I hear this question a lot in the blogger groups I visit. The question is do bloggers need an LLC? The answer to that is PROBABLY. There other legal forms that can be used for a blog. These are the most common ones.
- Single member LLC
- Multiple member LLC
- Sole proprietor
Myself, I’ve been a sole proprietor for 15 years on my two blogs, but I am changing my registration to a single member LLC at the end of the year. It’s what I should’ve had from the start, but I was a little intimidated, so I’m a little late to the party.
Disclaimer: I am not a legal professional and I’m obviously fairly new to LLC’s, so definitely do your own research if you are thinking of starting an LLC for bloggers to keep your blog and personal assets protected.
What is an LLC anyway??
An LLC stands for Limited Liability Company. I’ve been thinking of setting one up for years, but I was just intimidated by all the legal jargon. So, I talked to my friend Amira over at ASelfGuru.com. She’s got legal training as a lawyer and tons of experience with online applications of the law and particularly working with bloggers. I’m also one of her successful affiliate for her legal templates, like her LLC Agreement template, so it made perfect sense to contact her.
Here’s a snippet from her bio – Internationally quoted Amira Irfan is a business lawyer, blogger, and coach who has been featured around the world with the compelling story of how she turned her passion for helping entrepreneurs into a life-long mission.
After watching her father’s business get sued for $90,000 for a legal mistake that could have been avoided, Amira decided to become a lawyer, so she could prevent other entrepreneurs from suffering the same fate.
With over 10 years of legal experience, she started her side hustle, A Self Guru, a million-dollar company, that teaches bloggers and entrepreneurs how to make money online and legally protect their businesses.
Here’s a YouTube Interview I did with her a while back talking about her affiliate program.
So Do Bloggers Need an LLC?
An LLC is a business structure that provides personal asset protection. So, if you do something wrong on your blog, people can’t sue you personally. They can only sue the assets of the blog. It’s a business entity that provides business owners with limited liability. LLCs are flexible and can be used for many different types of businesses because an LLC combines the features of other business entities, like corporations (C or S corporations) or partnerships.
An example might be if you accidentally use someone’s photo or if someone feels you’ve copied their post and decides to sue you for hundreds or thousands of dollars. If you are a sole proprietor, they might be able to go after your your house or your personal money. But if you have properly constructed LLC, they would be limited to the profits or assets of the business if they are successful in the lawsuits. I know several bloggers who have been sued in similar circumstances, so I’d say you’d definitely be smart to have an LLC in place.
There are two basic types of LLC’s. There is a single-member LLC – which is basically the default and the multi-member LLC if you have partners or family members that are involved in your business. You should absolutely consult your accountant or tax advisor regarding whether forming an LLC makes sense for your particular situation.
How to Set Up an LLC
An LLC is fairly easy to set up, but it’s a legal document, so you definitely want to have your ducks in a row and make sure your paperwork is set up properly. Amira has a very simple LLC Agreement that is pretty straightforward for a simple single-member LLC, but naturally it gets more complicated when you add partners to the mix. You have to file it with the Secretary of State within your state.
Here’s a link to Amira’s LLC Agreement Template if you’re thinking about doing your own LLC for your blog.
If you have a multi-member LLC, make sure you are VERY clear on each member’s financial responsibilities, each member’s compensation, and definitely an exit plan if/when a member decides to leave the partnership. I didn’t choose that option, even though I had some family members that I wanted to invite to be a part of this, but I specifically avoided it because doing business with family members can be a total landmine. I’m not messing with that.
A single-member LLC is simpler than setting up a corporation because you don’t need any meetings or stockholders unless you want them. That’s actually one of the things that freaked me out in the beginning because I was visualizing having a board meeting all by myself. But apparently, that’s more of a thing for a multi-member LLC.
The reason I’m waiting until the end of the tax year to set mine up is because it didn’t seem smart to have two types of entities within the same fiscal year.
Don’t Try to Fly Under the Radar – Even with a Small Blog
I get it. It’s a huge temptation to just ignore all the legalities and just stick your head in the sand. I work with a lot of bloggers and I know lots of them do that, but there are some legal formalities that really need to be observed. There are certain requirements from the FCC about affiliate disclosures and legal pages that you need to have.
Especially if you are monetized, you need to declare that income and pay taxes on it. Even if you aren’t earning any money (yet!), you still can and should take tax write-offs for your hosting and other expenses against any future earnings.
I’m not an accountant, but I know if you were to get audited and they find out you’ve been earning money under the table, there would definitely be some legal penalties and fines. I don’t know about you, but the thought of being audited or in any type of legal trouble absolutely terrifies me! So, that’s why I try to do all the right things – to file my taxes, to keep my business and personal funds completely separate, and now to set up my LLC so I’m properly situated and protected as best I can.
You can hire an attorney or a business consultant to set up your LLC, but it usually isn’t necessary unless you have a fairly complex multi-member LLC. There is quite a bit of information available online.
If you’re interested in learning more about setting up an LLC for your blog or business, here are some resources.
Amira Law’s LLC Template – Note that as this is an affiliate link, I will receive compensation if you purchase through my link.
I hope you find this information helpful.