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Quick breakdown of pitfalls for the business side of freelance copywriting?

Anything considered a "hustle" and not necessarily a CENTS-based Fastlane

IronyIsTacky

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Looking into getting into freelance copywriting to be able to quit my current job, and help fund future projects. Been researching local As, trying to strike a balance between an accountant and a business Iawyer I can afford to work with, and that are worth working with. Kinda sketchy so far, especially since even with all the overtime I've been catching, I'm broke. So some questions for my fellow Canucks with relevant experience:

1 - how big a risk would it be to start as myself, without an LLC or anything? From the little I've gathered, I get that it exposes me to liability issues, but the small business accountants' quotes for opening an LLC & such is about in the $2K+ range. I'd much rather start hustling up some cash from clients, getting experience along the way, and save up doing that so I can start the LLC up. I'm especially curious how things I did as a sole proprietor would be treated if someone tried to sue me for them after I set up an LLC. Would I be protected, or would my personal assets still be at risk since whatever I'm being sued for was done before the business was an LLC?

2 - a Canadian billing foreign clients in their currency - how much of a pain in the a$$ is it? I figure being an online-only business, no point in limiting who I pitch - if a Brit has a gig for me and is paying in pounds sterling, why not take that? If I get a referral for a potential American client, why deny them my services? Anything I should keep in mind with all that?

3 - apart from taxes, anything I should keep in mind that might trip me up starting out? Some kind of special fee you need to write for folks in one province or whatever, or any other kind of BS you can think of.

Appreciate your time and advice.
 
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MJ DeMarco

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1 - how big a risk would it be to start as myself, without an LLC or anything? From the little I've gathered, I get that it exposes me to liability issues, but the small business accountants' quotes for opening an LLC & such is about in the $2K+ range.

That doesn't sound correct, although I'm in the US, not CAN. Perhaps someone in Canada can confirm or disconfirm @Antifragile @JAJT @The-J ?

a Canadian billing foreign clients in their currency - how much of a pain in the a$$ is it?

Simple as pie, you just have to pay fees for whatever processor you use .. for example, PayPal will steal 3+%.
 

Antifragile

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If you are broke, don't waste time trying to set up the perfect org structure. It's a waste of your money/time. And since you don't have money...

First build a base of some income, so you are not broke. You can try to do it with copywriting (but my less than popular here opinion, it's not the best path). My advice, general labour gets you some money in the door quicker. Your side hustle can be copywriting.

D.Y.O.R.
LLC is a US term, here we use #Co Ltd. Inc. or Corp. It all means the same thing. If you are super keen to set it up as a corp from the start, as opposed to bringing it into your own income, then you can research how to register entities online.

Choose your business type​

To learn about your registration requirements and start the registration process, choose your planned business type:

Then remember that CRA requires you to register for GST/HST if you plan on making above $30k p.a. in revenue.


As far as being sued goes... dude, if you are doing copywriting, what am I going to sue you for? You are worrying about the wrong things at this early stage of your business success. Don't screw anyone and you'll be fine. Go make some money first.
 

IronyIsTacky

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Would've swore we were taught about LLCs in high school accounting, but you're right - straight-up doesn't exist here. Wtf. Appreciate the heads-up
 
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JAJT

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That doesn't sound correct, although I'm in the US, not CAN. Perhaps someone in Canada can confirm or disconfirm @Antifragile @JAJT @The-J ?

Do not set up an American LLC or Corporation if you are in Canada.

Canada taxation treats every dollar of foreign corporate sourced income at the highest tax bracket (40%? Something like that). Ask me how I know...

Canada does not have LLCs for all intents and purposes. We have sole proprietorship and Provincial/Federal Corporations. You can set up a sole prop on your own through the gov websites for like $200, if that. If you get incorporated - you'll want to go through a lawyer to set it up properly and yes, that will be roughly $1-2k+. My Canadian corporation was about $2k if I recall, going through a lawyer to set it up. Although they also helped me dissolve and fix my stupid American corporation situation at the same time so that's probably included in that fee I paid.

Regarding liability - if you're small and low-risk, don't even worry about it. Just setup as sole-prop and run with it. If you are just selling widgets online or whatever, nobody is going to sue you if their package is damaged or whatever. You want limited protection if you have a physical store where someone can slip and fall and crack their head open, or if you are engaging in potentially litigious business dealings (large deals, real estate, patents, licensing, dangerous goods, etc). Besides, any REAL protection you gain is going to be eroded by the fact that everyone you do business with in any serious capacity is going to ask you to personally guarantee it anyway - so not like you'll be able to get a loan from a bank and laugh behind a corp if things don't work out; you'll still be on the hook.

2 - a Canadian billing foreign clients in their currency - how much of a pain in the a$$ is it? I figure being an online-only business, no point in limiting who I pitch - if a Brit has a gig for me and is paying in pounds sterling, why not take that? If I get a referral for a potential American client, why deny them my services? Anything I should keep in mind with all that?

Shopify (Canada's favorite business) can be setup to take either CDN or USD easily. Paypal will accept anything. It's really not a big deal. You'll be dealing in USD for almost all international purchases anyway, even China.
 

JAJT

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I forgot to mention that one big perk (in fact, the main one over and above liability, IMHO) of being a Corp is legally and properly separating your business finances from personal finances.

With a sole prop, you can treat it as different operationally, but legally they are they same.

With a corp, you become a new tax identity. Your personal finances might be "X" but your corp finances can be "Y" and nothing one does will impact the other. All things considered, this is likely a year 2+ issue to work on and keep an eye on with your accountant. They can advise when it makes sense to make the leap.
 

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That doesn't sound correct, although I'm in the US, not CAN. Perhaps someone in Canada can confirm or disconfirm @Antifragile @JAJT @The-J ?



Simple as pie, you just have to pay fees for whatever processor you use .. for example, PayPal will steal 3+%.

OP: I am not a lawyer. If you're really concerned, go speak to one.

I opened my LLC in the US by myself for whatever government fees I had to pay, don't remember what it was but it was under $300.

In Canada, I opened my corp for $474.00 CAD plus tax using some online legal service (Incorp Pro), recommended to me by a CPA. No problems here with them: they even reminded me of important dates for corp filing and such. (Pay your tax by March 31, file tax AND corp status by June 30, assuming Dec 31 fiscal YE)

I registered for HST by myself through CRA when I hit the threshold, but the threshold is so low (30k a year) that you should plan to register for it.

As @Antifragile said, don't worry about org structure right now lol. Just focus on getting clients. A lawyer can always unfuck it later. Yes you'll be paying, but right now every dollar you spend should be about getting clients and fulfilling on their needs.

If corp structure stuff seems too complicated for you right now, then skip it and just focus on getting good at copywriting and getting good at selling copywriting services. You can always declare that your business opportunities began before you incorporated.
 
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