At what point does my business become a business?

Question

I make jewelry and have recently recieved an offer by a shop owner to vendor at her store (she saw commented on something I was wearing that I made and we went from there)- she displays my work, and gets 20% of everything I make. I've made jewelry for a long time, but I've never tried to sell it- what should I know? What do I have to do (legally and otherwise)? I'm in Texas, and under 18 (barely) if that makes a difference.

Answer 1

Given your circumstances I recommend against forming an LLC.  All it will do is cost you money to set up and subject you to Texas Margin Tax.  There is also the very real possibility that operating as an LLC will not eliminate your financial liability.

Stick with a sole proprietorship.  It is the easiest and least expensive legal form to set up.

Basically, you will be consigning merchandise to her and you will retain ownership until it is sold.  You should talk to a lawyer about creating a contract form that will protect you and be fair to her.  

But, before you do check out pricing.  As far as pricing is concerned ask her what she thinks your work should sell for.  If that provides you with enough to cover your design ingenuity, labor and materials go for it.

Hope this helps

Jerry-the-bookkeeper

Answer 2

iceman33 provided you with an outstanding answer.

The only other thing I would suggest additionally is a written agreement between yourself and the store owner, in order to protect your commissions, and later on to protect your creations, should you decide to patent/trademark these wonderful works. (which you WILL wish to do at some point in your Creative Career)

Keep up that wonderful skill and art.

It will lead to future financial and creative benefit, as well as Entrepreneurial experience.

Answer 3

I'm in Virginia, Texas may be a little different.  Starting a business is very easy.  Go to your city/county office and get a business license.  However, you may want to get an LLC (general partnership) first, which will protect your personal assets/money.  Do that first.  Next, get a tax id number.  Finally, take all your documentation and go to your local city/county office and get your business license.  Total cost no more than $150.  Hope this helps some.