Do You Need an LLC for a Blog? And How to Form One

There’s a lot of CONFUSION about LLCs for blogs in the various Facebook groups I’m in and today I wanted to clarify that.

Having gone through the process of establishing an LLC for my blog, I’m here to let you know if you should do the same thing or if incorporating DOES NOT make sense for you right now.

To answer if you need an LLC for a blog or not, you have to consider if you should protect your business assets from your personal assets, if limiting liability makes sense, and if establishing an LLC is worth the financial investment. Most beginner bloggers DO NOT need an LLC until they make $1,000 per month.  

When I set up my LLC last year, it cost me over $2,000!

As a beginner blogger and freelancer, that was my income for multiple months, so I really did have to weigh the costs against the benefits.

Luckily, I have a solution for you (if it is time to form an LLC) that will cost you less than $50 plus state filing fees. It’s a company called ZenBusiness and they provide worry-free, fast LLC formation for businesses.

Back before I established an LLC, I had NO clue if incorporating was the right step.

For you to gain a better grasp for your situation, here’s what we need to discuss:

• What are LLCs? (And what do they mean for bloggers?)
• Reasons for and against forming an LLC
• How to affordably form an LLC
• FAQs about LLCs

As always, if anything is too complicated, drop a comment below and I’ll be happy to clarify.

Let’s get started!

Quick little disclaimer: I am not now, nor do I ever foresee myself becoming, a lawyer or an accountant. This article is written from the perspective of a blogger that has established an LLC and is designed to provide information, not advice. Always consult a local attorney and CPA if you think your situation warrants specialized attention. 

What are LLCs?

An LLC, also known as a Limited Liability Company, is a business structure that limits the owner’s liability.

I know you’re not supposed to define words with the word in the definition, but that’s the simplest way to define the term.

Imagine if your business was sued…

As a sole proprietor, you’re on the hook. As an LLC, your business is on the hook.

Big difference 🙂

LLCs are the middle ground between sole proprietorships/partnerships and corporations.

It’s a happy medium. I do have a single-member LLC (we’ll get to that a little later), so my income passes through to my personal taxes, but my business is its own legal entity and has its own EIN (Employer Identification Number).

As far as Uncle Sam is concerned, my business is a person and can open a bank account just like you can.

But, you’re probably wondering what all of this means for bloggers, so that’s my next point.

What Do LLCs Mean for Bloggers?

For most, becoming an LLC is about legitimizing your relationship with your blogging business. You grew it from when it was just a hobby, and now it’s a thriving business.

That’s something worth protecting, even if you’ll never get sued in your life. 

They can also help you to file as an S-Corp later down the line, which may reduce your tax liability. This is generally advised once you’re making $100,000 per year after expenses. There’s much more compliance and costs involved, but the benefits can be great.

I’m not an S-Corp yet, but it’s on my bucket list of things to do for 2021 if 2020 treats me well 🙂

In the same way that you choose to live in a house/apartment instead of braving it on the streets, an LLC can help keep your business secure.

5 Reasons Why You Should NOT Form an LLC for Your Blog

LLCs are NOT for everyone, as I’ve mentioned before.

Here are a few reasons why:

1. You’re making less than $1,000 per month
2. You don’t plan on turning your blog into your full-time income
3. The filing fees are too expensive
4. Your business won’t exist in 5 years
5. You don’t have time to comply with state regulations

Let’s explore these a little more!

1. You’re Making Less Than $1,000 Per Month

This is the threshold I view as significant enough to begin protecting.

At $1,000, you’ve progressed from side hustle to part-time job. You have to really start saving for taxes or else you might not have enough come tax season.

If you’re not making $1,000 per month from your blog, then I would take a few steps away from legitimizing it as a business and instead channel those efforts into driving traffic and growing your business.

2. You Don’t Plan on Turning Your Blog Into Your Full-Time Income

Do you want to call yourself a full-time blogger this decade?

If your answer is no, then forming an LLC is not a wise decision.

It’s a business structure that will only help you if you have a business.

Your LLC and how you classify it will change as your business grows and scales, but that’s all irrelevant if you’re not going to see this venture through to make it a primary income driver.

