Legalities Of Running A Business When You Are Not Yet 18 Years Old

Legalities Of Running A Business When You Are Not Yet 18 Years Old

Legalities Of Running A Business When You Are Not Yet 18 Years Old

I have a brilliant friend who started a baking business back in junior high school. She would take orders from classmates at school and bake cakes for birthdays or other special occasions. She would bring the cakes to school for her classmate to give as gifts to other students. She had a true entrepreneurial gift that ultimately carried over into her adult life where she is co-owner of a very successful business…though not a bakery!
While she seemed unique to us all back then, today we hear of successful minor businesses all of the time. From the young girls in Colorado who started their own lip balm company using the beeswax from their parents’ bee hives, to the boy genius who developed and sold a successful app.

Many minors have the talent, entrepreneurial spirit, and drive to run successful businesses, including photography businesses. However, how does a minor manage turning photography from a hobby into a successful business? Let’s talk about a few of the more significant hurdles you will face.
Can you enter a legally binding contract with your clients if you are under 18?
While I am putting the cart before the horse and talking about contracting on behalf of your photography business before setting up your own business, your rights and obligations under contract law has direct bearing on the type of entity you would be able to create. So, I start here.
In a few states under mostly limited circumstances, minors are able to execute fully binding contracts. In most states; however, while a minor can enter into a valid contract, the contract is usually considered “voidable” by the minor. What this means is that the minor contracting party can hold the other party (assuming they are an adult) to all of the terms of the contract, but the minor may avoid his or her obligations under the contract at any time. There are exceptions…there are always exceptions, such as if the minor turns 18 and continues to perform under the contract, which is known as ratification. As you can imagine, while this seems all well and good from your perspective, having the ability to get out of a contract at will likely creates some hesitation from a client’s perspective.
Can you formalize a business in your state as a minor?
As I have mentioned in previous blog posts, I tend to favor a limited liability company, or LLC, for photography businesses. Whether or not someone under the age of 18 can form an LLC varies from state to state. Several states specifically provide that someone has to be at least 18 years old to form or organize LLCs , while other states are silent as to the age of members. If you are in a state that does not specifically preclude you from forming an LLC or being a member of an LLC, your ability to void contracts at will is something that would likely impact your ability to act with authority for your organization. More likely than not, being an LLC Member will be extremely challenging at best. In these instances, a sole proprietorship may be an easier option for you in terms of getting your business started, but a sole proprietorship will not shield you from liability if you could be held liable for your business activities under the laws of your state.
Can you open a business checking account with your bank if you are a minor?
So you formed your photography business and have started making your own money. That is great. Where are you going to store or save income? Whether you can open a business or personal checking or savings account will depend on the law in your state and each individual bank’s policies and procedures. In many cases, a parent has to be joint owner on a minor’s bank account. If you are in a state that does not allow an individual personal bank account, chances are you also will not be able to open your own business account as the requirements may be more stringent for business accounts.
I may need some financial assistance for my business, can I access credit as a minor?
Accessing credit as a young adult, much less a minor, can be difficult. Typically, you have to have a credit history in order to get credit. Therefore, without a credit history and a full-time job, it will be very hard to open a credit card account without assistance from an adult. You may be able to get a debit card with your bank account, but that will limit you to expenses that are within your account versus being able to “spend more to make more.” That may not be a great lesson for spending within your means, but isn’t always the best limitation when growing your business.
What role could my parents play in all of this?
In the end, many of the hurdles you will face as a minor could be overcome with your parents’ involvement in your business – they could sign mutually binding contracts on behalf of the business, establish an LLC to limit liability, jointly own bank accounts with you, and cosign on loan or credit card applications or allow you to be an authorized user on a credit card account.
This is not without personal risk on their end, as their assistance can impact their credit score and rating. Additionally, if your parents get involved in your business, I would definitely reiterate my position on setting up an LLC. Even though you may not have significant personal assets, your parents likely do. Therefore, they will want to protect themselves as any other adult business owner should.
If you are passionate about starting a photography business as a minor, I say go for it, but have a plan to address these issues so you don’t become discouraged at the outset.

5 Legal Potholes Photographers Can Avoid (but don’t!)

5 Legal Potholes Photographers Can Avoid - But don't!

5 Legal Potholes Photographers Can Avoid - But don't!Don’t hit that pothole.

Trust me, I did it a few weeks ago.  

Ended up with two flat tires, two broken rims, and my car in the shop for a week. This led to not only the stress of being on the side of the road with three kids trying to call a tow truck, but without our vehicle for a week and extra costs of a rental vehicle.  I didn’t even mention the stress caused and extra money the insurance didn’t cover.  All because I didn’t see the pothole.  I drive that road every day, I should’ve known better. I KNEW it was there. But I was focused on speed and other cars on the road. 

