Forming an LLC for your art business

Hi everyone. I’ll be joining DPW soon as my first foray into the business of selling my art. My question is twofold. 1. Do any of you operate their art business as an LLC? and 2. For those of you who do operate as an LLC, do you use your home address as the place of business or do you use a virtual address (UPS, PAKMail, etc.)?

Hi Jack,

My opinion is an artist does not need to, and likely should not, form an LLC. The two reasons to form an LLC are to protect you from liability and/or to organize your business as a partnership. DPW is organized as an LLC for both of those reasons. As an individual artist, you really don’t have any financial or legal liability exposure and don’t need a partnership.

If you don’t need the benefits of an LLC, then you certainly won’t want to suffer the added complexities and costs, which are significant. You would have to register and file paperwork with your state, pay a yearly fee, and file a yearly annual report, however the biggest inconvenience is you have to file two separate sets of tax returns - business and personal - at both the state and federal level.

Instead, I recommend doing business as a sole proprietor and operate under your name, which works really well for an artist.

We are looking forward to having you with us!

David

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…also, if you don’t have employees you may not need an LLC

David,

Thanks for the input. As you mentioned, the biggest reason for operating as an LLC is the legal liability isolation from your personal finances. While I would never plagiarize another artist’s work, in the litigious world in which we live, I was looking at the LLC as a possible isolation in the event that I was wrongly accused of copyright violation. But after your response I dug a bit deeper and found that in that type of case, the LLC would not prove a help. In a copyright case, the individual would be sued, and not the LLC because in the art and writing world it is the individual who would be the culprit and the LLC would not provide sought after veil. With that knowledge and your kind suggestions, I will follow your advice and operate as a sole proprietor. I still need to get all my ducks in a row but intend to become a member soon.

Thanks,
Jack

Thanks Tara. There is such a thing as a single-member LLC, but my further research shows that to just be a more complex form of sole proprietor. I really appreciate your feedback. As I’ve looked through some of the postings on the art talk forum, I’ve been so happily impressed with how helpful all the members are with each other.

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I’ve never heard of an artist having an LLC. My son has one he will soon terminate, for an unrelated enterprise. In CA, the annual fee is $800. Unless you make far more money out the gate than most artists make in a lifetime, I think the chances of being falsely accused and sued are approximately zero.

Thanks for the response Connie. I’ve decided not to form an LLC. I’d discovered that an LLC would provide no protection anyway for the one scenario I had thought of. As for the cost, Colorado is significantly less expensive for its annual upkeep than California is. I’d estimated that the cost here would be more like $100 a year. $10 for the annual report to the state and about $90 to keep a registered agent. In an effort to encourage business development, our state government just passed a law to make the cost for filing a new LLC $1. Pretty cool I thought, but as it turns out not necessary for me.