Studio Owners: How is your business structured?

[vvv]

What state are you in?

That can be important, but generally, a limited liability corporation may not be the whole solution, but can be a good part of it.

My best advice is, contact a local attorney with small business experience. FWIW, keep in mind that there are yearly filings, a registered agent requirement, tax ramifications, etc., as well as liability consequences.

An attorney who agrees to be the agent, do the filings, etc., can be a big time-saver and "insurance policy" all on their own. And they can advise you on stuff, like insurance, like how to amortize assets, what expenses are acceptable (a home office? vehicle?) as well as be a resource for debt collection and even loan structuring if that stuff becomes necessary.

FWIW, a decent CPA can do a lot of the above, also - I have a PC and my accountant does the paperwork, gives tax advice, etc.

But my strongest advice is to consult a pro, at least to get started.

[A.David.MacKinnon]

My experience is somewhat subjective (being in Canada and not having a great handle on the US version of the terms) but that said I have been a self employed sole proprietor and part of an incorporated company and I'm happy to be a self employed sole proprietor again.
Incorporating gave me piece of mind about liability but taxes were a massive pain in the ass and the accountant bill quadrupled (even though the cash flow and nature of the business was virtually the same).
What specifically are your concerns about liability? Are you concerned about being sued for something related to the work? Personal injury while people are at your office? Concerned about having people in and out of your home?

Good, clear contracts, insurance and maybe moving the office out of your home can address all those concerns and might be a cheaper option.
Again, I'm no expert and I'm in Canada. Your results may vary.

[Waltz Mastering]

It'd be good to look into getting liability insurance that will help protect you and any business property. There's companies that specialize in this type of insurance where the yearly premium can usually start around $500 and go up depending on your deductible and the amount of coverage you choose. The liability insurance isn't really effected by whether you're set up as an LLC or SP. Calling a local agent might be the easiest way to go. gl

[cgarges]

In NC, it's not difficult AT ALL to register a business without a lawyer. It just takes a lot of wading through stuff to really find that out. Not using a lawyer saved me about $800 and there's really NOTHING different about how I do my taxes, now that I have a registered LLC. I just have to pay the state a fee for my LLC every April.

Chris Garges
Charlotte, NC

[vvv]

Interesting.

Does NC require keeping minutes like here in The People's Republic of IL? Are you required to have an agent designated to receive process? We also have a fee, but it's due on January 1 and state taxes are due on March 15. I think we are also s'posed to vote Democrat or sompin'.

[cgarges]

Nope. Just filing the proper renewal paper by April 15th. I did talk to an attorney about it early on, who recommended having a lawyer structure the whole thing so my business was legit, but another lawyer told me that none of that was really necessary, since my business has basically been legit since I was 16. For me, this isn't a hobby and I've been paying taxes on music income since I was in high school, so it wouldn't really take much convincing if anyone ever challenged me on it. But I do have the business registered as an LLC to protect my personal interests. I also have substantial liability coverage on my studio insurance policy.

Chris Garges
Charlotte, NC

[vvv]

Good onya, then!

I'm a PC but more for professional liability than anything else.

I will say, as one of the perpetually semi-disorganized, having a corp. account actually makes book keeping easier.

[oneflightup]

I reckon Insurance is the way to go.
I'm a sole trader (in Sydney Australia).
Business insurance covers me for $20 million public liability. So if anyone injures them self, I don't have to worry. It also covers fire and theft to a certain amount.

Best of luck!