======== You can be a sole proprietor but the legal risks remain that a corporation shield you from. And it is easier to get all your deductions , even when you have a loss, if you set up a company. Go SP and the IRS may well call you a hobby and not let you deduct your expenses.
I'd rather buy a book that looks professionally produced and is well written ... personally I don't care who published it (and many authors with trad publishing deals have their own websites too anyway) If the website says "so and so publishing" I'd expect it to have links to multiple books and authors - if it doesn't it will be very obvious that its an author having a walter mitty moment, and actually make me less likely to buy than if they'd just been honest - because i'd have to wonder why they feel the need to 'front', is it because their product is poor ? On the question of tax... is that because you aren't making a profit ? In the UK everyone who is self employed and makes a profit is expected to pay tax on it regardless of whether they are a company or a sole trader... they don't "ask you" unless someone grasses you up but the expectation is that you will, and if you don't you'll get prosecuted for tax evasion if they catch up with you.
=========== If you are a sole proprietor you get no protection. Your company can only be sued and made to pay from their assetts. You can not be made to pay if you are incorporated. If you are not incorporated then if your 'company' loses then YOU PAY. You need to talk to a lawyer as you are clearly confused about what corporations are and what they do and how they protect you when you have one.
This is partly due to the fact that British law is different to US law - in the UK a director in a company that is basically just a front would not be able to shelter himself from a defamation suit against the company However a more pertinent point is that the author is a named individual on the book cover, so a defamation suit (in the US or UK) will name that person, regardless of whether they also name the publisher - so even if you can shelter from the liability as publisher you could still be sued as the author ... and thus having a corporation fronting for you as publisher would be irrelevant in terms of stopping you being sued
Why would an entertainment attorney want to take on a broke self-publisher when there are so many massive publishing companies out there?
========== Certainly UK and USA are different in many ways. If you dont do it right you can still have trouble. But in the USA you can avoid all such problems if you do do it with a lawyer that knows how to do it right.
I'll take the one that admits to self-publication over the one that is trying to pass itself off as professionally vetted. Not that that's the intention of everyone who does it, but too often I find those books loaded with bad grammar and irredeemable writing.
I'm thinking of this kind of thing http://www.irishtimes.com/news/author-lewis-sued-for-defamation-1.872472 the Lewis actually had a trad deal with a real publisher... but he was still named personally in the suit
I would want every liability shield I could get my hands on, especially in the United States. I'm not clear on why you feel that an LLC wouldn't protect an author, when it does protect the owners of many other businesses? Edited to add: I see your other post. Certainly the opposing lawyer will try to pierce the LLC to get to the assets on the other side. that doesn't mean they'll succeed. Now, on the cover, I absolutely agree that a good professional-looking cover is mandatory, and that it will probably cost some money.
I don't think LLCs protect authors as a separate entity from their businesses. Mainly because the separate business does not exist: https://www.thebookdesigner.com/2015/06/should-writers-incorporate/
The point being that it might protect them as 'the publisher' but it doesn't protect them as 'the author' because they not the LLC are named as the author of the book ... so they have a personal liability for their words regardless of whether the work is published by an LLC or indeed by a trad publisher. the key here is not to libel anyone in the first place
So--just to offer a silly scenario--if, say, your book causes a Kindle to catch fire and burn down a house, the LLC might protect you because that resulted from an action of the publisher, but if the ideas in your book persuade a teenager to burn down a house, the LLC won't because those ideas came from you as the author? (I realize that the second example bumps us into a freedom of speech issue. Let's pretend that's not an issue.)
The point is that a suit in the latter case will name both you as an individual and your 'publisher' regardless of whether thats an LLC or a big five corporate player... so you'll need to pay to defend the suit yourself regardless ) The link Homer posted sums this up much better than I have here
I'm pretty sure every publishing contract I've ever signed has had an indemnification clause in which I take responsibility as the author for any legal issues arising from what I write. Which suggests that the publishing company believes they could be sued, as well as me, because otherwise why bother having the clause? So publishers may be liable for what they publish, but authors are definitely liable for what they write. Whether they have an LLC or not.
