Many of you may be asking how you can protect yourself in your photography business. We asked photographer and lawyer, Rachel Brenke (founder of TheLawTog) to write a guest blog post for our Iris readers.
By Rachel Brenke
You have the skill, the products and good reputation that potential clients want. But there is something holding you back. You’re not sure what it is. You have the camera, the backup cards, the external hard drive, and the communication skills to inform clients. But there is a huge hole in the entire process.
This is your legal protection. Which sounds scary or overwhelming. Unfortunately, it can be, but it doesn’t have to. And even more unfortunate is that many photographers shy away from the legal aspect because they think checking off a consult with a lawyer or snagging a contract is good enough. Little do they realize that there are many facets to protection of your business. These range from formation, to taxes, insurance and more. Let’s run through the top three legal tips from a lawyer (me!) to protect your photography business on all fronts.
When you set up shop, there are some options you can choose to add a layer of protection. As a Sole Proprietor, a cheap and easy option, there is relatively no protection by formation from your business to personal assets. You get sued; your personal assets are on the line. But if you choose a formation such as a Limited Liability Company, or a Corporation (S or C type) generally, you can put a “shield” between personal and business assets.
The first step to figuring out which structure you need is to ask yourself these questions:
- What is my financial budget for formation?
- How important is liability protection to my business and the nature of the business?
- What is my long-term goal with the business?
From these answers, you can create a plan and decide on the best business formation for you. A small business attorney can help you figure out the liability protections (as mentioned above), and a CPA can help you figure out the tax benefits.
Contract with clients
Contracts offer great protection in that they have legal provisions that invoke legal theories for protection. However, they can be so much more. These documents outline expectations, provide the clients an education into your business policies, and more. Shying away from the use of contracts is a huge way to leave you unprotected.
Avoid deceptive sales tactics
This seems like a common sense way to protect your business against potential lawsuits or governmental action; however, many photographers attempt to get creative on their marketing and don’t realize they are violating the law. Let’s look at sale pricing and comparative advertisement issues you may be inadvertently engaging in.
If you sell a product at a reduced price, despite never having sold it at the “full” retail price, you could be held liable for violating your state’s consumer protection laws. Let’s say you are selling a collection of digital files with a custom album and advertise a special for a certain time– on sale for $500 down from the usual retail price of $2000. If you normally price those products for $2000 and have sold them for $1500 in the past, then you are not violating any laws. However, if you have never actually priced or sold them for $2000 before, but want your consumers to think they are getting a sale price at $1500, you are pricing your product in a deceptive way and may be subject to a lawsuit.
Similarly, if you want to highlight your cheaper price over a competitor’s, you must be certain that your competitor is selling both the same item and that they have sold enough of it at the higher price to make your price a legitimate “deal.” If your competitor is offering digital files for an inflated price, but hasn’t actually sold any digital files at that price, then your “cheaper” price isn’t really cheaper at all, and could be considered a deceptive advertisement.
Disclaimer: I am a lawyer but I’m not your lawyer! View my entire disclaimer here