3. The Filing Fees Are Too Expensive

This is kind of just expanding upon the point above.

It may cost $100+ to file an LLC. Then, the legal fees and business registration fees.

It all adds up.

If you can’t afford to form an LLC, then you’re not ready.

4. Your Business Won’t Exist in 5 Years

Let me put on my career counselor cap for a second…

What are your plans for the next 5 years?

Do you foresee still running your blog and making an income from it?

If not, then don’t file for an LLC. Otherwise, you’ll have spent money that could have better gone elsewhere.

BUT…

It’s okay for your business to modify its purpose over the next 5 years. You can always file for a DBA (Doing Business As) with your state to encompass multiple business ideas or projects. 

We’ll go over this in more detail later.

5. You Don’t Have Time to Comply With State Regulations

Annually, there is a report that has to be filed with your state.

It also costs money in some states — surprised?

Mine is due by the end of January every year.

Your state may also have additional regulations, so check with them. They should also be half decent at notifying you about these things in advance.

I always find calendar notifications helpful.

But, if the thought of doing anything legal scares you and you can’t afford an attorney, then perhaps forming an LLC is not for you.

5 Reasons Why You Should Form an LLC for Your Blog

Okay, so you’ve read why you shouldn’t form an LLC. If you read them and thought they didn’t pertain to you, then chances are, forming an LLC is probably a good bet (otherwise, you wouldn’t still be reading the article…).

Here are a few reasons why you should:

1. You want to legally separate your business assets from your personal assets
2. You may want to form an S-Corp down the line
3. There is a reduced risk of audit for LLCs vs. sole proprietors
4. Forming an LLC legitimizes the blog for you
5. Flexibility through taxation

Let’s explore these a little more!

1. You Want to Legally Separate Your Business Assets From Your Personal Assets

Even single-member LLCs (those with just one member — you!) benefit from having a separation of assets.

Your business may:

• Own your trademark
• Sell eCourses/eBooks
• Have an office space

As a person, you may:

• Own a house
• Own a car
• Have other high-value assets

These are all assets that you may want to separate. Otherwise, you’re on the hook if you get sued.

Imagine having to sell your house to pay for legal fees.

I’m not saying that will happen and I don’t say it as a scare tactic, but you’ll be more at peace with your business declaring bankruptcy because it can’t keep up with the expenses than if you have to go through the trauma of doing it for yourself. 

You can always start another business.

Much harder to start another life.

2. You May Want to Form an S-Corp Down The Line

S-Corps are a magical business entity.

The main appeal to them is that you can claim your owner’s draw (also known as your salary) as an operating expense, which reduces your overall taxable income.

Did I lose you?

Translation: S-Corporations help you owe less in taxes (with stipulations and regulations).

While an LLC is not automatically an S-Corp, you can elect to file as an S-Corp with your LLC, regardless if it’s a single-member or multiple-member LLC.

That’s a conversation to be had with your CPA as there’s additional compliance and fees, but it’s not a good fit for most until you have $100,000 after expenses for the year from your business.

But, forming an LLC is the next step in becoming an S-Corp.

3. There is a Reduced Risk of Audit for LLCs vs. Sole Proprietors

The odds of being audited by the IRS are on the lower side, but it can certainly happen for bloggers, as they may go from making not a lot of money to tens of thousands within a year.

Behavior like that may be suspicious as they want to make sure you pay all the taxes you need to. 

That is…

If you’re a sole proprietor.

If you’re a business, it’s expected for your income to grow and it would be suspicious if it significantly dropped.

The IRS publishes statistics on the odds of being audited (meaning, the percentage of those who have to the total number of filers) and incorporating has been shown to result in less of a chance of being audited to less than 1%.

While it’s not a guarantee and you should always be prepared for tax season and have your ducks in a row, forming an LLC can help with avoiding the dreaded IRS audit.

4. Forming an LLC Legitimizes the Blog For You

I’m a big proponent of having a solid business mindset.

Forming an LLC does that for you!

It legitimizes the business in your mind and makes you more invested to see it successful. It has for me!

