This is a guest post from Rachel Brenke from The Law Tog.
Boudoir, by its very nature, is a sensitive photography genre that demands a more thoroughly examined approach when forming your business. In fact, as a boudoir photographer, you spend extra time seeking out specific lighting setups, sexy poses, and expensive-looking sets. The business aspect of running a boudoir photography business should not be void of this attention to detail. You are photographing a sensitive and private side of individuals, you should look closely at implementing protection for yourself, your clients, and your business.
Types to Choose From
When working in sensitive areas of photography, business owners need to be mindful of the type of business formation they have chosen. Business formations can range from sole proprietor, to limited liability company to corporation (S or C).
-A proprietorship is a name given for one-owner businesses that are not using another business entity form. A proprietorship is required to obtain city, county, and/or state licenses.
-The corporation is considered to be a separate legal person under the law. It is run by a board of directors who appoint officers to run the day to day business affairs.
-The best form of business entity is usually the limited liability company. LLCs are very flexible and has legal advantages that are not available to corporations (e.g. no “piercing of the corporate veil”).
Keep in mind: This process of choosing a formation is not getting a business license. A formation is an action filed to create the business, whereas, a business license is the government giving you permission to engage in a specific commercial activity.
So which do I choose?
When working with boudoir clients, it is important to keep the idea of liability protection in the forefront of your mind. This is even more important than tax benefits a specific business formation will bring you because without protection you may not have a business to get those benefits on!
As you see above, the corporations and LLCs create a separate legal entity from the photographer and your personal assets from being open to liability in case of a client’s claim. At TheLawTog®, we refer to this as separate bucket protection. When forming a business we want to put all of our house, cars, and other personal assets in another bucket. Then we want to put all business assets in the other bucket. This way, if one gets dumped over, one may still be in tact and protected from any loss.
Is that all I need?
Having “separate bucket protection” is not enough for boudoir photographers to be protected. Protection works in layers of the business formation, contracts and liability insurance. First, a contract is a great protection tool that can also reduce the potential miscommunications with client. This legal document can be used to deflect any potential threats of a lawsuit by pointing to specific agreed to provisions in the document.
Second, having an appropriate and up-to-date liability insurance policy is another hurdle that clients would have to go through to “touch” your business assets. While your business may be formed properly to give that separate bucket protection discussed above, having liability insurance will allow for the insurance company to handle any claims that arise without the need for litigation and legal fees.
As you can see, running a business goes way beyond choosing which business formation you should be. In fact, your formation may change over time as you increase in sales and clientele. Always consult with a lawyer for liability protection, then proceed to a certified public accountant for tax strategy and consulting.
- Consult with a Lawyer for Liability Protection
- Talk to your Certified Public Accountant about Tax Strategy and Consulting
Make the reevaluation of formation and tax strategies a yearly date on your calendar to ensure the protection is still intact and you’re getting the best benefit for the structure chosen.
Has this post helped you? If it has, please check out Rachel’s website, TheLawTog, for more advice, contract templates and more to protect your photography business!
Rachel Brenke is a photographer, lawyer, business consultant and social media marketing strategist based out of El Paso, Texas. She has helped over a thousand photographers start up, market and maintain their businesses through online eWorkshops, 1:1 consulting and the free resources on her blog. She also has contracts for photographers that were designed for photographers by a photographer and attorney!