Starting a small photography business

[sprocket]

Hi there. We'll I've been getting a lot of cash work through a friends DJ company, shooting birthdays, functions etc. Getting to the point where me and a friend would like to step it up and register as a business.

So far we've gathered that we need and in this order;

Business TFN
ABN
- need a abn to register a .au domain.

Now there are alot of different options when applying for the above, and we want to ensure we're covered from a legal standpoint (For instance if someone takes us to court over a photo going to the web), and that sort of thing. We will be meeting with a lawyer friend in the next few days to gather a bit more clarity over the process.

In the mean time what do the lovely folk of AP recomend?

Thanks :)

[I @ M]

Talking to a lawyer is the best move that you can make, especially if they are very knowledgeable of business law.
Secondly, start looking at insurance, specifically public liability coverage to cover your backsides if an unfortunate event happens where someone is injured or other peoples property is damaged when you are photographing.

[kiwi]

Talk to an accountant first and foremost and even the ato provide good free advice

fir example there's gst to take into account if you earn more than 75,000 plus all th record keeping requirements you have, plus if there are two of you there is the fundamental question of organisational structure, partnership or company etc

[ricktas]

Lawyers and Insurance are only a small part of running a photography business in the scheme of things. Have a read of this for some things to consider: http://www.ausphotography.net.au/forum/showthread.php?73305-Becoming-a-Professional-Photographer

[MBsa]

My husband and I run a DJ business also (and i do photography as a hobby for now). I would do all the above recommended suggestions. the ATO are excellent with free advice for your business.
I would look at insurance as well, very important!!!

Good luck with it all though.

[sprocket]

Thanks guys, I'll give the ATO a call see what I can get out of them. We're certainly not looking at being a massive group at this stage its more of a large extension of a hobby that we'l be getting paid for. But it will need to go 'on the books' so to speak.
In terms of what type of company we will be? Well I can only assume (untill i speak to someone who knows) that we will be a partnership. Both parties entering in with neither any more liability than the other...

[kiwi]

It would probably be better that you both operate as sole traders in your own name at this stage, but yeah, talk that through. Also ask ATO the defination of hobby vs business and what applies to you.

[ctorry]

Totally agree speak to your Lawyer and Accoutant, it is important that you are set up correctly in the first instance rather than fixing them at a later date.

Questions to ask between Business and Hobby:
Is it run with the view to profit (business want to make a profit - hobby usually just want to cover costs)
Is it run in a systematic manner (do you keep records of the jobs, having a booking proceedure etc).

You may also like to think about business strucutre, may be be based on profit share, asset protection, etc.

Craig Torry
Accountant

[Bennymiata]

You may find that if you are turning over less than $50K a year in gross sales, that there is no need to register the company for tax purposes.
As there are 2 of you, and if you share the business equally, then you could do business up to $100K a year in gross revenues without being registered.

The advantage of not being registered is that you don't need to charge GST, and therefore not have to hand it over to the tax man, but, you won't be able to claim back the GST on stuff that you purchase for the business, like your lenses etc.
Already having equipment and then starting a business puts you in the back seat however, as you can't claim back the GST you paid on the equpiment you already have, nor can you depreciate them unless you sell them back to the business, but even then, the GST will be hard to claim back.

[ctorry]

Hi the statement posted by Bennymiata is not 100% correct regarding the business turnover, referring back to my previous statement, if you are looking to make a profit and organise the business in a systematic fashion you will need to register for income tax purposes. The business entity will only need to register for GST once turnover exceeds $75,000; however, you will not be able to claim back GST on your expenses,

As this would be your first year in business you may also be entitle to some tax offsets on your income tax, this would depend on your turnover.

Craig Torry
Accountant.

[kiwi]

The other key element of starting a small photography business is to start with a large one.


Sad but probably true from where i sit.:o

[kiwi]

...and the legal point you raise regarding being protected in case of a lawsuit is probably best addressed by talking to an insurance broker re personal and professional liability insurance - you dont need to be a company to get that by the way