It’s also pretty cool to say that you formally own a business and I’ve used it as bragging points before. I even won a national prize for my business which I wouldn’t have been able to do if I wasn’t formally incorporated.

If you’re someone that wants your business to be official, then forming an LLC is a great next step.

5. Flexibility With Taxation

These business entities are flow-through (pass-through) entities:

• Sole proprietorships
• Partnerships
• Single- and multiple-member LLCs

S-Corps are also pass-through entities, but remember, they’re not a business structure. They’re an election with the IRS.

A pass-through entity is where instead of the business reporting income, you do so on your personal tax return. This is Schedule C or Form 1040 for the IRS.

If you were to file as a C-Corporation, which you may want to do down the line, then you would be doubly taxed on the net income from the business and your personal salary.

And, there is now a qualified business deduction for pass-through entities that will reduce your taxable income by 20% if it meets certain conditions. Ask your CPA if you’re qualified.

I know I am 🙂

How to Affordably Form an LLC to Protect Your Blog

Yay!

You’ve decided that an LLC is the right business structure and I’m here to support your decision.

Here are a couple of things you should know:

• The steps to forming an LLC for your blog
• Who should form the LLC for your blog

Let’s go over these briefly!

The Steps to Forming an LLC for Your Blog

The steps to forming an LLC are rather simple in theory!

Here they are:

1. Choose a name for your LLC
2. Check the state’s registrar and the USPTO’s trademark registrar and make sure it’s not taken
3. File your articles of organization
4. Pay your fees for filing
5. Write an operating agreement (or buy an affordable one)
6. Obtain any additional licenses you need

You should also get a new EIN (Employer Identification Number) for the business. This is a completely FREE, simple process you can do here.

Whenever you change business structures, you need a new EIN. You can then use that EIN to open bank accounts for your LLC.

You may also need to register your business or obtain a license. Consult with your state to see what you need to do as all states are different.

Who Should Form the LLC for Your Blog

There are a few options here:

1. Yourself
2. A lawyer
3. A registered agent

The lawyer becomes a registered agent in the process, but you can always remove them if needed.

If you don’t want to do it (and, I certainly did NOT), then you’ll want to go with a lawyer or a registered agent.

My lawyer charged around $250 to $350 per hour if I’m not mistaken and that’s if you’re dealing with a junior attorney and not a senior one.

Certainly not affordable for most considering it can take 5-10 hours for the full process depending on whether you need DBAs or not.

If I were forming an LLC again, I’d work with a company called ZenBusiness.

They’re a company that works with small businesses all the time and they’re affordable and responsive.

You can start with their Starter Plan, which is only $49 per year plus your state filing fees.

For that, you get:

• Standard filing service
• Registered agent
• Operating agreement

That’s a pretty good deal!

They do say that this plan renews with the registered agent service at $119 per year in small print, but as long as you make yourself also a registered agent, then you won’t need to renew their services for this. 

After that, you’d have an LLC!

As I said before, do check to see if you need a registration or license beyond forming the LLC with your state. And, if you need a DBA, that’s separate and we’ll discuss that with the FAQs.

You can sign up for the ZenBusiness Starter Plan at only $49 per year here.

FAQs About LLCs

Here are some questions you may already have about getting an LLC for your blog:

1. What would I get sued over as a blogger?
2. Do I need a DBA?
3. How long do LLCs last?
4. Do you need an LLC to be considered a business?
5. What is a pass-through entity?
6. Do I get tax breaks or deductions by filing as an LLC?
7. Do I get an EIN when I form an LLC?
8. Can I use an LLC to open a business banking account?
9. Do you need an LLC to have a website?
10. Do I need an LLC to be a consultant?
11. If I don’t need an LLC just yet, do I need a DBA if my business name and personal name are different?

Let’s answer these!

