At some point during any freelancer’s career, the question of whether or not you should form your own business will eventually come up. You’ve probably heard there can be benefits to creating a business entity, but as a self-employed individual, you likely don’t have someone you can easily turn to that can explain exactly what those benefits might be or how to take advantage of them.
You might not realize it, but as a freelancer you’ve already started a small business as far as the IRS is concerned since your freelance income is reported as business income. The problem with not having a true business entity is that there’s no barrier between your business and personal assets. If a client sues, your personal property can be taken to pay for business’ debts. Forming an LLC or incorporation protects your private assets by creating a separate entity for your business that is responsible for its own debts – leaving your personal property safe.
Keeping your private and business accounts separate can also make tax season easier as it becomes clearer whether expenses were personal or not. And speaking of taxes, you could also enjoy additional tax savings depending on the specifics of your business.
Properly setting up a business for your freelance work is important, but it doesn’t need to be difficult, time-consuming or expensive. You might be self-employed, but you’re not on your own. There is a business formation service packaged with comprehensive legal plans starting at $145 that allow you to speak with an attorney who can guide you through the process while providing consultation, document review and additional legal assistance while you get your start-up running.
Creating a business is a serious matter. From selecting the proper entity, to filing the required documents, you can have legal help every step of the way. These legal services can help keep you protected from disgruntled clients with detailed contracts ranging from work responsibilities to Non-Disclosure Agreements. These services don’t just help keep you safe, they also protect your clients – and that’s simply good for business.
Look at the following examples to see how independent freelancers have benefited from having knowledgeable help from business legal services:
Alison R. – Graphic Designer
Alison created a new logo for the owner of a pet blog who wanted to rebrand their website. However, eight weeks after the work was completed and the new design was delivered, Alison was still waiting for payment and her client was no longer responding to her emails or phone calls. This can be a common occurrence as debt collection is one of the most frequent issues that freelancers face, and Alison was counting on this payment to cover her bills.
Fortunately, Alison recently received help forming a business entity, and the service gave her the opportunity to consult with an experienced attorney from a local law firm thanks to the included comprehensive legal plan. Because Alison had the ability to speak with an attorney, her law firm was ready to draft a collection letter on her behalf. Where Alison’s attempts to receive payment had failed, a certified letter from an attorney spurred her client into quick action. Alison was able to get paid for her services without having to take further, more-costly legal action. Knowing that her business is better protected has given Alison the freedom to continue to grow her freelance career with confidence.
Carl P. – Video Editor
Carl has worked as a freelance video editor for the past two years. As his portfolio grew, so too did his work expenses. The suggestion to form his own business has come up a few times, but Carl finally decided it was something he should seriously consider after his accountant told him he could potentially save on taxes by choosing an appropriate business entity. The issue was, Carl had no idea which entity option was right for him and making the wrong decision could leave his business unprotected and possibly negate any potential savings.
Thankfully, starting the process to create the right business entity can be as simple as answering a few questions online. By seeking professional assistance to form his business, Carl was able to consult with an attorney who filed all the necessary paperwork on his behalf after first determining the entity type that was right for him. The decision to pay $145 to receive help with forming his business allowed Carl to save on taxes and will ensure that both his business and personal assets are protected.
Frank D. – Copy Writer
As a freelance writer, Frank regularly enters into a contract with each new client. He typically uses the same standard contract for all his work, but a new client wanted to use a different contract that Frank was unfamiliar with. Hoping to fully comprehend the details of the document before agreeing to it, Frank decided it was time to protect himself by having the new contract reviewed.
Frank’s first action was to create an appropriate business entity with a service that also provided an affordable legal plan. Frank can now ensure his contracts include openly defined expectations such as word length and number of revisions. Thanks to his business legal plan, he can also have an experienced attorney review the document, so Frank doesn’t agree to contracts that could unknowingly waste his time or money. This gives Frank more time to focus on his writing and worry less about legal issues.
You’ve probably thought about forming a business entity in the past but have put it off because you’ve done fine running your freelance career without it thus far. Just because you don’t have debt problems now, or haven’t been sued, doesn’t mean it will never happen and an LLC or incorporation helps limit your personal liability. Life can be unpredictable, and you need to secure your livelihood now before an unforeseen issue threatens to take it away.
Taking the time to properly protect your freelance career can make you more prepared to deal with problems that can pop up in the future, giving you more time to do what you love without worrying as much about the uncertainty of tomorrow.
Creating a business can be stressful and complicated, but it doesn’t have to be. To get started, all you need to do is answer a few questions online and an attorney will call you back within a matter of hours to help you choose which entity type best fits your needs. Your attorney will then create the articles of organisation to file with the State on your behalf. Visit launchedbylegalshield.com to learn more about the most comprehensive business legal service available.
For $145, you can set up an entity with the only formation service that allows you to speak with an attorney and includes an extensive legal plan that offers legal consultation as well as document and contract review. Best of all, your attorney is available to write letters or make phone calls to help with debt collection, contract enforcement, cease and desist notices, trademark infringement, copyright violations, breach of contract notices and more.
Go from a self-employed freelancer to a small business owner to push your career to the next level.
The examples above are for illustration purposes only and are not actual accounts. This gives a general overview of LegalShield’s Launch products and legal plan coverages. The benefits described are not available in all states. See specific detail on terms, coverage, pricing, conditions and exclusions. This is not intended to be legal or tax advice. Please contact an attorney and tax professional for any legal and tax advice or assistance.