Please note that this article serves only to remind you that these things need to be considered and is not intended to be legal advice. Laws and options vary from country to country so I will not be covering anything in too much detail. Do your own research in each area to see if it has relevance to your business.
Business Name Registration
In general, the majority of artists work under their own name, which usually doesn't need to be registered as a business name since your birth certificate is proof of your legal standing as a person.
Registering a business name is kind of like giving your business a birth certificate. Your details are added to a public registrar, which anyone can search to find specific details about your business (usually limited to who owns the business, its structure, when the name was first registered and contact details).
Once you have a business name you can open bank accounts, apply for loans and sign contracts under the business name instead of your own name.
In Australia if you run a business under any other name than your own you will need to register it as a business name (You'll also need to register for an Australian Business Number (ABN) which can be done at the same time). You still must register the name if it is a variation on your own name e.g. the name 'John Smith & Co' would need to be registered as a business name.
Why Register a Business Name?
Registering a business name gives your business a legal structure that is separate from yourself. It makes it easy to clearly separate your life, in particular your finances, into business and personal.
It also adds some credibility when putting in tenders for job contracts and applying for any kind of financial assistance. People can clearly see that you're serious about your professional practice and can easily find out key business details if they need to.
That's not to say you can't look and be professional using your own name - it is your brand after all. People generally expect artists to work under their own names - but it can add another level of credibility in certain situations that could be beneficial.
Contrary to what people think, registering a business name will not protect your personal finances or assetts from being sold should the business run into trouble (even registering your business as a Company rather than a Sole Trader will not necessarily protect your personal assetts).
Personally I registered and work under the business name 'Art Time Productions'. I mainly registered for the professional credibility it offered working as a freelance artist/graphic designer. Most of my work came through other businesses so the name gave the impression that I ran a studio that was more than just me freelancing by myself.
These days my business name covers all my creative pursuits that involve earning a living from my art. Back when I registered it, in 1997, I always envisioned that some day I would move into making movies, so I added the word 'Productions' to make me sound more like a film studio.
However you may want to opt for a shorter name because you will end up writing it out a lot. Particularly if you register it as a domain name for your website and then attach an email address to it.
Taxes, Tax Returns and Licenses
Tax laws, tax payments, income tax returns and licenses will vary between countries, the main point I want to make here is that you should familiarize yourself with anything associated with all three that relates to your particular brand of art, its creation and earning income from it.
If you are required to pay tax on your earnings then make sure you do. If, like Australia, you are required to charge a goods and service tax (GST) on top of your pricing (compulsery once you reach a certain level of income), then make sure you do.
If you are required to lodge an annual income tax return then do so. Learn what you can claim as expenses and what you can't. Learn about assett depreciation etc.
If you're working as a Sole Trader (i.e. you own the business, make all the key decisions and bare all the responsibility) then it's likely you can just include the business on your personal income tax return and won't need to submit a separate return for the business.
For the most part, the majority of artists don't need any special licenses to run their businesses (unlike say a Hotel or Bar that needs a liquor license to sell alcohol). However it's always better to check if your specific art form requires any special license and, if so, make sure you keep it current.
Most of this information can be found out through specific government departments relating to Taxes and Business. Chances are the information you need is on their website so staying informed is potentially easy.
If any of this stuff does confuse you, particularly relating to tax and filing income tax returns I strongly recommend you consult a tax specialist or hire accounting services to assist you.
Legal Obligations to Clients/Customers
As with Tax and Licenses, your legal obligations to clients and customers will also vary between countries. In the most general terms you are required to deliver your product or service legally and to an agreed standard within the law. If you sign a contract then you are legally bound to the terms of that contract to deliver your products or services as agreed upon by both parties.
If anything goes wrong you should endeavor to resolve the issue in a professional manner. Which may include but is not limited to, redoing the work, fixing the product, refunding part or all of your client or customer's money.
Failure to do these things could result in legal action being taken against you. Which can easily become an expensive exercise, financially, and damage the reputation of your business, especially if you are legally in the wrong. It can still have an impact even if you are found to be legally doing the right thing.
If you are using contracts or being asked to sign contracts make sure you understand them fully. If not seek out a contract lawyer for advice. Contracts usually can't be used to waive legal rights you or your clients have as a citizen but they can be a minefield for all sorts of unexpected fine print.
Again, your legal obligations to clients and customers can usually be researched on the relevant government department's website. Be sure to research this area and know what to do if things do start to go pair shaped.
Superannuation, Healthcare and Income Protection Insurance
This heading is the 'Employee Care Plan' from this post's title. People who work for companies generally have provision for all three included as part of their work agreement. Employers may contribute to employee superannuation funds, provide healthcare benefits and allow for paid sick leave.
Once you start working for yourself, employee care, i.e. your care, become your responsibility. None of them are legal obligations and most are often neglected and ignored by freelancers entirely. Especially because each usually involves monthly or annual payments to maintain that can be expensive when you're working with a very modest income.
All of them are require paying money for things that are either far off in the future or may never even be needed (you've probably heard of people who've never had a sick day off in their entire working lives right?).
At the very least, you should do your best to save money for those times when you are sick or can't work for any reason, so you don't suddenly find yourself desperately looking for money to pay the bills or your rent etc.
Once you develop a more stable income working for yourself you may want to start looking at various policies available to self employed workers that will come with more benefits than a healthy savings account can provide.
The important thing is to look out for yourself. Start thinking about a retirement plan now, and have strategies in place for when you get sick so that you don't just try to suck it up and work through the illness. Be sure you have the means to see a doctor and that you do have money to help you through any financial slump. (Don't get into the rut of thinking about getting a 'proper job' just because you've hit a rough patch).
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All of the above are things you need to think about. Maybe not all at once but definitely at least be aware that you will need to look into each at some point. Tax obligations is probably the biggest one. Many a business has come unstuck simply by not paying or flat out trying to avoid paying tax. Do the right thing from the outset and you'll be less likely to be sunk by a big tax bill.
In the next post I'll return to the art side of things where I'll look at deciding what art you should create and how to find a market for it.
This post is part of a series called Creating a Mobile Independent Artist Business. Read earlier parts at the links below:
Part 1: Introduction and Equipment
Part 2: Business Software
Part 3: Creative Software
Part 4: Social and Marketing Software Plus Your Website
Part 5: Documenting and Sharing Your Work in Progress
Part 6: Photographing and Preparing Your Art for Printing
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