this is not a dig, I know sometimes the business end of things can be confusing.



Christie Photo said:


> Yes...  a corporation is a separate legal entity, but that simply makes the corporation and it's officers liable.  Guess who they are. If I fail to fulfill any contract, I'm liable....  incorporated or not.



This is incorrect. One of the purposes of forming and doing business as a corporation is to insulate you from personal liability. For instance, if you screw up someone's wedding, and they sue you for a million dollars and win, and you do not have a corporation, the winning party can collect their judgment from your personal assets (seize your house, car and belongings and sell them at auction, etc.). If they sue your corporation for a million and win, you simply dissolve your corporation and walk away. For the $150 or so that it costs to form a corporation, why not protect yourself?


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## Christie Photo (Feb 3, 2010)

KmH said:


> Where I live, ... The only requirement for selling is having a state sales tax account and collecting/paying the applicable sales taxes to the state.



Hey, Keith...

Is there a tax on the sale of photography in Iowa?  Illinois is a bit goofy, in that we have a choice of how we collect tax.  The actual "service" portion of our sales is not taxable.  We can either call out any merchandise (including lab prints) and tax it fully, or we can tax 10% of the total invoice.

-Pete


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## Christie Photo (Feb 3, 2010)

Shelly1204 said:


> I'm not trying to dig at you, but I think the reason you don't see it as a good idea is because you don't really understand what the purpose of a corporation is. Again, this is not a dig, I know sometimes the business end of things can be confusing.



Oh...  no problem.  I didn't take it as a dig.  I'm asking for clarification.  I'm sure you know that's not the only reason to incorporate.



Shelly1204 said:


> One of the purposes of forming and doing business as a corporation is to insulate you from personal liability.



This does (not) always work...  especially when the corporation is small, with officers like me as president and treasurer and my wife as secretary and vice president.  My accountant just told me that the veil of a corporation is often pierced in law suits.

My studio was incorporated when I opened.  We did it for some tax considerations.  Later, it was no longer necessary and I dissolved the corporation to eliminate the mandatory meetings and records.

Being incorporated is not sure protection of personal assets.  You can still get bit.

A million dollar business policy is fairly cheap.  I think mine is less than $600.  I doubt it covers screwing up a wedding, but I am protected if someone trips over a stand...  a bigger worry for me.

-Pete

BTW...  I see you're out on the island.  I'm a Rockland native.


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## Shelly1204 (Feb 3, 2010)

Christie Photo said:


> This does always work...  especially when the corporation is small, with officers like me as president and treasurer and my wife as secretary and vice president.  My accountant just told me that the veil of a corporation is often pierced in law suits.
> 
> My studio was incorporated when I opened.  We did it for some tax considerations.  Later, it was no longer necessary and I dissolved the corporation to eliminate the mandatory meetings and records.
> 
> Being incorporated is not sure protection of personal assets.  You can still get bit.



Ahh, now I understand. You're taking legal advice from your accountant. No wonder you're confused. 

What you're referring to is a term called "piercing the corporate veil". It's a very rare situation where essentially the business would have to be running a criminal enterprise in order to hold the organizers personally liable (think Bernie Madoff). If you're not planning on committing any crimes in the name of the corporation, it's not something to worry about. Seems like it just makes things more confusing. 

Now if you just don't like mandatory meetings and records, there's other business structures to consider, but that's a discussion for a lawyer, not an accountant. 

Liability insurance is always a good thing. But chances are the OP doesn't need it just yet. He'd probably rather pay $150 to protect himself than $600. But it's good to put all the cards on the table.


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## Christie Photo (Feb 3, 2010)

Shelly1204 said:


> You're taking legal advice from your accountant. No wonder you're confused.



Now I AM confused.  Are you a lawyer?

-Pete


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## burnws6 (Feb 3, 2010)

Shelly1204 said:


> Christie Photo said:
> 
> 
> > This does always work...  especially when the corporation is small, with officers like me as president and treasurer and my wife as secretary and vice president.  My accountant just told me that the veil of a corporation is often pierced in law suits.
> ...




Best advice on here, and I had just gone to the county tax collector to do this before I saw your post. It was 130 to Inc btw.


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## Shelly1204 (Feb 3, 2010)

Christie Photo said:


> Shelly1204 said:
> 
> 
> > You're taking legal advice from your accountant. No wonder you're confused.
> ...



Yes, I'm a partner in a law firm in NY, although business structures isn't my "thing" (my firm specializes in consumer defense and copyright defense litigation).



burnws6 said:


> Best advice on here, and I had just gone to the county tax collector to do this before I saw your post. It was 130 to Inc btw.



:thumbup: Awesome.


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