Making sure to get your wedding planning business set up legally is super important. I know it's not the most fun part of going into business for yourself, doing something you love - but, it does need doing!! I thought I'd share a bit of my experience and understanding of small business legality to help you take care of all the basic legal necessities of starting your business.
Note: This is NOT professional legal advice and you should absolutely consult professional legal counsel for your specific situation. However, these are my own personal tips for getting you started based on my own experience.
You'll need to determine whether you want to structure your business as a sole proprietorship or limited liability company, which will depend on a few different variables.
A sole proprietorship is your most basic option, the easiest to set up, and essentially means that you, the owner and operator, are personally and legally responsible for anything related to your business. It also means that all profits or losses from your business belong to you. Come tax time all your tax information will go on your personal return and if you ever get sued, they can go after all your personal holdings as well.
A limited liability company, or LLC, is meant to protect your personal holdings from legal liability for your business. Your taxes can also pass straight through to your personal tax return, just like with a sole proprietorship. You have to file paperwork with your state and the IRS, but it isn't too bad.
In order to figure out which is the best option for you, find yourself a great accountant (which you'll want anyway!) They can advise you on the choice that will be best for profitability and so you'll be both legal and comfortable in your business. Nolo.com is a great place to look for someone.
Register Business Name
If you are planning to run your business under anything other than your given first and last name, you'll need to register your business name with your local and state authorities. This is known as your "DBA" or "Doing Business As." You can get this done at the local county clerk's office for around $25ish.
Permits and Licenses
You'll need to check the local requirements for getting appropriate business licensing. Sometimes a DBA will cover your needs, but in other cases you'll need further permits or licensing. You can check here to see what the requirements are in your state.
Taxes can really be one big headache....or they can be simple! If you start things out right, you'll save yourself a lot of that headache. Your tax filing obligations will be dependent on the business structure you choose and also what you are specifically doing in your business. If you will be selling something other than the wedding planning services you're providing (for example, I also sell flowers) you'll need to apply for a sales tax number. You can check out this resource to figure out exactly what your federal and state tax filing obligations are.
I use general liability insurance for my business, and you most likely will want to as well. There are other more inclusive insurance options available, so take time to determine which will be best for you. I purchase insurance through Hilcox to protect my business from another person or business claiming bodily injury, associated medical expenses, damage to property, etc caused by me or my business.
You'll want to make sure you have legal client contracts and forms for your services. If you're working with a lawyer, they can draft up everything you'll need, or you can purchase contract and business form templates to use. Even if you go this route, you may still want to consult a lawyer to have them look over everything. Here is a great resource for both template and custom legal forms for creative female entrepreneurs. (She also has an awesome course to learn all about the legal side of small business and it gives you access to many of the forms you'll need!)
Small Business Mentorship
We ladies need to stick together! Sometimes navigating the world of business and legality can start to make your head spin, so being well connected with other women who've been in your shoes and can offer great advice is awesome. I personally love the Savvy Business Owners and Rising Tide Society Facebook Groups because they are both really engaged and responsive places to get questions answered or support as you work through making decisions for your business. You can also check out this resource through the Small Business Association to find mentorship and counsel for running your business.
Alright y'all, I think that's enough to get you going! If you have any Q's don't hesitate to drop them in the comments below. I can't promise I'll be able to answer them, but I'll do my best to point you in the right direction!