Being self-employed isn’t necessarily an easy process to navigate.
On one hand, being a sole proprietor and/or a freelancer, or even operating your own independent LLC, keeps things simple and straightforward.
But on the other side of the coin, being a one-person operation also comes with its own set of challenges.
Namely, you’ve got to figure out everything on your own.
You don’t have a team of people helping you to take care of things like business legalities, insurance, tax paperwork, etc.
You’re literally responsible for everything.
So today, in this blog post, you’re going to learn 5 must-know legal tips that you should always keep in mind when you’re self-employed.
Hopefully, this will help you to cover valuable ground, and prevent you from overlooking something important.
Let’s dive into it.
1. You Need A Business License
Even for a simple business, getting a business license is crucial and important.
You definitely don’t want to operate your business illegally within your municipality.
Sure, this may not seem like it’s a big deal. And for some businesses, it might not even seem like it’s an important detail.
However, you always want to cross your t’s and dot your i’s when building your own business.
And getting a legal business license is really the first and most basic step in that process.
2. You Need To Keep Your Taxes Straight
As a self-employed business person, you’re going to need to keep the business taxes as separate as possible from your personal taxes.
This is especially true if you form an LLC.
With all that being said, it may pay to bring a CPA onto your payroll to help you navigate some of the complex tax issues that may crop up.
Just because you’re running a one-person operation doesn’t mean the taxes aren’t going to be a little bit complicated.
Plus, there’s nothing as troublesome as getting to the end of the year and realizing that you didn’t set aside enough money to pay your tax bill.
3. You May Need Insurance
It’s important to stay on top of your liability as a business owner.
Part of this means having the appropriate insurance.
Listen—nowadays, it’s really important that you protect yourself from potential disaster.
You need to make sure you have the proper business liability insurance in place, as well as many other types of insurance—depending on your industry.
For example—Gigly says this about being self-employed and getting self-employed Workers’ Comp insurance:
“Many gig workers assume that they also sacrificed workmans’ comp policies when they gave up that “employee” title. However, that’s not true — self-employed workers can opt-in to similar policies to protect themselves if they get injured at work.”
So make sure to look into this and do your homework.
Overlooking the insurance part can cost you a fortune.
4. Consider Setting Up An LLC
If you haven’t already set up a limited liability company for your business, to make it its own separate entity, you might want to look into that.
It comes with a few different tax benefits, and it also helps you to keep business liability separate from personal liability.
The downsides are that it costs a little bit to set up, and that it’s also slightly more complicated in the sense that you need to pay yourself from the business holdings.
But that being said, the benefits may definitely outweigh the downsides—and it’s something you should look at.
5. Only Engage In Ethical Business Practices
If in doubt about whether something could land you in hot water in a legal sense, always err on the side of caution.
It’s never a good idea to get wrapped up in business practices that are either unethical or that could make people angry about the things you do.
When you treat people well as a business owner, and when you make sure to conduct your business in a manner that doesn’t hurt anyone, you really set yourself up for a better experience.
If you make enough people unhappy enough with you, they’ll probably find a way to make it blowback in your face—and this is never a good thing.
There you have it.
5 tips that you should definitely keep in mind as you pursue the business of becoming a self-employed success.
Regardless of the industry you’re focused on, these tips will definitely help you.
So keep them at the forefront of your mind, and don’t neglect them.