[jeitingphotography]

Right now I work with a friend of mine who owns her photography company. I am a second shooter for her as well as 1st shoot my own weddings for her company. She has a few other seconds that also do the same thing I do. So my question is should I start an LLC for myself? In case something goes bad and the couple Sues could I also get sued personally? Or am I covered under her company? I am an independent contractor according to the tax forms I had to file last year. I make 10k or under from photography profits. What would be my best course of action? Thanks to any and all replies.

[CharlesBaisden]

My advice would be do not start a registered corporation unless you absolutely have to.

The preparation of quarterly sales tax returns, payroll tax returns, unemployment tax payments, annual report filing fees, city license tax fees, county license tax fees, accountant fees, and annual tax return fees for your corporation will gobble up a good chunk of your currently profitable model.

~ Charles

[jeitingphotography]

Thanks Charles,

So at what profit margin is the point where I should turn into an LLC.? Without having an LLC am I covered liability wise if a client sues? Or would the client be suing the company I work for? Which is my main concern.

[Jasont]

If being sued is your main concern get liability insurance. That simple!

[escott]

Jasont, on 27 July 2010 - 01:09 AM, said:

If being sued is your main concern get liability insurance. That simple!

This seems the best way to protect yourself in your situation. Even if you have an LLC you need liability insurance. The LLC doesn't protect you fully when you get sued.

You need to talk to:

-- Your boss, to see if your name in included in her company's liability insurance
-- A lawyer or financial advisor to find out how an LLC works in your state (if you talk to a lawyer you can ask about how to best protect yourself if you're ever sued, too)

[Mark T.]

Photographers are not CPA's. Talk to your CPA about this.

[CharlesBaisden]

I'm going to go with +3 (that is a +1, +1, and a +1). All of the comments here are right on.

As far as your break even point, I would get a written estimate from a CPA. We JUST did this to reduce our accounting expenses down from $5200 a year to approximately $2800 per year. Paying for full service accounting is extremely expensive. I'm sure some folks on here can give you examples of how they do ALL of their taxes themselves and keep the bill under $500 for the entire year. Unfortunately, that wasn't my gift in life, so I pay through the nose to stay in compliance in the 4 states where we pay sales tax & file income tax returns. Yuck.

I would definitely get written estimates on everything before you jump in. Your accountant will be able to show you an annual projection on ALL expenses.

I *believe* (just my opinion here) that the company you are contracting for would be the party liable for any mistakes. I believe this to be especially true if you are not named in the agreement.

Maybe you could solve all of your woes with a simple "limitation of liabilities" document of some sort signed by the company you are contracting with. I don't know if that is the legal term, but it makes sense that it could be constructed.

~ Charles

[jeitingphotography]

Thanks Everyone for all the replies. I will talk with the Boss and look into Liability insurance.