Should You Incorporate Yourself as an Artist?
For artists, there are many appealing aspects to being self-employed. Many creative people have made a career out of becoming contractors often being hired on for different projects, sometimes several at the same time. Contracting yourself out is often the ideal way for artist incorporation, and while there may be attractive positives, there are considerations you have to make about how you do it.
The largest of these considerations is that your personal assets, which include anything you own, may be at risk if you find yourself being sued for a contract you signed personally.
The benefits of artist incorporation
Many artists find value in incorporating a corporation and employing themselves, as it can help protect their personal assets. Under Ontario law, a corporation is a separate entity under the law, meaning that it is now the one being contracted for the work. The corporation then introduces the star employee, you, to fulfill the contract. It may seem like a hassle and additional paperwork, but there are plenty of benefits that it can bring you.
Liability
Imagine you are being sued for not fulfilling your obligations under a contract, but in this instance, your incorporation is the one in the contract. Now, your personal liability as an artist is limited to whatever assets are held by your company. Of course, this is not a “free pass” to break a contract, but it can save you from losing the shirt off of your back because of a bad breakup between contracting parties.
Ensuring that you create and sign all of your contracts in a corporate capacity will ensure that your personal assets will be protected. This means that, for example, your house will not be brought into a settlement for your business.
After all, a fundamental reason that corporations exist is to protect their shareholders[1], even if there is only one shareholder, and it happens to be you.
Taxes
There are numerous tax benefits available under incorporation. We can work alongside your accountant to make sure that you are being taken care of.
If you don’t yet have an accountant, we can help you find the best person for the job, specific to your unique needs.
Things to keep in mind
Self-employment comes with its own unique ups and downs. It can be overwhelming at first, but incorporating can protect your art, personal assets and yourself when facing court matters – like lawsuits. Not only is the protection a key reason to switch over, but also deferring income tax rates can help you see more of a financial impact from the work you love to do.
Additionally, the added professionalism of an incorporated business may stand out to potential productions looking to hire. If you do incorporate yourself, it can help you stand head and shoulders above other competing contractors or possible freelancers. By taking the time to seek legal counsel and investing in yourself, your implicitly show that you are serious about your craft and business.
Our Toronto entertainment Lawyers will make the progress of artist incorporation happen for you. Working alongside you, we can sit down and illustrate the benefits of incorporating as an artist, and the benefits that you will see as a result. We have an experienced team of lawyers in Toronto that can lay the groundwork for your incorporation.
Contact us today to make sure that you are protected when seeking success and moving your new corporation forward.