A&P Team: Learn me about being coming a "Licensed, Bonded, and Insured" photographer

Discussion in 'Lifestyle' started by Tonster MBA, Sep 15, 2009.

  1. Tonster MBA

    Tonster MBA OT'r of the Year 2013 OT Supporter

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    I am am guessing that means:

    I have a business license with a TAX ID number so I can pay taxes yay!:hsugh:

    I don't know what Bonded means

    Insured for liability and theft.
    Found these guys ( http://www.tcpinsurance.com/ )

    Am I on the right track? Do you guys think it is a smart choice to get these things taken care of before I try tackling weddings as the lead photog?


    Also:
    I was wondering if anyone could give some input as to be an LLC or a sole proprietor. I understand that an LLC is its own entity so I was wondering how I would go about transferring ownership of my current equipment from me to the new LLC. If I chose to take that route. Further more as far as computers go, if I were an LLC and those computers owned under the LLC would I be able to use them for personal use? i.e laptop for class and what not.

    And finally

    Could anyone make an EDU about how to make a hard cover wedding book or the steps I need to do to go about it. I have no clue how to do it. Do I just send my photos to a book making site and they design it and what not, I really don't know how it works. I found some sites but it was just confusing.
     
  2. Wobistdu

    Wobistdu Guest

    LLC and Corps are nice of course due to the fact they can't sue you personally. you won't lose your house.

    not sure how risky photography is though? you could always fall off a ladder taking a pic and break the bride's leg i guess

    i dont see why you couldnt use "company" equipment personally.

    my dad owns 2 businesses and his work truck is also his general truck.
     
  3. Tonster MBA

    Tonster MBA OT'r of the Year 2013 OT Supporter

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    Well thank you that was a helpful reply. I understand a little (from my accounting class) about how LLC's work and the difference. My question is how do I transfer ownership of all the stuff I have not, to my new LLC.

    Say I go file for an LLC, how do I say, okay now this stuff belongs to blank LLC and no longer belongs to "my name" do I have to sell it to myself then reinvest that money back into Blank LLC?
     
  4. Wobistdu

    Wobistdu Guest


    not sure about that, sorry
     
  5. EWhytsell

    EWhytsell New Member

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    I'd definitely get a state TAX ID and you'll also need to file a fictitious name form if you want to properly set up a business bank account. Some banks will let that form slide, but if they do they are in violation of several laws. My wifes a bank manager and enforces "by the books" policies over her staff.

    I'm not sure if bonded is actually necessary for photography though it could vary by state. In the construction industry bonding is used to make your company legit in the eyes of the state or county and the customer and I'm not 100% certain, but I think its kind of like an upfront insurance in case you do damage. Again not 100% sure. I do know that for an excavating business its a pretty nice chunk of change $20K here.

    Oh and the TAX forms are so simple a monkey could do them. I do it though Ohio's website and it takes like 10 minutes twice per year.
     
  6. EWhytsell

    EWhytsell New Member

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    Myself I haven't bothered with calling most of my equipment company property. I didn't go the LLC route though since in my state there is essentially no difference from a liability stand point. If I damage something/someone a court would simply ask my LLC to pay with what? I have no studio that I could put a lien on or anything so they'd look to the next person down the liability chain which would then be me anyway.

    Maybe someday :wiggle:
     
  7. Tonster MBA

    Tonster MBA OT'r of the Year 2013 OT Supporter

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    isn't that the whole point of a LLC, they are their own entity, how could some one go after the next person in line when you are just as much related to that company as the next guy. That is like saying if the a company screws up , the stockholder can be sued... I don't get it. That is the whole point of an LLC. Seperating your business from yourself.
     
  8. Tonster MBA

    Tonster MBA OT'r of the Year 2013 OT Supporter

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  9. EWhytsell

    EWhytsell New Member

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    Your correct in that they would look at the LLC's assets first, but if its only got a few tens of thousands in camera gear and your being sued for way more its gotta come from somewhere and that somewhere is you.

    The LLC is very much like a sole proprietorship even in its taxes. It still doesn't pay its own corp income taxes and is actually just a way to help more than one person (ie two photographers) work as partners in the business.) They each still report taxes on a 1040 and file a self employed income form for the work they performed under the business.

    Now the real safety net comes from being an S-Corp. In this your pretty much at no risk, but your gonna be paying fed corp taxes, state corp taxes, tracking everything, and its gonna be expensive.

    This is how it was given to me by my lawyer and from my own research into setting up.

    I'll also reiterate an old lawyer saying, "The rich man and the poor man are equal under the law until one of them runs out of money."
     
  10. Astro

    Astro Code Monkey

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    Be careful with LLC and make sure you understand the rules in your state. LLC protection tends to vary by state.

    S-Corp (or regular corp), if you fail to prove to a court that you followed ALL the requirements of the s-corp (documenting, tracking, taxes, etc), you can be found to be operating as a sole proprietor and lose all your personal stuff.

