Is Onlyfans Safe for Creators?
When setting up an OnlyFans account, not many people think about it as a business and the legal consequences that come along with it. Fortunately, there are ways to legally protect yourself that are outlined below.
One way to ensure your posted content on OnlyFans is not stolen by someone else is registering a trademark for the logo or name that you insert on your posted content. Regardless of what your logo or name may be, it is essential to not skip this step. Any and all content you post should contain a trademarked logo or name. Not only does it substantially benefit you to do so, but it also makes it more difficult for people to steal your content. If someone does indeed steal your content, it is much easier to have a lawyer write a Cease-and-Desist letter when your content contains a trademarked logo or name.
- Limited Liability Company
Another way to legally protect yourself is by setting up a Limited Liability Company (LLC) for your OnlyFans account. Doing so can provide many benefits for your OnlyFans business. First, and perhaps most importantly, registering your OnlyFans as an LLC will protect your personal assets from most liabilities that may arise from your OnlyFans business. Therefore, if someone sues you in a case that arises out of your OnlyFans business, but it is put under an LLC, they will not be able to go after your personal assets because the LLC protects such assets. On the other hand, if your OnlyFans business is not put under an LLC and is instead under your name, a lawsuit may make your personal assets vulnerable to satisfying claims. Additionally, putting your OnlyFans under an LLC allows for certain tax benefits which are discussed below.
- Tax Structure
When making an OnlyFans account you are not considered an employee of OnlyFans; instead, you are considered a business owner. Any income you make on OnlyFans will be subject to ordinary tax and will also be subject to self-employment tax (currently 15.3%). There are several options for how you can declare your OnlyFans income for tax purposes.
First, you can file as a sole proprietorship. Whatever expenses you incurred that are regarded as essential to your business can be deducted from your taxes. Filing under a sole proprietorship subjects your income to federal income taxes and self-employment taxes.
As previously mentioned, putting your OnlyFans business under an LLC provides certain tax benefits. One of the concepts of LLC taxation is known as the pass-through. This means that the earnings from the LLC pass through to the LLC owner without the need to pay corporate federal income taxes beforehand. Therefore, taxes are paid at individual income tax rates and there is no double taxation. LLCs also have more flexibility when filing taxes. LLCs have the choice to either file as a sole proprietorship or an S Corporation.
Filing as an S Corporation also has its benefits. Under an S Corporation, you will not need to apply the self-employment tax and instead, you will pay the 7.65% tax that you would be subject to as any employee.
- Partnership Agreements
Many OnlyFans stars need help to kick-start their business. Often, this is done via cross-collaborating with other content creators. Think of it as being like a musician featuring other artists. While this is a great idea to increase profile traffic, the legal aspects should not be ignored.
Collaborating with other content creators may lead to a “business divorce” and open the floodgates to litigation. Simply put, if not done properly, it could be a huge mess in a bad-case scenario. However, one technique to protect yourself is via a partnership agreement. A partnership agreement will provide key matters such as how decisions will be made, equity distribution, and how disputes are handled. Having a partnership agreement in place will protect collaborators because it will not allow one partner to steal all the business from another and provide legal protections in time of emergencies. Think of it like any other business; if you have a restaurant business and you do everything while your partner does nothing, would you want them to receive 50% of the profits the business generates? The same is true about OnlyFans and thus an operating agreement can fix such discrepancies.
OnlyFans Legal Issues
You may now be wondering if OnlyFans stars need lawyers. While there may be certain things you can do yourself to protect yourself legally on OnlyFans, setting up a trademark for your content should be done with experienced attorneys due to its complexity. Making mistakes may lead to restarting the process and you will not know if you are properly doing it throughout the process. If you are treating your OnlyFans as a business, ask yourself will I use a lawyer for my business? A majority of the time the answer is yes, so OnlyFans should be no different.