Colorado LLC
Forming an LLC for a blog provides a legal separation between the blogger's personal assets and business assets, helping reduce personal liability and protecting their assets if legal issues arise.
Starts at $0 + state fees and only takes 5-10 minutes
Starting a blog is one of the most popular side businesses these days.
The internet has become an amazing playground for people to share ideas, connect with loved ones, and yes, create income! While starting a blog can be extremely exciting, it’s important for bloggers to protect themselves. This guide walks through how and why bloggers should start an LLC to protect themselves and their blog.
Before diving into why an LLC matters for a blog, it’s essential to outline what an LLC is. A limited liability company mixes elements of a sole proprietorship, general partnership, and a corporation, essentially giving entrepreneurs the best of these worlds.
LLCs are typically taxed similarly to sole proprietorships and general partnerships, in that the owners include any company profits or losses into their personal returns — the LLC itself does not owe income taxes. An LLC may also elect to be taxed like a corporation, although this is not a very common option.
There are similarities to corporations, too, especially when it comes to financial responsibilities. In an LLC, the owners or members are not usually personally accountable for the financial status of the business. This means that if someone sues the LLC, their personal assets are not at risk.
In short, LLCs are so popular because they offer a range of legal protections for a blog while also enhancing its credibility. But is it really necessary for a blogger to form an LLC?
There are plenty of legal considerations for a blogger to think about when deciding whether to protect their blog with an LLC. First off, there’s the issue of copyright law. Many bloggers aren’t aware of how copyright law affects their work and end up violating it without even knowing they’re doing so. For example, if a blog uses imagery from other websites, or if the blogger uses text from articles/blogs hosted elsewhere on the site, it’s entirely possible that they could find themselves in the crosshairs of a copyright claim.
In this situation, a blogger certainly doesn’t want to be operating their blog as a sole proprietorship, because it would leave their personal assets unprotected in case of a lawsuit.
Another issue is the potential for libel or slander. If a blogger writes false information about someone in their blog — whether or not they intended to do so, or were even aware of doing so — they open themselves up to a defamation lawsuit. Again, this is another situation where an LLC can help protect a blogger and their site from a civil suit.
Overall, these are all good reasons why bloggers should prioritize protecting themselves and their blog with an LLC.
If someone is starting a blog just for fun with no plans to monetize it in any way, they can almost certainly get away with not forming an LLC. In fact, if the blog isn’t bringing in any money, there’s really no reason to waste the time, effort, and money to form an LLC. After all, if someone isn’t operating a business, they don’t need to form a business structure for their blog.
However, beyond the simple “friends and family” type of blog, or perhaps one for personal enjoyment, it gets a bit trickier. For forming an LLC to make sense for a blog, the blogger needs to monetize it in some way.
And, if a blogger monetizes their blog, they should certainly form an LLC to protect themselves and their blog. Here are a few of the most common ways of doing just that:
If a blogger decides to pursue any of these monetization techniques, they’re entering a situation where it would definitely be advisable to form an LLC. To be honest, it’s even recommended to form the LLC before any monetization starts. If a blogger waited to start an LLC until after they’d already started transacting business, their initial transactions wouldn’t be covered by personal asset protection.
Operating a business entity without a corporate veil protecting the owner’s assets is almost never advisable, unless the blog covers a topic that presents no liability whatsoever.
There are three main ways to go about forming an LLC for a blog. It’s possible to tackle the DIY approach, hire an attorney, or use an LLC formation service.
This section briefly outlines the pros and cons of each method.
The main advantages of the DIY method are mostly related to cost. With this option, a blogger doesn’t need to pay anyone to help them form their LLC, as they’re handling all of the preparation and filing aspects themselves. The only money the blogger needs to pay to get their business formed is the fee paid to the state, which would still be a charge if they hired a lawyer or an LLC formation service.
The disadvantages of the DIY approach stack up pretty quickly, though.
First, there’s the issue of whether the blogger actually knows what they’re doing. The process for forming an LLC varies from state to state, so it’s not always easy to tell what one specific state will require. Furthermore, if the blogger doesn’t have any experience forming businesses, it might be more complicated than expected. There’s also no peace of mind that the other options provide. Finally, forming an LLC independently can be time-consuming, as the blogger would need to draft and file all the paperwork themselves.
