Art Gallery Term Paper

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Novation -- Art Gallery

Art Gallery

There is no reason why Jane should not allow the artists she has found to show their artwork and for her to start making commissions off the sale of the work immediately. The law holds that any business done before she receives the certificate of incorporation is legitimate. Her responsibility is retroactive. She owes taxes on her percentage of the sale of the works that she is asking from the artists, whether it is before or after the certificate of incorporation is received. For instance, if she is asking for 60% of the sales price on a work of art sold and a piece of artwork is sold on the first day for $100, Jane receives $60 from that sale. If the State sales tax is 9%, she will charge an additional 9% tax of $100 to the customer, or $9.00.

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Jane will receive 60% the $9.00, or $5.40, in addition to the $60, but she will have to set the $5.40 aside for taxes, whether she makes this amount of money before or after the certificate of incorporation is received. These sales must be disclosed, but they are legitimate.….....

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