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Whether it's the grind of your 9-to-5 or the allure of making it on your own, you may be considering taking your talents on the road as a freelancer. The good news is that it's probably easier than ever to find a freelancing gig; the bad news is that it can still be hard to make a living freelancing. Remember, you'll be in charge of everything, from client acquisition and retention to production to contracts.
Here are some legal issues to consider when pondering the leap from employee to freelancer.
Prep Your Permits
Even though you may be working on your own and out of your home, some businesses are still required to get the proper permits and licenses under city, county, or state law. Required permits can vary depending on what kind of work you do and local regulations. And you should also make sure your personal and professional credentials are up to date.
Protect Your IP
As an employee, your products, ideas, or creations normally belong to your boss. But as a freelancer you own your intellectual property and are therefore in charge of protecting it. Patents, trademarks, licensing agreements, and non-disclosure agreements are up to you now. So make sure you're up to speed on your IP issues, and spell out the terms of engagement with your clients before you start work.
Process the Paperwork
Make sure to get all of your business agreements in writing. If a client provides you with a contract, know it inside and out before signing (or have a good lawyer look it over for you). If you're planning on having your own client contracts, carefully prepare one of your own (or have a good lawyer draft one for you). A written contract is the best way to ensure a client lives up to their end of the bargain, and protects you if they don't.
Pay the Piper (Tax Man)
It was nice when your boss took care of all the HR issues and all you had to do was cash the checks. But now it's up to you to stay on top of any tax issues. Freelancers are responsible for taking care of their own self-employment taxes, which may include paying estimated taxes. On the other hand, there could be additional deductions available to freelancers.
If you're considering a move to freelancing, or have already made up your mind to start, you may want to talk to an experienced commercial attorney who can alert you to any possible legal issues with your new gig.