Do I Need an LLC For My Blog?
Do I need an LLC for my blog? This is a common question, and the answer will vary based on your individual circumstances. 3 min read
Do I need an LLC for my blog? This is a common question, and the answer will vary based on your individual circumstances. Ultimately, it's up to you to decide whether an LLC, or another business structure, is best for your blog/brand.
Bloggers have varying reasons for setting up a business structure, but the most common is to protect their personal assets. In these scenarios, LLCs and S corporations are two of the most common options many bloggers consider. In comparison to a traditional C corporation or S corporation, an LLC is often the better choice as it's easier to set up and requires fewer formalities.
Treat Your Blog as a Business
Before you start considering what business structure to use, it's important you treat your blog as a business to begin with. Many bloggers like the idea of treating their blog as a business, but they aren't necessarily sure how to make that transition from a hobby to a professional entity. Start by deciding whether it makes sense to incorporate or not. Then, decide which business structure is right for you.
Benefits of an LLC for Bloggers
If you're contemplating an LLC for your blog, there are a number of benefits that may help your decision:
- Organizing your business as an LLC can give you additional credibility and help some people take you more seriously.
- There is the potential for tax breaks on income each year for "flow-through taxation".
- By forming an LLC, you add a layer of protection for your blog, and it separates your business and personal assets.
- There is a reduced risk of audit for people who file their taxes as an LLC when compared to businesses who file as a sole proprietor.
When Should You File for an LLC?
You should consider turning your blog into an LLC when the operating costs for the LLC will be the same as a sole proprietorship. Once your income increases, you can likely reduce your running costs via an LLC. This is because the LLC has a more flexible tax structure and offers "pass-through" taxation, which eliminates the double taxation issue with traditional corporations. Depending on where you live in the world, it may ease your tax burden even more, as personal income is often taxed higher than companies in other countries.
Bloggers have to decide when the growth is significant enough to warrant the extra time commitment and money to separate the blog into its own separate legal entity. Each state is different, as is every country, so you will need to research local laws and find which is right for you. Be cautious: some states tax LLCs at a higher rate, so a corporation may make more sense in those particular cases.
DBA versus LLC
Some bloggers are confused by the term "DBA," which stands for "doing business as." This is a fictitious name filing (or something similar to that depending on where you live), and it's used when your business has a different name than the person owns it. This is not the same as an LLC filing, nor does it take the place of a business license for a sole proprietorship.
Growth can Equate to Valuable Assets
As with any business, successful bloggers may have growing pains as they begin to gain a large following. This can be anything from outgrowing the original hosting provider to needing a fully-customized site that requires an expert web designer's skills. However, bloggers need to remember that as they grow and start making more money, they are building assets which need protection. The website domain, the brand, and even a Twitter account can suddenly become valuable assets. This is why bloggers need to be more proactive in protecting their blog's assets.
There are a number of situations where bloggers could be exposed to personal liability. Perhaps you are sued by an affiliate who claims they are owed unpaid commissions, or another blogger accuses you of theft. And, there are instances where someone might sue you for a bad review or something negative you said in a post. If you leave yourself exposed, it could ruin your blog.
Compare your blog to a real estate purchase. Would you buy a $300,000 condo without purchasing insurance or protecting yourself from losing it? Then why would you build a $300,000 blog without proper precautions? Protecting your blog can keep your personal assets separate and safe from lawsuits and fines.
If you need help with determining whether you need an LLC for your blog, you can post your legal need on UpCounsel's marketplace. UpCounsel only accepts the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.