What are the benefits for influencers and content creators forming an LLC?
Any business that with risk should form an LLC to protect its owners from liability. This means that in a legal issue, creditors cannot come after the influencers personal assets, only the assets of their social media business. Additionally, there can be tax benefits when using an LLC for a social media influencing or content creation business. Establishing an LLC gives the influencer more legitimacy in negotiating deals and sponsorships. This business structure can be more appealing to corporations and companies interested in partnering with influencers. Finally, an LLC can help an influencer to protect their brand. When the LLC is registered under a specific name, no other entity in the state can use that same name. Establishing an LLC can help the influencer protect their other intellectual property as well, such as trademarks and copyrights.
What are the tax benefits and implications for an influencer filing as an LLC?
An LLC is considered a pass through entity for taxes. This means that an influencer can file taxes on his or her personal tax return, similar to if he or she was filing as a sole proprietor. With an LLC, the influencer can avoid double taxation which he or she would be subject to as a corporation. An LLC also helps the influencer to make deductions for business expenses on their tax returns. Influencers and content creators should consult with an accountant to determine the deductions for which they are eligible.
How do I start an LLC as an influencer?
In order to begin an LLC, the influencer will need to choose a name for their company. The influencer will then need Articles of Organization to register the LLC with the state and pay the filing fee. Influencers starting an LLC will start a single member LLC with themselves as the only member, which allows them to pay tax on their personal income tax return like a sole proprietor. The influencer will have to choose a registered agent to file its Articles of Organization. The LLC will also need an operating agreement to describe the functions and processes of the LLC. Once the LLC is formed, the influencer will need to maintain it by keeping up with annual fees and filing requirements. Influencers can hire a corporate attorney to help them with the steps of organizing and filing their LLC.