If you’re creating a blog with the intention of making money, you might consider creating a business entity for it. Regardless of whether you see this blog as a business or you’re simply monetizing a blog you have a personal interest in, a blog with an income stream attached to it needs to be carefully managed if you’re going to maximize your profitability.
You might be tempted to create a limited liability company (LLC) for your blog, establishing a business entity for it. But is this step really beneficial, and is it necessary if you want to run a profitable blog?
Starting an LLC
The process for starting an LLC is fairly easy. You’ll register your business as an LLC at the state level, and each state offers its own rules, regulations, and process for getting started. Starting an LLC in California, for example, involves naming your company, creating a document called the Articles of Organization, and assigning a Registered Agent.
Each state’s process is slightly different, so you’ll need to research the requirements for your particular state. You may also consider starting the LLC in a different state than the one you live in, if it offers more advantages.
The Advantages of an LLC
So why would you start an LLC? Having an LLC for your blog gives you three main advantages:
- Liability protection. The main reason to have an LLC is to limit your personal liability. If you make money blogging and write about other people or businesses, there’s a chance you could break a law, violate an agreement, or otherwise instigate legal action from another party. If you’re a sole proprietor, you may be held personally liable for any damages; in other words, your personal assets could be at stake. If you create an LLC, the LLC will be treated as a separate legal entity, so your assets will be protected.
- Tax advantages. There may also be tax advantages to creating an LLC. Your LLC will exist as a separate, pass-through entity for tax purposes. In many states, there are no taxes on an LLC directly; instead, you’re taxed as an individual if and when you decide to collect income or profits from the LLC. The LLC’s profits and losses will be calculated independently, giving you control over when and how you’re taxed on the money you make from it.
- A professional image. Finally, adding an “LLC” to the end of your blog could give you a more professional image. You might be more likely to attract or retain a readership, and you could be taken more seriously by prospective clients. Establishing an LLC shows that you take your work seriously, and proves how dedicated you are to making your blog successful.
Is It Necessary?
The real question is, of course, whether your blog needs to have an LLC attached to it.
- Starting the blog. There’s no rule that says you have to have an LLC when you start a blog. Anyone can start a blog at any time, and for any reason. You don’t need to register your name, and no one will ever ask you to verify your business status.
- The income factor. LLCs are almost exclusively used for businesses that are making a stream of income. If you don’t plan on monetizing your blog (i.e., if you’re writing just for fun), there may not be a reason for you to create a legal entity for it. Furthermore, if you’re only making a few hundred dollars a month, any advantages you get from starting an LLC will be minimal.
- Other business entities. You should also consider the fact that LLCs aren’t the only type of business structure available to you. You could also create a C-corporation or an S-corporation if you wanted to expand the business and hire employees. Or you could use a sole proprietorship or a partnership to simplify how you’re taxed. Do your research before you decide on the perfect business structure for your situation.
You don’t need to have an LLC for your blog, but depending on how you’re using it, and how much money you’re making, it could be a valuable move. If you’re only treating your blog as a hobby or a side gig, it probably isn’t worth the extra time, but if you need the liability protection and the tax advantages, it’s an investment you can’t pass up.