Guide to Understanding Business Structures for Photographers (Sole Proprietor, LLC, S-Corp, Corporation)
As a photographer, turning your passion into a business is an exciting milestone. But as you grow, it’s important to make sure your business is set up legally and structured in a way that protects your assets and helps you thrive.
In this guide, we’ll explore different business structures—Sole Proprietor, LLC, S-Corp, and Corporation—so you can make an informed decision on how to register your photography business.
The Importance of Legally Registering Your Business
Registering your photography business as a legal entity is an essential step in establishing yourself as a professional.
It not only legitimizes your business in the eyes of your clients, but also provides legal protections, tax benefits, and opportunities for growth (with the specifics depending on the type of business!).
When you’re operating without a formal business structure, you are personally liable for everything your business does—meaning your personal assets (like your home and savings) are at risk if something goes wrong. That’s why registering your business is crucial; it separates your personal and business finances, helping protect you in the long run.
4 Key Benefits of Registering as a Business Entity
There are many advantages to registering your photography business, including things like…
Legal Protection
Formal business entities like LLCs and corporations provide liability protection.
This means that if your business faces legal trouble, your personal assets are generally protected.
Keep in mind, your business structure is just one part of your legal protection and you will want to make sure to talk with a lawyer about your specific needs and get things like strong contracts in place too.
Tax Benefits
Different business structures offer tax advantages, allowing you to maximize deductions and potentially save money at tax time.
As we will learn, this is particularly true of the S-Corp tax filing status (which has saved me tens of thousands of dollars, actually!)
Credibility
Clients and vendors are more likely to take your business seriously when it’s legally registered, which can lead to more opportunities and partnerships.
While other factors will influence those decisions even like clear evidence of social proof, it is still useful in helping separate yourself from other photographer’s who essentially present themselves as hobbyists.
Financial Organization
When your business is registered, you can more easily open separate business bank accounts and apply for business loans, making it easier to manage your finances and track expenses.
Now that we’ve covered the benefits, let’s take a closer look at the different business structures available to photographers.
Breaking Down Business Structures for Photographers
Sole Proprietor
A Sole Proprietorship is the simplest and most common business structure for photographers, especially when they’re first starting out.
In a sole proprietorship, there’s no legal separation between you and your business – this is really important to make a note of!
You report your business income and expenses on your personal tax return, and you’re personally responsible for any debts or liabilities.
When to Choose Sole Proprietorship:
- You’re just starting out and your business is relatively small.
- You’re not ready to deal with the formalities and costs of forming an LLC or corporation.
- You want to keep your tax filing as simple as possible.
Example: If you’re a part-time wedding photographer who’s just started booking clients and you’re working alone, a sole proprietorship might be the easiest way to get started. However, as your business grows, you’ll want to consider upgrading to an LLC for more protection.
Special Note – even if you don’t formally file as a Sole Proprietor, this is the “default” structure even unregistered businesses get classified as. So – even if you don’t register, you are operating like this unless you file as a different business structure (which we’ll talk about more through the rest of this post!).
LLC (Limited Liability Company)
An LLC (Limited Liability Company) is one of the most popular business structures for photographers.
It combines the simplicity of a sole proprietorship with the added protection of a corporation.
When you form an LLC, your personal assets are protected from the debts and liabilities of your business. This means if something goes wrong, creditors can’t come after your personal belongings!
To give you a tangible illustration of this – let’s say you’ve been personally putting money away in a retirement account. This is your personal asset. In the event you were sued for something that happened in your business, with an LLC that asset would be protected.
When to Choose LLC:
- You want to protect your personal assets from potential business liabilities.
- Your business is growing, and you’re booking more clients or hiring help.
- You’re looking for more flexibility with how you manage and run your business.
Example: If you’re a full-time portrait photographer booking several clients per month, or you’re expanding your services to include studio rentals, an LLC is a smart choice for protecting your personal assets while keeping your business operations simple.
Personal Experience with LLC’s
I made the decision to register my photography business as an LLC pretty quickly after I realized this is something I wanted to do more as a career and I began bringing on clients.
Aside from all the things I’ve touched on here so far, one of the most compelling reason for getting registered like this was that it allowed me to show myself that I was serious about being in business.
Filing the paperwork gave me that extra push of motivation!
S-Corp (S Corporation)
An S-Corp is a tax classification available to LLCs or corporations that allows business owners to save money on self-employment taxes.
While an S-Corp provides the same liability protection as an LLC, it has some additional tax benefits.
As an owner of an S-Corp, you can split your income into a reasonable salary (which is subject to payroll taxes) and distributions (which aren’t subject to self-employment taxes).
