Please Be Advised: The information found in this tutorial is not legal advice. I am a photographer, not an attorney. If you would like legal advice, please contact your attorney. Happy Reading!
Okay so, you've got your equipment, your portfolio is ready, and you're ready to take the next step and open a legitimate photography business. But where do you start? What documents do you need? Do you need insurance? And ... where do you find these answers? Well, after talking to a few dozen photographers, reading a few books, and contacting a few government and state agencies, I think I can finally put together a checklist of all things (or pretty close) needed to get your business up and running .... legally.
(1) Form: First and foremost you need to decide what form of business will make the most sense for you and your business needs. **There are three basic forms of business: Corporations, Partnerships, and Sole-ownership (sole-proprietorship). Each form of business has variations that must be considered when making your decision. Do some research to determine which is right for you.
(2) Licensing: In order to run a business legally, most cities will require that you have either a business license, an assumed (ficticious) name permit, or a combination of the two.** A ficticious name permit, or DBA, is usally required when the name of your business does not include your legal surname. In some states, such as Texas, the permit doubles as a business license. And ... in other states, running a photography business does not require a license at all. Contact your local city hall to find out what type of licensing is required for your area.
(3) Federal Taxes: A Federal Tax ID number (EIN) is required for all businesses. This is how the IRS idientifies you as business entity. If you are a Sole Proprietership your SS number can be used as the EIN. You can apply for an EIN for free at http://www.irs.gov/
(4) State Taxes: **If you are starting a business in a state that charges sales tax you may be required to charge, collect, and pay sales tax.This means that you will also need a Resale Number, also known as a State Tax ID. There are some exceptions. **For more information contact the State Board of Equilization office or check your state's website. Remember: When getting paid for a job, and you charge sales tax, this is NOT YOUR MONEY! You will be required to file with your state and pay these taxes either yearly or quarterly, depending on the state your in and the size of your business.
(5) Business Account: Do you need to open a seperate checking account for your business? YES. Opening a seperate bank account for your business does two things: (1) It keeps you organized .... your accountant will thank you ... even if YOU are the accountant (2)** It proves to the IRS that you are serious about your business and that you are working toward making a profit. Check with your bank to determine what type of checking account is best for you and your business.
(6) Business Insurance: Business insurance is highly recommended no matter how big or small your business may be. You have spent a ton of money on equipment, right? You want it to be protected, right? Get Insured! Most insurance companies will cover all of your photography equipment as well as offering you liability to protect yourself ... in case a client was to get injured at your studio or by some of your equipment. USAA offers small business insurance. If you are a member of the PPA they can also direct you in the right direction. You can also contact your current insurance provider.
There you have it. Don't have all of this yet? .... Don't freak out. It's okay. Everyone starts somewhere. Take a breathe, collect your thoughts, and then start making some phone calls. You'll be up and running in no time. Remember: There are different requirements for every state, county, and city. Please contact your local government offices to confirm exactly what is needed for your area. Hope this helps!
**The Photographer's Guide to Marketing and Self-Promotion by Maria Piscopo