Art Biz 101: Choosing the Right Legal Structure

Navigating the business side of art can feel daunting. But a solid foundation is key to your success, and that starts with choosing the right legal structure.

So, when do you need to incorporate? While a sole proprietorship is fine for some starting out, incorporating becomes crucial as your business grows, your income increases, or you take on more risk. It offers liability protection and can provide tax advantages.

What are the different structures?

• Sole Proprietorship: Simple but offers no liability protection. The business is not considered a seperate legal entity from the owner. Freelancers often use this.

• Limited Liability Company (LLC): Protects your personal assets from business debts. Business income and losses are passed through the owners' personal tax returns.

• S Corporation: Offers tax advantages but has more complex requirements. Allows profits and losses to pass through directly to shareholders, avoiding double taxation.

Incorporating protects your personal assets, enhances your professional image, and can offer tax advantages by allowing certain business expenses to be deducted. Remember, you'll need to file incorporation papers with your state and maintain financial records (income and expenses, ideally in a spreadsheet).

Consulting with a business attorney is highly recommended. They will guide you through the process, ensuring you choose the best structure and comply with all regulations.

Don't let the business side intimidate you – a strong legal foundation empowers you to focus on creating and sharing your art with the world!