Industry Overview Presentation
ASSESSMENT — INDUSTRY OVERVIEW PRESENTATIONS
As part of this course, we need to look at some legal and administrative issues that will affect you when you work as a Makeup Artist.
The following are some other common legal and administrative issues that you will need to consider:
As a freelance, or contracted makeup artist there are some points to consider that are vital when running your business. We will go through each point however it is encouraged you seek an accountants advice to help you make legal decisions. Further information can be obtained from the Australian Taxation Office website- www.ato.gov.au
ABN- AUSTRALIAN BUSINESS NUMBER
The ABN is a unique 11 digit identifying number that businesses use when dealing with other
businesses. For example, you generally need to put your ABN on your invoices, or other documents relating to sales that you make. If you dont, other businesses may withhold 46.5% from any payment to you.
You also need an ABN in certain dealings with the Australian Taxation Office (ATO) and other areas of government.
Registering for an ABN is not compulsory, but you will need one to register for the GST. Your ABN allows you to:
• facilitate a single Business Activity Statement
• confirm your business identity to others when ordering and invoicing
• avoid PAYG tax on payments you receive
• claim GST credits
• claim energy grants credits
• obtain an Australian domain name.
• lets you claim fuel tax credits you qualify for
• allows businesses to easily confirm your details for ordering and invoicing
If you are a sole trader, you must have a tax file number before you can register for an ABN.
You will not receive a business trading name as part of your ABN registration.
For more information and to apply for an ABN go to www.ato.gov.au
GST
Goods and services tax (GST) is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia.
If your business has a GST turnover of $75,000 or more ($150,000 or more for non-profit organisations), or provide taxi travel, you must:
• register for GST
• work out whether your sales are taxable (that is, subject to GST, GST-free or input taxed)
• include GST in the price of your taxable sales
• issue tax invoices for your taxable sales
• obtain tax invoices for your business purchases that have GST included in the price
• account for GST on either a cash or non-cash basis
• report sales and purchases by lodging activity statements (even if the amount to be reported is zero), work out whether they have any adjustments and pay GST to the Australian Taxation Office.
Generally, businesses and other organisations registered for GST will:
• include GST in the price of sales to their customers, and
• claim credits for the GST included in the price of their business purchases.
Businesses dont bear the cost of GST they simply collect it. As a GST registered business, youll need to put aside the GST you have collected so it can be paid when due.
GST-registered organisations can also claim GST credits for GST included in the price of most business purchases.
If you are not registered or required to be registered for GST, you dont include GST in the price of your sales and you cant claim credits for any GST included in the price of your purchases, even if they are for your business. But if you can claim the business expense as an income tax deduction, you can claim the entire expense, including GST, on your income tax return. You must keep all the receipt as proof for at least seven years.
REGISTERING A BUSINESS NAME
A business name is simply a name or title under which a person, or other legal entity, trades. It is sometimes referred to as your trading name.
If the business structure you have chosen is as a sole trader, a partnership or a trust, and not as a company, then you are required to register your business name in the state or territory in which you will operate. But you dont need to register a business name if you plan to conduct your business under your, or your partners, first name and surname.
Registration occurs at the state and territory level of government and is a separate process to registering an Australian Business Number (ABN). If you are planning to set up your business in more than one state, you need to register your business name separately in each state. There are costs involved with registering a business name and this will vary from state to state. Go to www.business.gov.au for information on this.
Registration of a business name does not in itself give you any proprietary rights - only a trade mark can give you that kind of protection.
TRADE MARK
A registered trade mark gives you the exclusive right in Australia to use it as a brand and to legally stop others from using it. Unlike a business name, a registered trade mark can provide legal protection for your brand and enable you to stop others from trading with it.
Once registered, the trade mark is protected in all Australian states and territories for an initial period of ten years. If international registration is required, the trade mark must be registered in each country in which you want protection.
Be aware that registration of a business name, company name or domain name does not in itself give you any proprietary rights - only a trade mark can give you that kind of protection.
If you are unsure of what or how to register, seek the advice of your accountant, lawyer or trade mark attorney.
INSURANCE
Taking out insurance as a freelance makeup artist is a good idea to help protect you against any lawful
incidents that could arise from your goods or services supplied.
