TREAT YOUR WRITING AS A BUSINESS
Many times, we are only concerned with getting our book or story published. We don’t think about the ramifications of when we actually start selling them. Whether we write as a hobby or to become a full-time author, once we’ve sold our first book, we are now a professional author—and a business.
Have you done the legal paperwork to set up your author business, or publishing company, properly?
For most author businesses, a sole-proprietorship is all you need. This is also known as a “Doing Business As” or “DBA.” In the UK, it’s called a Sole Trader. A DBA is the easiest, and least expensive, form of business to start and run. It’s what I use for my publishing company. In the state I live in, it costs $25 to initially register my business and $18 to renew my registration.
Many authors believe they need to have an LLC for their business—because that’s what other authors are doing. Unless you are doing exposé type writing, most authors don’t need the “corporate veil” to protect them from lawsuits. And an LLC wouldn’t necessarily protect them in this case anyway. For tax purposes, an LLC is taxed on it’s underlying structure, ie a sole proprietorship or partnership. Also, the costs for maintaining an LLC aren’t justified until you make over $50,000 per year in your writing business.
For a more in-depth discussion, I highly recommend the book, Self-Publisher’s Legal Handbook: Updated Guide to Protecting Your Rights and Wallet by Helen Sedwick. She is a lawyer specializing in working with independent publishers.
I also talk about the different business structures in my book, Business and Accounting for Authors.
If you haven’t already created a business for your independent publishing company, check with your state on how to register your new publishing company as a DBA. If you later decide you “need” an LLC, you can convert your sole proprietorship, or partnership, into an LLC. You may never need one for your publishing business.