However, S-Corps have more strict operational and filing requirements compared to an LLC. In addition, you will need to use a payroll company to “pay yourself” in this way.
When to Choose S-Corp:
- Your business is generating substantial income, and you’re looking for tax savings.
- You’re ready to handle more complex bookkeeping and legal requirements.
- You want to take a salary from your business and reduce self-employment taxes.
Example: If you’re a successful wedding photographer with consistent high earnings, switching to an S-Corp can help you save money by allowing you to take distributions and reduce self-employment taxes. However, this structure requires more financial management and legal compliance.
Want help setting up an S-Corp for your photography business? Collective handles everything you don’t want to deal with when you’re self-employed: LLC and S Corp formation, payroll, monthly bookkeeping, quarterly tax estimates, annual tax filing and more. Use discount code THRIVE at checkout for a special offer.
Personal Experience with S-Corp
As my photography business started to make more money, I decided to consult with an accountant in my area who helped me work through the steps of filing as an S-Corp. In the first year I did this, I saved over $10,000 in taxes (and proceeded to invest that money in retirement accounts and a trip to Iceland with my wife!).
As a general rule of thumb, a good time to transition to S-Corp status will be when your business is making at least $80,000 a year. The reason for this is because with this status means you will also need to spend a little money setting up paying yourself using a payroll provider. Your specific situation may vary, of course!
Corporation (C-Corp)
A Corporation (also known as a C-Corp) is a more formal business structure that offers the most protection but comes with the most complexity.
A corporation is a separate legal entity from its owners, meaning it can enter contracts, file lawsuits, and own assets in its own name. Corporations are typically used by larger businesses or those looking to raise capital by issuing shares.
Corporations are subject to double taxation, meaning the company pays taxes on its profits, and shareholders also pay taxes on dividends. For this reason, most small businesses, including photographers, do not choose this structure.
When to Choose Corporation:
- You plan to grow your business significantly, hire employees, and raise capital.
- You want to take your business public or issue stock to investors.
- You’re ready to deal with the complex tax and legal requirements of a corporation.
Example: If you own a large photography studio with multiple employees and you’re planning to expand into other locations, a corporation might be a good fit.
Keep in mind, most photographers don’t need this level of formality and stick with LLCs or S-Corps.
Quick Comparison Chart of Different Business Structures
| Business Structure | Liability Protection | Taxation | Complexity |
|---|---|---|---|
| Sole Proprietorship | No personal protection | Personal tax return | Easiest |
| LLC | Personal assets protected | Pass-through taxation | Moderate |
| S-Corp | Personal assets protected | Pass-through with payroll tax savings | Moderate (with additional tax filings) |
| Corporation | Strongest protection | Double taxation | Most complex |
When deciding on a business structure, it’s important to consider the size of your business, your financial goals, and how much protection you need.
Choosing the Right Business Structure
If you’re just getting started, a sole proprietorship or LLC might be the best fit.
As your business grows, an S-Corp could help you save money on taxes, while a corporation is generally suited for larger businesses with more complex needs.
Our Personal Experiences
When we got started with our photography businesses, we pretty quickly ended up registering as LLC’s for the benefits of legal protection it would provide us. The cost to set up an LLC isn’t to bad (if you file yourself, around $100 bucks but it varies by state).
The decision to register is a personal one, but our main driving force in making this decision was starting to book clients and making money from them, and acknowledging that our game plan was to be in business long term – so these things combined made it worth getting registered.
As we made more money over the years, we worked with an accounting firm to switch our tax filing status to S-Corps – which has allowed us to save 10’s of thousands of dollars over the years in taxes.
Learn More with Shoot and Thrive’s Business Courses
The business structure you choose will have long-lasting impacts on your taxes, legal protection, and how you operate. That’s why it’s so important to make an informed decision.
If you’re unsure where to start or want a deeper dive into these business concepts (and more), The Photography Business Academy covers everything you need to know about setting up your photography business for success (and then some). From business structures to taxes and scaling strategies, we’ll help you navigate these decisions confidently.
Honesty is a cornerstone of Shoot and Thrive, so we want you to know that some links in this post are affiliate links. This means we may earn a commission if you make a purchase—at no additional cost to you. We only recommend products and services we trust, have used ourselves, or have thoroughly researched based on industry feedback. Our goal is to provide solutions that genuinely help, whether they come from our direct experience or the collective knowledge of the photography community.
As photography business educators, we believe it's important for educators in this industry to be active photographers themselves. The images used throughout this website were taken through our photo studios - Hand and Arrow Photography and Marshall Scott Photography, except for stock images or if otherwise noted.
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