The following is a brief overview of what can be covered in a policy:
• Medical Liability- in the case that a client reacts/suffers medical problems due to the service and decides to take legal action
• Public Liability and Goods Sold or Supplied
• Confidentiality- use of documents containing personal information
• Loss of Documents
Each insurance quote will vary and it is up to your insurance provider to provide you with policy cover they deem appropriate. You may wish to have your kit and any other tools covered in the policy.
MODEL RELEASE
Using someones photo for commercial use (eg- advertising on your website) without obtaining their consent is an invasion of privacy. Without documenting proper consent, you could be subject to lawsuits and payment of damages. To obtain permission to use the image or video, film, etc for advertising, trade or other lawful purposes you will need a signed, Talent/Model Release Form.
This release provides the legal basis to establish necessary consent, protecting the rights of all parties and minimizing the chance of future lawsuits, claims and damages. This Talent/Model Release outlines a clear understanding of the terms and agreements for all involved. If youre working with a minor you will need to obtain written consent to use the image or video from a legal parent or guardian.
Below is an example of a model release form only. Its advised to seek legal advice from a solicitor or lawyer when designing your own form.
RELEASE FORM FOR MEDIA RECORDING
I, the undersigned, do hereby consent and agree that , its employees, or
agents have the right to take photographs, videotape, or digital recordings of me beginning on
and ending on
and to use these in any and all media, now or hereafter
known, a .d exclusively for the purpose of . I further
consent thk my name and identity may be revealed therein or by descriptive text or commentary.
I do hereby release to , its agents, and employees all
rights to exhibit this work in print and electronic form publicly or privately and to market and sell copies. I waive any rights, claims, or interest I may have to control the use of my identity or likeness in whatever media used.
I understand that there will be no financial or other remuneration for recording me, either for initial or subsequent transmission or playback.
I also understand that is not responsible for any expense or liability incurred as a result of my participation in this recording, including medical expenses due to any sickness or injury incurred as a result.
I represent that I am at least 18 years of age, have read and understand the foregoing statement, and am competent to execute this agreement.
Signature: Pt-QV c-cxolt Cc ove v ee
Name: - t•1 430ic.xocAt INet
Date: — dot 4c V,
Address: teat 7-t
Phone:
Witness for the undersigned:
Signature:
Date:
PREPARE A SAMPLE INVOICE
As a freelance Makeup Artist, you will need to invoice your clients when you provide services.
Prior to your job it is a good idea to send your client a quote for what you will be invoicing them for. That way you can establish clear performance outcomes for the job and agree on fees, schedules and expenses. You might need to seek specialist advice in the development of your quote where appropriate. You can obtain more information on invoicing from www.ato.gov.au. Ensure you have included your payment terms and conditions on your quote so that your client is aware of them before the job commences. Also include these same terms and conditions on your invoice. You may find that you need to negotiate variations to the quote. Once agreed upon, always keep a copy of the agreement of the quote on hand in case you need to refer to it.
As part of your assessment for this topic, you must prepare and hand in a professional looking, sample invoice. Some Makeup Artists use their letter head for their invoices — this is a good idea, as it lets your client see at a glance who the invoice is from.
The sample invoice that you prepare must include the following information:
YOUR PORTFOLIO
A Makeup Artists portfolio is a folder/portfolio containing a selection of photographs of their best work, usually a minimum of 6 images. Your portfolio can also include tear outs from magazines or catalogues that your work has been featured in.
Every folio is different. When you are compiling your folio, take some time to think about how you want to present your folio. Make sure the first image is very strong and one you are most proud of, as this is the persons first impression of your work. The last image should also be one of your strongest images as this is the one they see last and may remember most
PREPARE YOUR RESUME
It is very important to have a well presented resume. Its imperative to take a lot of care with your resume because you may be asked to produce it before you are given a job. Double check it (and check it again) for typos and spelling mistakes.
You must prepare and hand in a copy of your resume. Try to make it original and something that will impress those who read it. Remember that an employer may see hundreds of resumes. Those that stand out will usually be the ones that are remembered.
CHOOSE YOUR BUSINESS STRUCTURE c./ Vogt vev thy
Most freelance Makeup Artists will choose to trade as a sole trader or a company. After reading the descriptions of business structures below, specify the type of business structure that you have chosen for your business and why. You must hand in your answer, together with the other written work required for this section.