For those who do want to give the DIY option a try, ZenBusiness’s “How to Start an LLC” guide can be very helpful. Here are the basics:
The advantages of hiring an attorney are mostly based on expertise. There’s obviously no better way to ensure that each step of the formation process is completed correctly than to hire an experienced business attorney. In addition, hiring a lawyer takes a significant amount of hassle and effort off the blogger’s shoulders, allowing them to focus on actually building their business.
However, the disadvantage is equally as obvious: paying a lawyer’s fees can get incredibly expensive. Hiring an attorney can cost hundreds or even thousands of dollars, which can be quite a prohibitive factor for a blogger. If someone chooses this route, they’ll want to start by finding a qualified business attorney in the area. Then, they’ll need to schedule a consultation to discuss their methods and determine if they’re a good fit for the business.
After that, all the blogger really has to do is provide their attorney with some basic information and let them handle the rest.
One of today’s top-recommended routes is to hire a reputable online business formation service. This option provides the best of both worlds, as it’s much cheaper than hiring an attorney, but the business still receives the benefits of having true professionals handle the LLC formation. Some of these brands, ZenBusiness included, even offer LLC formation packages for $0 plus state fees, and others charge low fees. Many of these also offer extras like registered agent service and annual report services, which many entrepreneurs find helpful.
The only real downside compared to hiring a lawyer is that the business won’t receive the same level of personalized service, and also, these companies have less expertise as well. Still, many LLCs (especially those for blogs) don’t really need a heightened level of personal service or expert advice, so for a lot of small business owners, an LLC formation service can be a great fit.
A key reason that people opt to form an LLC is to take advantage of the asset protection an LLC can provide. But, in addition to the liability protection the LLC entity itself provides, a business owner can shore up their personal asset protection by developing an effective LLC asset protection strategy, helping minimize the risk for members.
Some of the key components of creating a solid LLC asset protection strategy include employing the following:
Unfortunately, no business or operation is perfect, and accidents and mistakes can and will happen. When they do, a business owner wants to ensure they have an appropriate level of business insurance to protect their organization and owners from potential liability. Having the right business and liability insurance in place can help protect personal and business assets from incidents occurring during its operation and functioning.
Note: premiums are recurring expenses and may be costly. However, it’s far more cost-effective to pay for insurance over the long term and be prepared than not to have it and face a sudden, costly incident.
There is a legal precedent established that contends some LLC owners could lose limited liability protections under what is known as an “alter ego” theory. This is where the owners fail to operate the LLC as an independent business properly and have their status and protections revoked.
To prevent this and maintain liability protection, members must operate the business as a legitimate independent entity. Mixing personal and business duties and assets or failing to maintain separate personal and business bank accounts could lead a court to declare an LLC invalid and remove its liability protections.
ZenBusiness is a financial technology company and is not a bank. Banking services provided by Thread Bank, Member FDIC.
While not an option for everyone, some business owners might consider placing personal assets such as their home, stocks, and other property into an irrevocable trust. In this type of trust, the trust owns the assets, and an independent trustee administers it on behalf of designated beneficiaries.
While this means losing control of some assets, it offers a unique level of asset protection. In most cases, these trusts are protected from creditors and can benefit beneficiaries in the future. Laws and requirements regarding trusts can vary greatly from state to state, so consult an estate planner for assistance before proceeding.
If the LLC needs a loan, especially as a new business, it’s unlikely that a bank or other lender will grant one directly. That’s why some LLC owners will make a personal guarantee to repay the loan with their personal savings or other assets. But they need to understand that, once someone makes a personal guarantee, having an LLC won’t prevent them from having to repay that loan with their personal funds.
One possible way around having to make personal guarantees is to establish a credit history for the business as soon as possible. Get a business credit card to demonstrate the LLC’s ability to pay its own bills without help from its owners. That will increase the company’s odds of getting a business loan for the LLC without having to put personal assets on the line.
