In Short
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Choose the Right Location: Consider factors like cost, local demographics, and accessibility when selecting your gallery’s location.
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Establish a Strong Online Presence: Create a website with necessary legal documents and obtain artist consent for showcasing their works online.
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Understand Copyright and Royalties: Be aware of artists’ rights and the resale royalty scheme for artworks sold over $1,000.
Tips for Businesses
When opening an art gallery, it’s crucial to select a location that aligns with your target audience and budget. Ensure your online platforms are legally compliant and respect artists’ intellectual property rights. Additionally, stay informed about the resale royalty scheme to ensure fair compensation for artists.
Opening an art gallery can be a great way to channel your love for artistic work. It allows you to connect with like-minded people and share your appreciation for artistic work with the general population. However, beyond artistic appreciation, there are crucial legal and commercial aspects to consider. This article outlines four key considerations for aspiring gallery owners in Australia.
1. Business Structure and Compliance
Choosing the appropriate legal structure for your gallery is a critical first step. These options include:
- sole trader;
- partnership;
- company (Pty Ltd); or
- trust.
Each structure has different legal implications regarding liability, taxation, and regulatory compliance. Consult with one of our corporate lawyers to determine the most suitable structure for your circumstances.
2. Location
Choose the location of your art gallery carefully. Various factors should be considered when selecting the location, including:
- cost;
- local demographics;
- rental or purchase costs;
- available facilities and amenities;
- available facilities;
- surrounding establishments; and
- transport options.
It is a good idea to begin your art gallery by hiring an exhibition room. There are various online platforms to help you to find available spaces, including Creative Spaces and Art Almanac. Once you have an established customer base, you can consider buying premises or entering a long-term commercial lease.
Opening your art gallery near bars and restaurants that attract your target market is a good idea as it can draw customers to your business. Public transport and parking options are also key factors that can help secure a large customer base. Organising events can be a great way to draw an audience to your art gallery. For example, you could hold a fundraiser or an art masterclass.
Continue reading this article below the form3. Developing a Strong Online Presence
Having an online presence is essential to the establishment and growth of your art gallery. This can be done through a website and social media. An online presence can help you reach potential customers and promote upcoming exhibitions and events.
When creating your website, consider your legal obligations. Your website will likely need:
If you plan to showcase the work you are exhibiting on your website, you will need written consent from the artists to ensure you are not infringing their copyright.
You should also clearly outline who owns the intellectual property (IP) in your website’s terms of use. The same applies to social media; if you want to showcase the work of artists on your social media profile, ensure you have their written consent.
4. Artists Royalty Scheme
The Australian government introduced the Visual Artists Royalty Scheme to ensure artists receive ongoing compensation for their artworks. This scheme may entitle artists to a 5% royalty when their work is sold through an art gallery. Being aware of the Artists Royalty Scheme will help you pay artists accordingly.
For an artwork to be subject to resale royalty rights, it must:
- be an original piece of visual art;
- not be a mass-produced item, a building, model or plan of a building, a circuit layout or a manuscript; and
- be resold for more than $1,000.
The Copyright Agency manages the Artists Royalty Scheme. All sales of over $1,000 must be reported to the Copyright Agency. Artists can collect their royalty payment:
- from the agency;
- by incurring a 10% fee; or
- from the gallery itself.
5. Navigating Copyright Laws
Artworks are subject to copyright protection under the Copyright Act. They have both economic and moral rights.
The following rights are attached to artworks:
| Economic Rights | Economic rights include the rights of:
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| Moral Rights | Moral rights include the rights to:
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Economic rights can be transferred, while moral rights always stay with the artist. However, artists can consent to an infringement of their moral rights.
Generally, artists own the copyright of their works. When a buyer buys an artwork, they buy the physical asset and not the copyright. For example, if an artist sells a painting, the buyer owns the canvas with the painting but not the right to reproduce the painting. Reproducing the artwork by scanning the picture and printing it on t-shirts would be an infringement of the artist’s copyright.
To avoid conflict, it is crucial that you frame the ownership of copyright clearly through written agreements.
This fact sheet outlines the changes to data and privacy protection in 2023.
Key Takeaways
Opening an art gallery is a great way to share your appreciation for art with the general public. It will allow you to connect with like-minded people and showcase the hard work of talented artists.
Accordingly, it is essential to be mindful of the legal and commercial aspects of owning a business to ensure the success of your art gallery. If you have any questions, our experienced business structuring lawyers can assist you as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1800 870 694 or visit our membership page.
Frequently Asked Questions
What is the Artists Royalty Scheme, and how does it affect me?
The Artists Royalty Scheme entitles artists to a 5% royalty on the resale price of their artwork when sold for over $1,000. As a gallery owner, you are required to report such sales to the Copyright Agency and ensure artists receive their due royalties.
How can I protect the intellectual property of the artworks I display?
Artists retain copyright over their works, even after sale. To avoid legal issues, clearly outline copyright ownership and usage rights in written agreements with artists. Additionally, avoid reproducing artworks without permission, as this may infringe on the artist’s rights.
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