All because I didn’t see the pothole.  I drive that road every day, I should’ve known better. I KNEW it was there. But I was focused on speed and other cars on the road. 

Don’t do this in your business.

Many think that contracts, by themselves, will protect from legal potholes. Yes, contracts are a great way to set expectations, forms the legal relationship, and protect your photography business and I find that many photographers in the industry understand their value and have implemented in their business.  But they are not the be-all and end-all for protection. 

There are some top legal potholes of running a photography business that may be completely overlooked and may cost you time, money and potentially your business if not paid attention to before an issue arises.


#1 Business Prevention (Contingency Plans)

Could you be in danger of losing it all?


Death. Divorce. Disability. Dissolution.

Do you ever think about what would happen to your business if there was an emergency? If you or your spouse got sick? If there was an earthquake, flood or fire? If you or your husband died unexpectedly? If your family declared bankruptcy? If you needed to take a leave of absence to take care of your parents?

Just because you know all the ins and outs of running your business does not mean that’s the best move for the future. You need to be set up in case anything keeps you from doing that—today, or you run the risk of it all coming to a full stop.

That’s less money and more stress at home.

:: That’s an inbox that piles up with unanswered inquiries.

:: That’s clients who can’t get their unedited session photos.

:: That’s bills that go unpaid.


How do you prepare for the worst so your business can run at its best?

It only takes an instant for something to go wrong that can put your business on hold. Everything from natural disasters to medical emergencies can affect your business’s wellbeing—and the wellbeing of your family too. What will happen if you’re not able to bring in that extra income?

Unfortunately, most of the time we don’t think about setting up the simple safety nets that could make all of it much easier. 

Get your contingency plan written out and available for you (or those you choose in life) to use as a guide should something happen.  TheLawTog®’s Oh Snap kit helps to get you started on this! You can keep it all digitally, or store in a safe. (Hint: It’s recommended to have it multiple places).  


#2 Intellectual Property Defense

Protecting intellectual property is a real and serious necessity for business owners in this digital age. The idea that anything posted online is “fair game” to be used by others is the result of misconceptions and misunderstanding of intellectual property laws and respect for the creators.

Lawyer bills and anxiety rack up when you are unsure how to defend your work.  Have a Defense Kit in your arsenal of business tools to easily and affordably put out any infringement issues.  Defense kits should include documents such as DMCA take down notices (to send to the Internet Service Provider), Invoices for Commercial use, Outreach letter and Cease and Desist templates.


#3 Client Issue Tools

When a client issue arises, I see many photographers turn to Facebook groups and ask “what now?”   Having a pre-drafted template to start your communications (such as a breach of contract letter) can help you to formulate a response to clients in a more efficient, quicker and complete manner than piecing together advice from strangers on the Internet.    

Note: I’m not saying to swing at clients with legalese – having a formal letter can be a great structure for you to formulate a nicer response when trying to put out fires in your business.  The benefit to having a formalized letter is – you have it when you need it and don’t have to scramble to find an attorney or get overwhelmed and ignore the entire problem.  At TheLawTog®, I always recommend discussing person-to-person with a client before bringing in legal guns. But should you need, a Client Issue Pack can have you prepared.


#4 Date Your Attorney

Even if you have never had a need for an attorney, make sure you have a good working relationship with one just in case you do need them help you at a moments notice.  It’s easier, more effective and potentially cheaper, to have created a relationship with a local attorney to reach out to should an issue ever arise.    I find that many photographers anxiety and bills rise when they haven’t cultivated an attorney relationship prior to an issue arising.  


#5 Have YOUR OWN Understanding

Yes, a good attorney  is worth their weight in gold, however, you need to have a working understanding of all facets of your business, ESPECIALLY legal.  If you are looking to understand business formation (sole proprietor, LLC, Corporation, etc), you can definitely have someone easily fill the documents out for you.  But having someone else do all the work without providing business strategic concepts for future changes leaves you in the dark.  

Business formation is not a “check the box” and never come back.  What happens if you have to move or make a change that can simply be done through filing state forms? The State is unable to provide you legal advice, and you’d be invoking another attorney bill for potentially simple questions and/or changes.

Further, you’re relying on a neutral third person with no “skin in the game” for your business to help make these strategic decisions. And unfortunately, most professionals (attorneys and CPAs) won’t provide the business strategic advice at the time you may truly need it.  Take for example, what if you choose an LLC this year, but then grow so much that you want to change over to Corporation for the tax benefits or choose an LLC with an S-Corp tax election?    The recommendations may not come around until your yearly meeting with the professional and you could have lost money at that point.

