I use a photographic reference and never sell my original work. I have done this for many years.
Only recently a friend was asking how the copyright system works and It hadn't even crossed my mind.
What should I do?
The problem if there is one, lies in the fact that you are using a photograph as your reference. If this is a photograph which you have taken yourself, there's no problem. However if it's an image you found in a magazine or on the internet, there may well be copyright implications in copying that image without permission.
Of course artists have copied other artists for centuries, and it is often seen as a way of learning to paint or draw. However under copyright law, if the second artist copies a substantial part of the original work without permission, this may amount to infringement, assuming that copyright exists in the original. You use the the word 'reference' to describe this part of the process. But a court would have to decide whether this amounted to taking the essence of the original work. Clearly if you use a number of different sources and produce a painting based on all of them, this is less likely to infringe any single image. But if you rely on a single source, and that image has an obvious artistic quality which you then incorporate in your painting, that could be a problem. These are notoriously tricky issues about which to lay down fixed rules. For instance see these two conficting outcomes: Sweden and France.
Let's assume that your paintings do not infringe anyone else's copyright. You will therefore undoubtedly own the copyright in your work, due to the creative process you followed, making dozens or hundreds of tiny decisions about how to portray the person you wish to feature. Once you own that copyright, you can decide how to exploit it. Every copy of your work which you issue (whether they are copy numbered or not) will be protected by copyright, and the new owners of these copies will only have limited rights over the physical object they have purchased (such as to lend or sell it, to exhibit it in public or destroy it) but they may not make copies of the work or authorise others to do so. For instance an owner of one of your works could not authorise a magazine to publish a photograph of your painting. Secondly you have the right, which you need to assert, to be credited as the artist. If you sign your works, this is sufficient to assert you right. If you don't sign your work, it would be sensible to affix on a label on the back of each print or supply in a document which accompanies each sale, a statement that you assert your right to be credted as the artist. You also have certain other moral rights, such as the right for your work not to be treated in a derogatory way which damages your honour. This somewhat archaic wording reflects the origin of this right back in the nineteenth century. Some countries such as France and Italy still take these rights extremely seriously, such that they grant them in perpetuity; under UK law they only last for as long as the copyright itself.
I hope this answers your question.
There is no fixed number. It will depend on the type of art and the fame of the artist, among other factors. Here's what the UK Fine Art Trade Guild recommend:
What are Limited Editions?
Limited edition reproductions are produced in limited numbers, which is intended to make the picture more exclusive. The market price can rise over time, if demand outstrips supply. Edition sizes vary, but the size of the edition is a marketing decision and has nothing to do with the constraints of the production process. The Fine Art Trade Guild print standard sets a maximum edition size of 1950, but recommends that editions are kept below 850 worldwide. Most limited editions are signed and numbered in pencil by the artist with a commitment that no other reproduction of the image will be made. People who buy limited editions from reputable sources will therefore not see that same image on greeting cards, packs of cards or other merchandise. However, this is not a legal requirement so you should check that this is the case before buying the print.