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Setting Up a Wedding Business: Legal Considerations

in Business of Weddings
Photographer captures pictures of the bride and groom at their wedding reception.

Depending on where you live and the type of service that you offer, you may need to obtain some basic legal and business documents in order to conduct your business legally. If you have never been self-employed or set up a business before, you might want to consider hiring a lawyer for an hour or two to help walk you through the basics of setting up your particular type of business. Even before that, however, there are plenty of resources online which can help with learning about establishing a small business and forming a legal structure.

Here are a few resources to get you started:

The five primary business structures are:

  1. Sole Proprietorship
  2. Limited Liability Company
  3. Corporation
  4. S Corporation
  5. Partnership

While it is outside the scope of this website to offer legal advice, it may be a lot easier than you think to get the paperwork you need and get to work starting your business. In many cases you can set up your business as a sole proprietorship (the simplest type of business entity) and use your own name as your business name. However, keep in mind that as a sole proprietor, you’ll personally be responsible for any liabilities your business may incur—whereas with an LLC or corporation, any personal assets are protected from debts or claims to your business. If in doubt, it would be well worth your time to seek the advice of a legal professional as you begin to set up your wedding business.

In addition to choosing a legal structure, you’ll also need to obtain and fill out some basic paperwork. Some of the most common items you may need to file include:

  • Business License
  • DBA (“Doing Business As”) Statement
  • Seller’s Permit (if you will be selling physical products*)
  • Tax ID #**

* If you are selling a product, you may also need to charge sales tax depending on where you live. Be sure to find out when obtaining your seller’s permit.

** If you are operating your business as a sole proprietorship, you can choose to use your own social security number as your tax ID number. Tax ID numbers can be obtained through the IRS:
http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-(EIN)-Online

Tip: A quick Google search for “starting a business in [fill in your city or state]” is a great starting point for determining exactly what paperwork is required in your local area. Your local government’s website will more than likely have all of the forms you need available online, with instructions on how to file and any fees associated with filing.

setting up a business bank account

In addition to filing the necessary paperwork, you’ll also want to set up a separate bank account, even if the business will be under your own name. This is important for a couple of reasons:

  1. For tax purposes, you will need to demonstrate to the IRS that you are running a legitimate business—and part of that means keeping personal and business expenses separate from one another.
  2. Having a separate account makes it much, much easier to stay organized with your finances—at tax time and throughout the rest of the year.

Note that your bank will most likely require a copy of your DBA statement to open an account under a fictitious business name.

Tip: If you want to keep things simple at first and if you are doing business under your own name, you don’t even have to open a true business checking account right away; a personal checking account that you only use for business activities is perfectly acceptable to the IRS—the key is that it is a separate account from your personal finances. Also, make sure to shop around when you look at banks. Many local banks and credit unions offer free checking accounts, and even free basic business accounts.

liability insurance

Depending on the type of service you provide, you should also consider purchasing some form of liability insurance for your business, particularly if you are a sole proprietor. If someone were to sue you for any reason and win, you could potentially lose business as well as personal assets (in the case of a sole proprietorship) if you aren’t insured. There are three main types of business liability insurance available: general, professional and product liability insurance. Discuss all three with your insurance agent to determine which one(s) would be appropriate for your particular line of work.

Tip: If you operate your business from home, you should also consider purchasing home-based business insurance, as most homeowners’ insurance policies do not cover home business losses.