For these reasons, I do not say to get rid of an attorney or CPA, but educate yourself. You, as the business owner, have a responsibility to have your hands on these documents and how things work.    Further, having the working knowledge allows you to recognize if (hopefully not) you’ve hired a less-than-adequate professional (because let us face it, they are out there!)

BizRevamp® provides a photographer/lawyer insight into topics such as taxes, business formation, retirement, insurance, and more.  You can use this as a stand-alone education site to DIY your own business workings, or use it to prepare for when you go into an attorney.  


What type of lawyer do I need for my photography business?

What type of lawyer do I need for my photography business?

What type of lawyer do I need for my photography business?So you’ve realized your business needs some legal protection overhaul, whether it is a major overhaul or minor tweaks, but you need guidance on where to go.  

This is figuring out the type you need, the price you may pay, as well as how to find them.


What type do I need?

Figuring out the type of lawyer you need is extremely important.  In theory,  barred attorneys can take on pretty much any case – it doesn’t mean they can or should.  Attorneys have an ethical duty to have a competency to handle your case, but even more than that, you should want an attorney who specializes in the area that you’re seeking assistance in.  Some areas of law require more understanding than a cursory understanding or quick flip through in a “crash course” guide can provide. 

I hate to throw my lawyer folk under the bus, but some try to talk on all types of cases but are not well equipped to do.  Think of the adage,  jack of all trades but master of none.  Legal isn’t something to mess with.  Get someone who is specialized.  Think of it this way, while a medical malpractice attorney may have taken tax law in law school 20 years ago, doesn’t mean you probably wanting them advising you on tax strategies and actions.

Here is a quick and dirty checklist to take a gander at the type of lawyer you may need depending on your legal needs.

  • Contracts – Small Business/Contracts
  • Business Formation – Small Business
  • Copyright – Intellectual Property and Small Business
  • Tax – Tax and Small Business
  • Trademark – Intellectual Property
  • Review of business affairs – Small Business/Contracts

General practice law firms may provide specialization in one of these areas.

FYI: Read “Should I hire a lawyer or CPA?” for any business formation tips (Hint: The answer isn’t always to hire a CPA!)


It is important to note, you need an attorney that is actively barred in the state of where your business resides and/or you are engaged in business.   Advisement by attorneys from across state lines can borderline unethical, not be conducive to the type of advisement you need, as well as leaving you in a lurch.  

Consider this also, if you take advisement from friend-of-a-friend Sally who lives in Tenneesee while your business is in Texas and you end up with a legal issue – is Sally going to come to Texas to help you settle the issue?

Probably not.  

Which results in having to start all over with a new attorney and potentially cost you more financial and time resources.

There is safety in having a path of recourse should you run into issues in business.  Having a friend of the family or a family member do legal work can complicate personal relationships if a situation comes up.  You want to have the ability to pursue potential malpractice action or have someone to fix the issue at their cost.


How much do they cost?

Unfortunately, I can’t give you a hard cost.  Lawyers, much like photographers, all have different business models. These can range from a retainer contract arrangement, to hourly, through flat rate fees.   

#1 Get quotes

The goal going into the legal relationship is to between three to five quotes in your local area based on the type mentioned above.  Balance your budget with legal protection needs to identify the attorney you’ll inquire to.  

If you’re unable to afford an attorney, get this cost into your cost of doing business (CODB) now! You can’t afford to run a business without legal protection.

Hint: You can interview firms before hiring.  Even if you aren’t talking to the lawyer specifically, their staff should be able to discuss and answer questions about whether they are equipped to handle your specific legal needs.


#2 Take information with you

Before walking into the office, take a checklist of items in priority order.  This will save you time relaying what you need, and will give the attorney a quick roadmap to survey (saving time – especially if you’re being billed by the hour.)

Keep in mind, majority of lawyers have never run a photography business! So while they know the legal side, you need to provide context on how the industry runs, as well as your specific business policies.

It’s a super plus if you’re going in for contract drafting and have pooled information (SHAMLESS PLUG: Such as my contract forms) .  I have examples in this article to show how templates and checklists saved one photographer $340 and 1.9 hours of time. 


How do I find these lawyers?

Come see me on ShowIt Live – Presenting Legal Blogging

Come see me on ShowIt Live - Presenting Legal Blogging

Come see me on ShowIt Live - Presenting Legal BloggingHave you ever worried that you might be exposing yourself to legal troubles when you blog? Do you worry about posting photos of guests you don’t have releases for? What rights do you give up when you submit your photos to other blogs for posting?

