I have not registered by business name. It started off as a hobby and is becoming a part-time job now. I do not plan on doing this full-time. Since I make less than a certain amount of money I thought I didn't have to register my business or declare anything on my taxes (I am in Canada). I protect my images with a watermark, should I be doing something else? I am still quite new to this, I really appreciate your advice!
What you should do is find out what, if any permits or licenses are required. I have no idea about Ontario legislation, but in BC, almost every municipality requires you to purchase a business license if you want to run ANY sort of business or trade (other than garage sales). As far as reporting goes, Revenue Canada requires that you report all income, but it can be done on the "miscellaneous extra income" line of your tax return. What you don't have to do is collect/remit sales tax if your gross income is below 'X' dollars (refer to provincial legislation for exact figures), but you should keep very detailed records so that you can, if required demonstrate that your business income was below the limit.
As for registering a business name, that again is provincial, so I can't speak for Ontario. In BC, the whole process costs less than $100 (filing fees) and means that a business is "legitimate", in other words, if things did take off, you would already have the foundation in place to apply for your GST/PST/HST number, etc.
The single most important thing you need to do if you are taking money for services (and even if your only working on the barter system) is have insurance. The minute someone pays you ANYTHING for your work, they will assume you're a business (regardless of WHAT they may say to you), and if they trip over a light stand and chip a tooth....