    EWhytsell: I'm in Ohio. How old is that LLC info? It makes sense that they come after you, but under an LLC, house and other personal items are usually protected (and what about having the LLC file for bankruptcy).

    The idea of the LLC is "limited liability". Anywhere you have your company name, you HAVE to specify the LLC so the customer sees up front that they can sue you, but its limited to the company assets (next question, what would be the company assets if you are working from your home?). Drop (or forget) the LLC and you are automatically operating in sole proprietor territory.

    Is there any court cases proving this in Ohio? It sounds like you described an LP (limited partnership) where you have 2 or more professionals/partners in a business. And yes, under an LP, your personal stuff (like a house) is on the line.

    Chrysler was an LLC. I don't see their stock holders getting dragged into the bankruptcy (maybe I missed something).
     
  11. jared_IRL

    jared_IRL OT Supporter

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    you don't need to become a company unless you're making your living income off of your business, or you're in a business that could kill or handicap someone....

    what, exactly, do you need government protection from?
     
  12. EWhytsell

    EWhytsell New Member

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    This is pretty much my point as well.

    As for LLC or LP I could be confusing some points for sure. I'm just a guy on the net :)

    I guess the true best advice is to have insurance since no amount of legal paper can truly stop a determined plaintiff.

    Still I'd just become a sole proprietor for a bit and grow the business a bit and get adjusted to the added logistics of running a legit business within your state.
     
  13. CornUponCob

    CornUponCob New Member

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    Lolz... I pretty much skipped the business side of everything. People give me checks made out to me and I cash them.

    I report any income that's actually reportable (anything I filled out a W9 for), and report about 10% of the rest of it.

    I looked for insurance at one point, and the company came back with a proposal with all this extra shit I didn't ask for. I told them to give me a reasonable quote and I never heard back.

    The business side of photography bores me to tears.
     
  14. Astro

    Astro Code Monkey

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    In Ohio, and I don't remember the exact number, it could be $5k, if you make less than that, you can report it as regular income. You wouldn't need a tax id. You would be operating as a sole proprietor, but without the tax id and fees that go with it.

    Benefits of the tax id:

    The gov't knows about you. If you have to dispute copyright or logo claims (unlikely, but you never know) you have some official paperwork that declares when the business became official.

    You wish to open a business/merchant bank account. You wish to take online credit cards without paying the huge fees to PayPal or whomever.

    For insurance, the tax id might be needed if the insurance is for the business or the business property. I could be wrong on this.

    If you wish to become a reseller, you will need a tax id (so you can buy stuff without paying taxes).

    Basically, get the tax id when you absolutely have to have it. Otherwise, run without it and let the company grow. It will be a good problem to have when your business gets too big that you have to get a tax id (and you likely will be able to afford all that is required to go with it).

    I just can't say enough about being careful as a sole proprietor, even with insurance. If they sue you, your house (and other stuff) is still on the line, it is just further back in the list.
     
  15. Tonster MBA

    Tonster MBA OT'r of the Year 2013 OT Supporter

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    I would like to do this part time, you could say to make a living, my rent and tuition are paid for, so i just need it for spending money and to reinvest in the business I have already done 7 or 8 weddings I am ready to make the next step I have calculated:

    If I do 12 weddings a year it cost be $500* just do shoot the wedding and I wish to gross about 2000. 500 for taxes 1000 for profit. If I profit 12000 grand a year ill be happy.

    * Annual fixed cost of website+insurance+hosting+market, etc divided by number of estimated weddings
     
  16. Fucker

    Fucker out of the fast lane, bitches

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    then a sole proprietor is all you need. get your city/county permit, get an EIN online and fill out the franchise tax board paper work. find an insurance broker and get coverage for your stuff and liability, it's not expensive for what you're doing.
     
  17. Tonster MBA

    Tonster MBA OT'r of the Year 2013 OT Supporter

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    :wiggle:


    Okay Dokay
     
  18. adamlewis88

    adamlewis88 New Member

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    If youre operating under your own name like "Adam Lewis Photography", you dont need a tax ID number.
     
  19. Tonster MBA

    Tonster MBA OT'r of the Year 2013 OT Supporter

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    what about initals

    AG Photography or something like that.
     
  20. adamlewis88

    adamlewis88 New Member

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    I dont know broseph :hs:
     
  21. Jcolman

    Jcolman OT Supporter

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    Yes you do. At least in my state. You need a tax ID number to pay your quarterly sales tax.

    As for albums and books, sign up with a company like Black River imaging or one of the other print/album companies. Then you can DL their software that will allow you to create albums, etc. You need to be a professional business first which means having a website and business name.
     
  22. Jcolman

    Jcolman OT Supporter

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    When the time comes when you need insurance, all of a sudden you won't be so bored.
     
  23. Tonster MBA

    Tonster MBA OT'r of the Year 2013 OT Supporter

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    Just signed up






    ZING!
     
  24. adamlewis88

    adamlewis88 New Member

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    My bad. Its local apparently. Where I am, you can use your SSN so long as your business is operating under your name.
     

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