By Leon Harris
Anyone who has done the self-employment shuffle will agree that this manner of earning an income is a mixed bag, just like most other jobs. There are certainly some major benefits to working for yourself; you can skip the commute, you get to be your own boss, and you can set a flexible schedule and take vacations whenever you want.
On the downside, you have to hustle for work, you don?t get benefits, and you lack some of the many protections that employees under the corporate umbrella enjoy. As a freelancer, you?ll also face a very different set of legal issues than your 9-to-5 counterparts. And what you don?t know could definitely hurt you.
So here are just a couple areas of the legal landscape that you?ll want to address as soon as possible.
First and foremost, you need to protect yourself.
Without the shelter of a company to hide behind you could find your personal assets on the auction block should you land in a lawsuit. You might not think this is possible; after all, it?s not like someone is going to slip and fall on your front steps (especially if you are smart enough to meet clients elsewhere rather than having them come to your home). But suppose a client or content creator sees your work and decides that you have engaged in plagiarism, copyright infringement, or patent theft. They could certainly take you to court to hash it out. Or if a client determines that you provided shoddy work and they have already paid you, they are well within their rights to come after you for reimbursement.
For these reasons it?s not a bad idea to consider forming an LLC (limited liability corporation) or an S-corp.
As an employee or shareholder of a corporate entity you can receive pay without being held personally liable in situations where the company is sued. This means that personal assets like your home and bank accounts will not be subject to seizure in the event that you lose a lawsuit. Only the assets held by the company can be taken (and if you pay out the majority of earnings to yourself, the losses will be minimal).
You also need to consider making a general contract for doing business.
Although many clients may have their own contracts in place for freelance workers (often including clauses like NDAs and such to protect their proprietary information), these documents are not designed with your best interests in mind. In truth, a basic contract for work could be as simple as a purchase order with the job to be done and the pay to be given. But if you have further legal concerns, such as wanting to retain the right to use anything you produce in the promotion of your business, for example, you need to spell it out in the contract so you have a legal leg to stand on if it comes to that.
Finally, there are tax laws that pertain to self-employed persons.
For example, you?ll need to be aware of regulations regarding deductions, which are a saving grace when it comes to filing your annual income tax. As a freelancer you may claim all kinds of write-offs for your business, like a home office or work vehicle, travel expenses, business meals, equipment and supplies, and even research and development, just for example. But you don?t want to raise any red flags and bring an audit down on your head, so it?s important to know exactly what you are allowed to claim. You might never have to hire an accident or injury attorney in your line of work, but if want to avoid legal issues that are likely to plague freelancers, you first need to be aware of potential lawsuits and then work to protect yourself within the limits of the law.
Leon Harris is a contributing writer for Hornsby Law, the premier slip and fall attorney Atlanta.
You may also enjoy...
- Freelancer Tips: How to Find Extra Hours in the Day
- The Dynamic Laws of Prosperity
- Finding Insurance: A Beginner?s Guide for the Self-Employed
Source: http://www.theworkathomewoman.com/laws-freelancer/
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