Their legal expert, yours truly, will be there to help clarify those murky waters and give you a guide for moving forward. I’m an expert at managing legal issues that affect photographers in all areas of your business.

Join me with your questions live!

Live on event date: 10/13/2015 at 1pm Eastern

Come RSVP here

View it live here

Are your hands shaking?

Are your hands shaking?

Are your hands shaking?You see an email notification flash on your smart phone. But you can only see the first few lines. And they go something like this “Dear Photographer, I hate to write this but we are not happy…..”

Right there. Your stomach plummets out of you and thuds on the ground.

Something has happened, and you are praying you have done everything right and have all the rights protections in place to shield your business if this spark ignites into a forest fire.

As you race to a computer to read the email in full-screen, your hands are shaking. Your confidence is shaking. You’re beginning to second doubt yourself.


I see this over and over from you guys. And it kills me. I get emails saying things like this:

I got blindsided by this complaint from a bride’s mother that I didn’t get a picture of the caterer with the catering table. It was never discussed in the shot list. And now they are picking apart everything I did and are threatening legal action.

I need to take my clients to court for non-payment but I don’t have my license or other permits yet. Will I get in trouble for not being legal?”

I had a client’s daughter trip-and-fall down the stairs leaving my house. I’m not registered as a business with my county and I don’t have insurance. Are they going to win if they sue me?


I see these emails all the time and my heart breaks thinking how easy it would be to prevent, or at least diminish the probability, of issues occurring if all businesses set aside time to reevaluate their protection tools yearly (if not more).

The problem I see is – it’s not that you, photographers, don’t want to protect their business. You do. And it’s not that you haven’t considered policies, you have. It’s just that you only know what you know, and don’t know what you don’t know.

And because of this, your confidence is shaken. And clients can smell it, the fear coming off of you.

When a client tries to push boundaries, they are scared to stand firm.

When a client gets hurt, it’s too late to do anything.

When a client quits paying, the photographer is at a loss.


This is why preventive tools to protect your business are a must have.

If you have all your protections in place, then you can be confident to stand firm on business decisions, and be confident in making the best customer service.

These tools include: business formation, contracts, appropriate licenses permits, and insurance.

One of the biggest disservices I think that online groups give is to further this idea if you have ONE of these tools, you’re protected.



Protection Tools

Each of these tools do offer some protection – but they work best in layers.

First, having proper lawyer-drafted contracts implemented in your business will help to inform customers of policies, provide hurdles to any issues a customer may have and provide a legal document to be referenced in situations.

Next, you have a layer of a liability insurance policy. By having this layer, you can defer clients to the company to resolve any potential liability issues that arise. This frees you up to focus on your business and (hopefully) reduce costs to extinguish any “fires” that may come up.

The core layer would be your business formation choice. For example, choosing a Limited Liability Company divides the business and personal assets for protection.  With the formation at the core, if customers get through the last two layers then they have to engage in a legal transaction such as court or mediation for a resolution.



Take for example, the photographer above who had the client who tripped and fell down the stairs. She didn’t have liability insurance but she was an LLC – so when trying to settle the matter she had to go all the way into court to settle it. Whereas, had she had a liability insurance policy in place, she may have been able to have it handled in a shorter amount of time with a lot less money.

Another example from above, the bride’s mom who had a fancy for a photograph of the chef with the catering table.   While there was a contract in place, having specific insurance policies in place could also deflect any potential law suit as well.

These are just two examples that show you how these tools are work together as multiple layers of protection.


The Sad Reality

Sadly, many of you will set up shop and never revisit these tools until you have an issue arise. By then, it is too late. You need to be revisiting these tools to make sure your insurance policy hasn’t changed, your contracts are legit, and your business growth hasn’t demanded a change in formation.

If you are one of those that isn’t even that to point yet, make sure you get these tools in your tool belt before even taking clients.

If you think you have it on lock down, consider this it is cheaper and easier to be protected by layers (and keep these layers up to date) than trying to scramble when an issue occurs.


And this is why you’re going to see much more information from me that will centered on protection. My goal is to push preventive methods rather than “clean-up-on-aisle-four” methods.  

Because the more protected you are, the more confident you will be. This will help you stand firm when clients are trying to steamroll you. It will give you the ability to discern which policies to relax in the name of customer service.

This is just the beginning of some big changes here and y’all are going to get the benefit. In the next few weeks you’re going to see a schedule of monthly free webinars, BizRevamp will open for enrollment (09/08), and a few other things I have up my sleeves.