Firstly, every blog needs a privacy policy. No matter where the blog is located or hosted, it needs to comply with privacy policy legalities that are in place in various states and countries around the world. After all, bloggers can’t predict where their blog’s traffic will come from.
If a blog collects personal data from its readers, it must inform readers of how this information will be used. Even if it’s just collecting readers’ email addresses to send out a newsletter, a blogger is obligated to inform them of this data collection, as well as what their intentions are with the information.
The blog should also have terms and conditions available for anyone to read. The terms and conditions don’t need to be terribly lengthy or complicated, but they should at least outline the company’s rights to terminate a reader’s use of the material, explain what the author considers to be allowable usage of their blog posts, and more.
Another issue could arise if a blog has any content that could be considered legal advice. Only attorneys are allowed to provide their clients with legal advice. Therefore, if a blog includes anything that could be construed as legal advice, it generally needs to have a standard disclaimer that says the author is not a lawyer and the content is not intended to be legal advice. A clear example of a disclaimer can be seen at the bottom of this page.
On a similar note, blogs with affiliate links should include a disclaimer that the blog receives a small payout if someone uses the link and makes a purchase. This full transparency can help protect the blog.
The operating agreement isn’t actually a legal requirement of LLC formation in most states, but it’s still a vital piece of the puzzle. An LLC operating agreement is a relatively simple document that outlines how a company will function.
This document should include the identities of the LLC’s owners, whether there’s an even or uneven ownership split among those owners, and whether the company is managed by a manager or by its owner/members. Check out the owner/members definition for more information.
In addition, the operating agreement needs to outline a procedure for how the owners will vote on important business matters, as well as an explanation of how members should make financial contributions to the LLC. The agreement should also include a description of how income will be distributed, how a member can be replaced, and how the company should be dissolved.
(Obviously, the hope is that the business will be successful enough to live on in perpetuity, but that’s unfortunately not always the case.)
It may sound like this step is only necessary for multi-member LLCs, but it’s equally important for single-member LLCs. Even if it’s just one person operating a blog, having an LLC operating agreement helps prove that the business is a separate legal entity, which is a crucial part of maintaining an LLC’s personal asset protection.
No LLC owner, including bloggers, should commingle their business and personal assets. If a business owner did this, they’d run the risk of losing their limited liability protection, which largely undermines the point of forming the LLC to begin with. Maintaining separate business and personal bank accounts is one of the key factors for maintaining an LLC’s “corporate veil,” which is the level of separation between the owner’s personal assets and those of their business blog.
If an LLC owner fails to keep their finances strictly separated, it becomes much easier for a court to say that the LLC is merely an extension of their personality and that it is not a separate entity.
Again, this could have disastrous consequences, as the owner could see their corporate veil pierced, which would mean that business creditors gain access to their personal assets.
Hiring employees is probably the last thing on a blogger’s mind, but if the business grows, it’s likely that the blogger will eventually need some sort of assistance from other professionals. When they do make these hires, they need to do it by the book.
For the vast majority of things a blogger tackles — such as web design, graphic design, writing assistance, etc. — sites like UpWork can be an awesome resource. Platforms like this can connect bloggers with freelance professionals from across the world. UpWork even allows clients to pay their freelancers through its platform, which can simplify the provision of tax forms like 1099s. For many small businesses, hiring freelancers is more manageable than hiring employees.
Unless a blogger knows that they’ll have a consistently high volume of work that makes it worth hiring someone as an employee, hiring freelancers provides them with a far superior level of flexibility, and the blogger can also save a bunch of money by not paying benefits as well.
Earlier, this article mentioned that violating copyright law is one of the biggest mistakes a blogger can make, but it bears repeating that bloggers need to understand the nuances of intellectual property laws in general. Avoiding copyright or trademark infringement should always be top of mind; any form of plagiarism could put a blogging business in some tremendously hot water from a legal standpoint.
If there’s ever any doubt about whether or not a blog post is violating IP laws, it’s better to err on the side of extreme caution.
Privacy is a surprisingly important aspect of self-protection for bloggers. This guide has already covered how to protect readers’ privacy, but what about the blogger’s privacy?
