I’ve been tempted to try freelancing but something doesn’t seem right about building a website for a business or individual and then asking for a check to be made out in my name and depositing it to my personal checking account.
I feel like at the very least i should open a new bank account for this. And possibly even incorporate myself as an LLC or something. Not that I expect to get sued or do any funny business with tax reporting.
It might take a little work upfront but I’d like to avoid any headaches down the road.
There seems to be a lot of freelance material on how to get a client and how to manage a project and expectations but that’s not exactly what I’m looking for here.
You are considering the right things, but this might be the wrong platform to ask this question. You could find some experienced freelancers here, but you might need a platform more specialized to freelancers.
You either need someone that is an experienced freelancer or someone have experience managing a freelancer’s business. Have you tried soliciting advice on some well-known freelance communities?
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I think you’re on the right track.
I think the separate account is a great idea. That way you should have accurate records of all the deposits and withdrawals and the money isn’t commingled with your personal funds until you transfer it. It should make it a lot easier for tax purposes.
The LLC is a good idea from a risk management perspective. That way your work would have some legal separation from your personal assets. The chances of being sued are probably slim, but costs of defense can be so high that any barrier of protection should be a net positive. I may be a little too risk averse on these though.
I would recommend googling a freelancing contract and using that on any work you do. Specifically, I would look for a limitation of liability clause that at a minimum limits your liability in a suit to the value of the contract, or if you are signing someone else’s contract, including a limitation of liability clause in the contract.
You could also consider insurance. The policies are heavily favored towards the insurance company, so you’ll need to check them to make sure they are worth it, but as long as you are covered, you have another avenue to mitigate cost since the insurance company will send in their lawyers on your behalf if you are sued.
Hopefully the items above are somewhat helpful. Of all of them I would encourage the contract since it is basically free and has legal standing.
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