Business Structure

Gary Miller

Hello all. Long time lurker here with a curiosity question.

Wondering how many of the pros here have structured their business as Sole Proprietor v. Corporation v. LLC and what type of photography business you operate under that business structure.

Thanks.

- Gary

Scott_Quier

Gary Miller wrote:

Hello all. Long time lurker here with a curiosity question.

Wondering how many of the pros here have structured their business as Sole Proprietor v. Corporation v. LLC and what type of photography business you operate under that business structure.

Thanks.

- Gary

It would be a lot easier to provide a meaningful answer if you would first give an idea of what you are looking to do with the information. For example, are you "just curious", are you looking to structure your business and looking for suggestions/ideas on the "best" way to structure it?

If the latter, I might suggest that contacting a small business accountant to be the first stop you need to make in getting good, authoritative answers. A good second stop might be to talk to a lawyer. There are many reasons to structure a business one way over another: tax liability, business liability, protection against litigation, etc. But, you first need to know what your exposure is to all the above (and others) before you can make an informed decision. That's where the accountant and the lawyer come in handy.:D

Gary Miller

Scott -

Thanks for your reply. My question falls under the "Just Curious" category.

My business is "set up" as an individual sole proprietor. I own another company in an unrelated field which operates as an LLC. I could have just set up under that (as a DBA), but decided to keep the two entities separate. Since all my sales will be handled through SmugMug I will just let them send me a 1099 at the end of the year and file it with my individual taxes.

- Gary

Scott_Quier wrote:

It would be a lot easier to provide a meaningful answer if you would first give an idea of what you are looking to do with the information. For example, are you "just curious", are you looking to structure your business and looking for suggestions/ideas on the "best" way to structure it?

If the latter, I might suggest that contacting a small business accountant to be the first stop you need to make in getting good, authoritative answers. A good second stop might be to talk to a lawyer. There are many reasons to structure a business one way over another: tax liability, business liability, protection against litigation, etc. But, you first need to know what your exposure is to all the above (and others) before you can make an informed decision. That's where the accountant and the lawyer come in handy.:D

ChatKat

Scott's advice
Scott's advice is a good one. You should seek accounting advice.

As an accountant and a photographer, I am set up as an "S" Corporation and I have put both entities in my business. My husband is a CPA and he has a C Corporation but then he is not a photographer except by hobby. But the entitiy that is right for me may not be right for you - everyone has a different situation and that should be the driving factor as to the entity type. If you are shooting people, you might was to have some protection of your personal assets should something happen and you had a legal issue.

Then youl will file a 1099 as a part of your Profit and Loss - Schedule C for your Sole Prop. But you still need to keep a set of books, what about deducting your fixed assets and depreciation? I don't know what kind of photography you are doing, but you have costs as well - telephone, advertising, business cards, your smugmug site, domain name?

What about sales tax (sometimes your labor is taxable!) and business licenses and insurance?

There is never a substitute for having a conversation with an accountant who can look at your own situation and help you make an informed decision as to what is best for you. One size doens't fit all and while there is great information here at Smugmug, a photographer is not necessarily your best place to ask accounting questions.