In some cases, hiring an LLC formation service can help a blogger protect their privacy, especially if the blogger hires that service to serve as their registered agent as well. The registered agent’s address is usually part of the public record, which some bloggers won’t be comfortable with. Hiring a service helps keep the blogger’s address from being listed as the registered agent, which might increase their privacy.
That said, some states require LLCs to include their ownership information on their company formation documents, which are part of the public record. In those states, hiring an LLC and registered agent service will have less of an impact on the owner’s privacy. But it still might help cut down on some junk mail.
In addition, some bloggers might consider using a domain name registration service to help protect their privacy. It’s surprising how personal info can be involved with registering a domain name, and with some services, this information is often sold to the highest bidder, resulting in a ton of spam emails and phone calls.
Despite the protection an LLC provides, it won’t protect the owner’s personal assets in all cases. The owner may be personally liable in certain situations if something occurs while running the business. For example, bloggers with an LLC could be held personally responsible for the following:
Forming an LLC is not foolproof protection from anything that happens; a blogger could still face a situation in which they’re held personally liable for something related to the business. This is where liability insurance can help mitigate potential problems.
It may seem like starting a blog is a simple pursuit that doesn’t have any legal responsibilities attached to it, but that’s not exactly the case. Bloggers should view their efforts as a business, just like any other. As such, they’ll need to carefully consider how an LLC can help protect both the blog and the blogger.
Clearly, there are several different elements at play here, and it’s not a simple cut-and-dried situation. Still, for many bloggers, an LLC can be very helpful, allowing the LLC’s corporate veil to protect the transactions monetized by the blog.
Related:
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. For specific questions about any of these topics, seek the counsel of a licensed professional.
Bloggers certainly do have the option of forming their LLC in one of these states, but for most people, it’s still better to form their LLC in their home state.
This is because if someone registers their LLC in another state, such as Delaware, Nevada, or Wyoming (which is typically done to take advantage of tax loopholes), they’ll still need to register the business as a foreign LLC in their own state. This means that a blogger would actually be operating two different LLCs, one domestic and one foreign. They’d also be required to pay two separate formation fees, get two registered agents, and keep up with two states’ worth of LLC maintenance requirements, such as annual reports. Long story short, it’s much simpler for bloggers to just form an LLC in their home state.
Not necessarily. In some cases, hiring a registered agent service (a common offering from LLC services) can keep the owner’s personal address off the public record, but this isn’t always the case. In many states, that information is still available elsewhere on the public record, but some states do allow for anonymous LLCs.
Typically, yes. This is one of the reasons why many entrepreneurs decide to use a registered agent service; a service may help keep the owner’s personal address off the public record (but not always). If nothing else, hiring a registered agent service helps prevent someone from getting notice about a lawsuit at their home address in front of their neighbors.
In most states, an LLC needs to file an annual report, which keeps the state updated regarding any noteworthy changes made to the business. In addition, some states have a franchise tax document due each year, either in addition to or instead of an annual report.
While neither of these steps is particularly complicated in most states, it is important that LLC owners keep up with all relevant maintenance requirements, because failing to do so could see the business lose its good standing with the state.
Forming an LLC creates a separate legal entity from its owners, so lawsuits against the blog business can usually only collect from the business’s assets, not the owners’. Unless the members did something criminal, negligent, or otherwise wrong, the assets of the LLC are at risk, not the members’.
The main advantage of limited liability for business owners is that it usually protects their personal assets from claims against the business.
Limited liability is a good thing for business owners. In most cases, it protects the personal assets of the business owners and employees from the debts and liabilities of the business.
In most cases, an LLC does not protect personal assets from IRS action, only certain legal actions such as lawsuits and creditor debt collection.
An LLC can protect a business owner’s personal assets, such as their money, by providing limited liability protection against lawsuits and other legal actions, like debt collections.
While it can protect personal assets in most cases, there are circumstances where owners can be personally liable in an LLC. This includes unpaid payroll taxes, as well as the owners being sued directly for wrongdoing or other negative conduct.
Start an LLC in Your State
When it comes to compliance, costs, and other factors, these are popular states for forming an LLC.
LLC Resources
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. For specific questions about any of these topics, seek the counsel of a licensed professional.
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