Jack DonaldBlogging is a creative and entertaining way of communicating with your audience. It allows you to express yourself, share your views, and make your name famous. Many people have their own blogs, from housewives to CEOs of major corporations.
Is blogging regulated by the law? Does an author have to legalize the results of his activity? Should a blogger form a limited liability company, a corporation, or is it possible to do without it?
The answer is not as obvious as it seems at first glance.
During the process of starting a blog, you should define the goals that you want to achieve. This includes the decision of whether it will be just a hobby or a source of additional income. That is what ultimately determines whether or not you will need to create your LLC.
In this article, we’ll take a look at what an LLC is and what its benefits are for bloggers, and discuss how to start a company with the help of services like LegalZoom and ZenBusiness or on your own.
What Is an LLC?
Before we begin to figure out the necessity of an LLC, it would not be superfluous to outline what this business structure is.
An LLC is a fusion of the best elements that sole proprietorships, general partnerships, and corporations have. It organically combines their elements, providing the owner with the most beneficial conditions for doing business.
What are the similarities with these types of business structures?
First of all, in the tax system of an LLC. Neither sole proprietorship nor a general partnership, nor the majority of LLCs needs to pay taxes and file their tax returns. All company profits or losses are taken into account only in the personal returns of its owner, which allows you to avoid “double taxation” effectively.
You can choose a different system for your LLC and pay taxes as a C Corporation if you want, but this is rather the exception than the rule.
From a C Corporation LLC received the fundamental principle of limited liability. In contrast to the sole proprietorships, LLC is responsible for their obligations only within the limits of their own property. The founders of an LLC are not personally liable.
In other words, no matter what the circumstances may be, creditors can only apply for the equity of the company, not for your personal assets as money, real estate, car, etc. This works even if the assets of the LLC are not enough to pay the full amount of the declared demands.
The reason for the popularity of LLC can be found in a set of its features, making this business structure extremely attractive to the entrepreneurs.
The question you may ask is, what does blogging have in common with all this? What reasons might motivate a blogger to form an LLC, and what are the benefits?
Do I Need to Form an LLC for My Blog?
Business is created to make money. The situation is a little different if you plan to have a blog just as a hobby, telling about your life and interesting events in it. All this can be done without forming an LLC, without the risk of facing any unpleasant legal consequences.
However, if your blog will be not only for fun but also as one of the sources of income, forming an LLC is a great option to protect yourself from problems with the law.
Because an LLC is a business structure, first you need to find a way to monetize your blog if you want to take advantage of its benefits.
The most popular ways to monetize your blog are:
- Adding advertisements to your page: as a rule, these are commercial pay-per-click ads. If you want to add them to your site, use a program like Google AdSense. A banner or sidebar on the same subject, that your blog specializes in, will give you a great chance to make money.
You shouldn’t expect huge sums right away, but ads on your site are a stable and passive source of income.
2) Affiliate links: affiliate marketing means adding links to other companies’ offers in your blog. Such cooperation can be quite productive because you will earn every time readers click on a link and make a purchase on an affiliate site.
3) Selling products: this option would be great for those whose blogs are related to products or services. You can do reviews of products and offer your readers to buy them in the process, and that sounds like the start of a successful business!
4) Sponsorships: popular thematic blogs, run by a well-known author, attract a large audience.
And this audience is of interest for manufacturers or sellers of goods, because it is easier to sell their products or services to readers of such a blog.
If you agree to write for this company, the reward will not be long in coming. As a rule, the income in such cases depends on the actual profit or is a flat fee for posting.
No matter what method of blog monetization you choose, creating an LLC will be the best solution for moving money into the legal field.
This will guarantee that in the case of a dispute between you and the customer, all the transactions and the profits made from them will be documented, which will make it easier to prove.
Note that the limited liability is directly connected with maintaining corporate veil integrity. This means that you can lose your special status if you do not separate your corporate assets from your personal assets. To solve this problem, open a separate bank account for your company.
In addition, it is a good idea to take care in advance to have an operating agreement, a document describing the structure and basic principles of the company, and stating the responsibilities of its members. In the case when your LLC becomes a party to a lawsuit, such a written agreement would be very useful. It will provide additional proof that you are an LLC representative and not a sole proprietorship, where business liability rests with the owners.
Can I Hire an LLC Service to Form My Blog’s LLC?
When you decide to start a company, you will probably ask yourself how exactly the process works and what steps you should follow.
Thanks to flexible requirements, LLC registration is not very difficult. However, to be successful you have to follow the procedure exactly. A serious violation at the initial stage can affect the corporate veil of the company and, consequently, deprive it of the benefits of limited liability. So if you are planning to form an LLC for the first time, you should be careful in your preparations.
To reduce the risk of potential problems, as well as save time, money, and effort, you can sign a contract with LLC formation services, entrusting them with all the paperwork.
The services of professional online companies providing comprehensive business support are of the same quality as the work of the attorneys, while the prices are far cheaper. If you choose one of the 7 best LLC services, you will receive qualified assistance and assurance that the company’s documentation is in perfect order.
The top three companies for creating LLC are:
- ZenBusiness (from $39): high quality and a wide range of business services combined with an affordable price provide this service with thousands of positive reviews and grateful customers;
- Northwest Registered Agent ($225): their best-registered agent service includes verification of all papers received from the client for compliance with the law, and best customer support will quickly and professionally respond to any request you have;
- Incfile (free): its LLC formation package will not cost you a dime, except to pay the mandatory state fee. In addition, they provide free registered agent service for the first year.
In Conclusion
There is no definite answer to the question of whether or not your blog needs an LLC.
However, it is hard to deny that an LLC provides guarantees and benefits that can play a crucial role in your financial well-being. In addition, this business structure does provide entrepreneurs with the most favorable conditions possible.
To summarize, we can say that each case requires an individual approach.
Some bloggers do not need to register a company, as they are focused solely on publishing neutral content that does not imply profit-making. Obtaining LLC status will only be an unreasonable waste of money in this case, and probably will not bring any benefit.
But if you plan to monetize your blog, or at least consider doing so in the future, consider starting an LLC. The cost of its creation and maintenance is relatively small for the certainty and protection you’ll get in return.
