Social Media & Influencers – Limited Liability Company Legal Setup

Selling under a sole proprietorship

Content creators who are just taking their first steps often conduct business under a sole proprietorship. Working under a sole proprietorship does not require any legal settlement in the first place. However, there is a catch: sole proprietorship is extremely limiting and usually works only for a short time and for small influencers who are not seriously engaged in content creation.

In addition, selling goods and services under a sole proprietorship incurs personal liability, which means that you will have to bear all the expenses in case of a failure. This is a huge financial responsibility that many beginner influencers are not ready to bear. Henceforth, forming an LLC is advisable for any growing content creator.

Starting an LLC

There are many reasons to form an LLC but the most important one is that it can free content creators from an undesirable legal or financial liability should their business turn the wrong way. While in a sole proprietorship, the individual assets of a content creator are at constant risk, forming an LLC limits this liability in case of unforeseen events for the business. 

A Limited Liability Company puts a strict line between personal and business liability, which is not only preferable from a legal standpoint but also better for the entrepreneur’s peace of mind.

Obtaining a bank account

Being a content creator means obtaining a corporate bank account for payments associated with the monetized content. Whether a blogger sells actual goods or offers educational, coaching, or any other services, a bank account is indispensable for operating legally.

Legal documents

Once you form an LLC to promote and sell services or goods online, having all the legal paperwork at hand is a must. The package can include different documents, from properly drafted and signed contracts with third parties to terms and conditions for selling or reselling goods. As an individual interpreter, gathering all the administrative paperwork can be tough without the assistance of a legal professional.

Defining a legal structure

As an online influencer, a content creator, or a seller of goods and services, you can turn your hobby into a business at any point and gain actual income. The most common reasons to start an LLC include:

• A strict division between personal and business liability;
• Enhanced legal protection in case of disputes with clients or fraud;
• Facilitated tax-paying process;
• Transparency and credibility before the government and your community of followers.

In LegalBison’s practice, most influencers and social media creators do not require an LLC when they are just starting out. However, forming an LLC is recommended once the process gets serious and starts bringing actual income to the owner.

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Forming an LLC as a content creator

You can facilitate the LLC obtainment process with the help of a legal professional. The assistance of a lawyer is highly advised since he or she will properly analyze your business model from a legal standpoint and reveal possible risks that can be avoided by forming an LLC. LegalBison treats each case with precision and from multiple perspectives, defining the best legal course for every content creator regardless of the services they offer.

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Banking solutions for content creators

Are content creators entrepreneurs? Yes, as long as they earn any amount of income from their activities. A stable flow of money is usually a prerequisite for opening a corporate bank account. Besides, a business bank account is an obligatory requirement for an LLC. At the same time, whether you work as a sole proprietor or own a Limited Liability Company, having a separate bank account for business activities is a surefire way to simplify the tax-paying process.

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