Usually, the type of business structure reflects the owners needs and requirements. The business owner should address this issue carefully, as the choice of business structure can have many different implications including:
personal responsibility for debts and other liabilities (is the owner responsible, or does liability lie with a company?)
taxation (taxation rates differ depending on whether the entity being taxed is a sole trader, company, partnership etc)
the ability to attract capital (financiers may prefer to invest in a company in which they can buy shares)
cost of establishment (there will be ASIC (Australian Securities and Investments Commission, which is responsible for regulating companies in Australia) registration fees, accountants, lawyers and other fees involved in the establishment most forms of business structure, other than a sole trader)
compliance costs (eg., ASIC fees)
the ability of the owners to dissolve the business and recover their share (compare company shares and partnerships)
the ability to do business Australia wide (only one registration required for a company, but
many registrations could be required for other forms of business structure)
the governance structure of the business (more flexibility with sole traders than with other
forms)
subcontracting, and
distinguishing the business products and services from competitor
COMMON TYPES OF BUSINESS STRUCTURE
Sole trader— a single person operating a business personally under his or her own name or under a
registered business name.
Advantages
- simple and inexpensive to establish
- full control over the business
- personally entitled to profits and capital
- easy to wind up/close down
Disadvantages
- being the main person responsible for operating the business often means that you must be there all
of the time
- personally responsible for debts and other liabilities (if the business cant pay, then you have to!)
- possible difficulties with succession — business may be difficult to sell if the proprietor dies.
Partnership — two or more persons in business together under their own names or under a
registered business name.
Advantages
- like a sole trader, partnerships are inexpensive to set up
- there can be tax advantages, particularly where the partners are within the same family such as a husband and wife
- access to more capital
- pooling of knowledge, experience and skills
- ability to take time off
- easy to dissolve and recover share.
Disadvantages
- disputes over profit sharing, administration and business development may arise
- personality clashes may arise
- each partner is personal responsibility for business debts and liabilities incurred by the other
partners
- one partner may dissolve the partnership and effectively ruin the business.
Company — a registered legal entity with the right to do business in its own right: the proprietors are
the shareholders and usually its directors and employees.
Advantages
- shareholders (owners) have no responsibility for the debts of the company unless they signed
personal guarantees
- can be owned and operated by one shareholder and Director
- Directors, managers and employees have no personal responsibility for debts unless they caused the debts recklessly, negligently or fraudulently
- easier to attract capital because of limited liability
- operators may use titles like Managing Director or Chairman/Chairwoman. This may give the appearance of a more professional operation than a sole trader, operating under his or her own name.
Disadvantages
- expensive to establish
- higher compliance costs
- shareholders may have difficulties in recovering their investment because of limitations on who can buy shares.
Whatever the chosen business structure, your business will need to comply with the relevant legal and statutory requirements that relate to it.
Regulations may include local, state, national and international legislation and regulations affecting business operations such as: business registration, planning and other permissions; licence to practice; fire, occupational health and safety and environmental legislation; industrial, taxation, copyright, patent trademark and design regulations; codes of practice standards and anti-competition/monopoly, fair trading and consumer legislation.
CONTRACTS C. V e CO Ir (Df ,
If you need to rely on other companies/businesseg etc for the supply of goods or services, you will need to enter contracts with them. It is important to ensure that all contracts for the supply or provision of goods or services are in writing. If you dont understand something in a contract, dont sign it. Ask for clarification, or take it away so that you can discuss it with someone else who can explain it to you.
When negotiating for the supply or provision of goods or services, make sure that you cover every possible aspect of the supply (and also what will happen if something goes wrong). Think through every step of the supply process and consider if you need to document what is supposed to happen in writing. Ensure that as much as possible is in writing. Include dates on everything and keep written (and dated) records of every important conversation with suppliers that you have. To ensure complete agreement, ask your suppliers to confirm details in writing.
Things to include in each contract include:
- Full and proper legal names of all parties to the contract
- Date on which the contract is made
- Costs
- Each parties rights and responsibilities
- Limits to what you can do under the contract
- Exclusive rights issues
- Intellectual property ownership rights
- Duration of contract
- All parties must sign. Ensure that the person who signs has legal capacity (ie. they are over
18) to sign.
- The dates on which performance is due
- What happens if something goes wrong
Of course, there will be other issues to consider and each set of issues will differ, depending on the
nature of the contract.
Preparation for next class: Bring your colouring in pencils, eraser, sharpener, fine black ink pen, makeup brushes and consumables.