Should I create an LLC?
Should I just use DBA?
Today's column and CJP Photo News is directed at photographers, but what I am writing about can and should be taken into account by any and all businesses.
DBA or LLC is an important decision you MUST make if you are running your photography as a business. You MUST choose one or you may run afoul of town ordinances or state laws and be subject to fines.
As I wrote in another blog I maintain, I sincerely believe that Messages are everywhere. We just have to be attuned to seeing them
Sitting in Subway the other day getting lunch, someone sat down at the table in front of me with a shirt advertising his business with LLC at the end. That’s the motivation for today’s column. So what are the advantages to each? And which should you consider?
Let’s take them one at a time:
An LLC must conduct a name availability check with the secretary or department of state where the LLC is formed prior to completing the company's formation documents. This ensures that another entity is not using a business name that is too similar to the LLC's name.
An LLC will protect the owner from liability which isn’t absolutely necessary if you are primarily a landscape/nature photographer. An LLC will most likely be something you want to consider if you photograph weddings, if you are a commercial photographer, shooting real estate properties, if you are a portrait photographer on your own.
The cost of creating an LLC varies. Check with the state where you live to inquire about the cost. Filing LLC papers is done through the Secretary of the state where you live.
Doing Business As
This is the less expensive way to operate and MIGHT just be all you need. Let’s just say you need to pick one of these if you are operating. As opposed to an LLC you do not file with the state, you simply file with the town you operate your business in. Having a DBA certificate allows you to open checking accounts under your business name so customers can write checks for product to your business. You can also write checks under your business name.
Differences between LLC and DBA:
--The cost benefit of creating a DBA is far greater than creating an LLC
--A DBA doesn’t create a separate entity so you are not protected from personal liability. However, as I mentioned above, if you are primarily shooting landscapes and nature, the likelihood of liability is almost nil. If on the other hand you are or are considering another photography venture, such as:
Then you MAY want to consider creating an LLC
--With an LLC your business name is protected. In other words since you filed with the state, no one else can have your business name. With a DBA you’re not guaranteed such name protection.
Which one is for you is dependant on your needs. You MUST choose one otherwise you could be subjected to fines.
In the meantime:
Focus on what’s ahead of you.