An Artist goes into Business

A reader of my blog had the following questions which I am happy to address in a legal information kind of way.  (Disclaimer: This is not legal advice, nor is there an attorney-client relationship between me and the reader or anybody else reading this.)

“I have a degree in art. I am unable to find a full-time job, so I am thinking of doing freelance work to pay my bills.”

Good idea.  Being an entrepreneur can be rewarding and a way out of unemployment.  By the way, did you know that you may be able receive unemployment payments and start a business at the same time?  Check out the so called self-employment program

“How do I distinguish what is considered freelance, and what is considered "being a business"?”

There is no meaningful distinction.  If you sell things or services for your own profit, you are considered operating a business, no matter what you call it, freelancing, a profitable hobby, moonlighting, independent contractor, doing gigs on the side…..This is true, even if you have a day job and a regular paycheck from an employer.

“When would I have to register myself as a business?”

"Registering" can mean different things in this context.  If you start a business under your own name, there is no need to register that business.  You are automatically a sole proprietor.  If you operate a business under a name different from your own name, you need to register that name and the business by filing for a "business certificate" with the county clerk in the county where your business is located.

Then, of course, if you have income from your business, you need to pay taxes to the local and federal tax authorities.  As a sole proprietor, you would file your income from your business on Schedule C of your federal tax return.  Then you also have to pay self-employment tax, the equivalent of social security and Medicare taxes for the self-employed.

“If I wanted to operate under something like "Arty, the artsy Artist," is that what I would register as a name?”

If that suits your fancy, go for it.  As mentioned above, if you want to operate a business under a name different from your individual name, you must obtain a business certificate from the county in which your business is located.

“I believe I would be considered a sole proprietorship, because I would not have any employees, or business partners.”

Only partly true.  You can have employees, even though you are a sole proprietorship.  If you operate your business with another person, you would automatically be considered a partnership.  Only one person can operate as a sole proprietor.

“Everything is so confusing…because what if I make no commissions, or find no clients?”

Can’t help you there.  That is the risky side of being in business.  Potential huge rewards are the other side.

"I don’t know where I fit in as an artist who wants to explore several avenues to see which is the right route for me."

Even though artists are special in so many ways, when it comes to business, there are just like any other business man or woman.