Which would suggest that if your only reason for forming an LLC as your publisher is to shelter from liability of this nature you are wasting your time and money. I often wonder how Stephen Coonts (and his publisher, which i think was H&S) handled this for "under siege..." Although the book was fiction and populated with fictional characters it also featured VP Dan Quayle as a character (the book being about the aftermath of a cartel inspired assassination attempt on G Bush snr) .. I would guess that they assumed that VP Quayle wouldn't sue due to the embarrassment that would cause the administration, but it seemed a risky thing to do.
I'm trying to think of what sorts of publisher-centered liability could happen for a single author self publisher with no employees and no facilities. A box of books breaking open and breaking a bookstore employee's toe? The red dye on the cover staining someone's fifty thousand dollar couch? Yeah, I'm not coming up with much. I would say that as soon as you hire an employee or open an office or even have business visitors to your home you want to start thinking about liability--LLC, insurance, both. But as long as it's purely virtual, it is hard to think of what the publisher, as opposed to the author, could be blamed for. (Though of course that kind of thinking is what lawyers are for.)
Things like defects with the books causing injury would be the liability of the printer anyway as the publisher contracts with them to provide that service, in good faith. I also work as a self employed wedding photographer and the legal advice I was given was that there was no real benefit in forming a company (under uk law), but that i should definitely have £5M public liability insurance to cover stuff like a guest trips over my tripod and sues.. Its hard to see an Author actually needing PL either unless they are giving talks etc in which case they might need it to cover stuff like someone tripping over a box of books
=================== Admitting to SP is the kiss of death. 99% of the kindle books are terrible. They are not curated. The farther away from such crap you can distance yourself the better your chance at sales.
=========== Write a cookbook and make a typo that makes someone sick when they use your recipe would be one example. People claiming a character are based on them happens in a large percentage of claims. People claiming you used their name and made them look bad happens frequently. There are so many ways they can sue and in the USA they often do. Whether you are right or wrong you spend time and money fighting the claim. If they know you have a company with no assets many wont bother. And if you do have a company you dont care if you lose as your personal assetts are safe.
========= Lawsuits name everybody they can identify. He should have a contract that says the publisher will provide his legal representation. But in many cases they trad pub says the author has to pay for their lawyers. Another reason to incorporate and self publish.
You keep presenting a lot of "information" as if it's fact, and I really don't think it is. The "if you do have a company...your personal assetts [sic] are safe" statement is a clear example of this. We've been through your credentials, or lack thereof, before. You simply don't have the authority/credibility to contradict other people's arguments without any evidence to back yourself up. So rather than just stating that "if they know you have a company with no assets many wont [sic] bother," why don't you offer some evidence to help prove your statement? Why don't you offer some evidence to prove that authors are protected by having a company (I assume you mean an LLC or other corporate structure? "Company" is a bit vague)? Especially when you contradict yourself only a post later with the acknowledgement that "lawsuits name everybody they can identify". Do you see how those ideas don't work together? If lawsuits name everybody even remotely involved, then an author will be named in a lawsuit regardless of the existence of an independent corporation. If your corporation has no assets, it won't be able to contribute funds to the defense, so you, the author, will be stuck paying legal costs and any judgement.
This is a separate area of imprecision you seem prone to, so I'll address it separately. Just about every book published in the modern world is available on the Kindle e-reader and available through Amazon. Using "kindle books" as a synonym for "self-published books", as you seem to be doing, makes no sense. I've written books I self-published, books published through small publishers, and books published through the Big Five. They're all on Kindle, and all available through Amazon.
Also if you don't maintain sufficient assets in an LLC to cover its liabilities, you are in breach of company law and the court will ignore its existence and go after you as sole director. I'd suggest the you take your own advice Joe and talk to a lawyer before giving anymore 'advice'