1. What Would I Get Sued Over as a Blogger?

I will say…

The legal world is catching up to online businesses and internet marketing, so you could be sued over things such as:

• GDPR (General Data Protection Regulation) and CCPA (California Consumer Privacy Act): How we treat our users’ data
• Copyright infringement: From some suspect stock photos or a round-up gone wrong
• IP (Intellectual Property) infringement: if you violate a trademark or patent when naming or designing your products
• ADA (American Disabilities Act) Compliance: If your eCommerce website or blog is not accessible for the disabled
• Breach of contract: When sponsored work with a brand goes off the track
• False claims: If you don’t have your disclaimers well articulated
• Unpaid affiliate payments: System tracking error leads to a claim about missing payments

This is all unlikely as of right now, but it certainly could happen in the future.

But, LLCs help to mitigate the damages. 

2. Do I Need a DBA?

Well, that depends.

What do you want to name your LLC?

If you want to name your LLC something other than your blog name, then you will need a DBA. 

For example, my business’ name is Drew DuBoff because that’s my domain name. Since I wanted to name my LLC It’s Been A Pleasure, LLC, I needed a DBA.

So, now my legal documents read It’s Been A Pleasure, LLC d/b/a Drew DuBoff.

You can have multiple DBAs under one LLC. 

Part of my fees with the attorney were for filing multiple DBAs.

If you have products not associated with your site, you likely need a DBA.

3. How Long Do LLCs Last?

Unless you specify how long the LLC will last when filing, they will exist perpetually, or not expire.

You do have to file an annual report, though, and inactive businesses may lose their formation status.

Of course, this may be state-specific, so please check with your state.

And, while LLCs may not expire, DBAs do have a finite life, so you will have to renew them. In my state, that’s every 5 years.

So, there is upkeep for an LLC, even if you do not have to reform it each year.

4. Do You Need an LLC to Be Considered a Business?

No!

You can register your blog as a sole proprietorship with your state and be a business. I didn’t even do this, though, until I formed an LLC because it was just a side hustle.

An LLC is a form of business structure and at least in my state, I had to fill out a business registration form in addition to that to register the LLC as a business.

Forming an LLC is more than just being considered a business.

5. What is a Pass-Through Entity?

These business entities are flow-through (pass-through) entities:

• Sole proprietorships
• Partnerships
• Single- and multiple-member LLCs

S-Corps are also pass-through entities, but remember, they’re not a business structure. They’re an election with the IRS.

A pass-through entity is where instead of the business reporting income, you do so on your personal tax return. This is Schedule C or Form 1040 for the IRS.

6. Do I Get Tax Breaks or Deductions by Filing as an LLC?

No, not explicitly.

That’s mainly when you elect to file as an S-Corporation.

But, there is now a qualified business deduction for pass-through entities that will reduce your taxable income by 20% if it meets certain conditions. Ask your CPA if you’re qualified.

I know I am 🙂

And, as I explained earlier, LLCs are pass-through or flow-through entities.

7. Do I Get an EIN When I Form an LLC?

No, you do not.

You can sign up for a federal EIN here.

If you sign up with the popular Pro Plan that ZenBusiness offers, then you’ll get an EIN included with the service.

Otherwise, you’re on your own.

When I formed my LLC, part of the fees from the attorney were getting an EIN.

8. Can I Use an LLC to Open a Business Banking Account?

That depends on who you’re using for business banking.

At the bank I used, I needed an EIN number to open a business bank account.

So, I had to close out the bank account associated with my sole proprietorship’s EIN when I formed the LLC and opened a new bank account with the LLC’s EIN number.

9. Do You Need an LLC to Have a Website?

No, you do not.

Anyone can own a domain name for a website and registering a domain name does not mean you own the rights to that name for business purposes.

I would, however, recommend an EIN at the beginning of your days of owning a website just so that you don’t have to give out your Social Security Number on tax forms.

10. Do I Need an LLC to Be a Consultant?

No, you do not.

What has been discussed in this article regarding bloggers also pertains to consultants and other entrepreneurs.

To answer if you need an LLC for a blog or not, you have to consider if you should protect your business assets from your personal assets, if limiting liability makes sense, and if establishing an LLC is worth the financial investment. Most beginner bloggers DO NOT need an LLC until they make $1,000 per month.  

I recommend rereading this article because service-based businesses function exactly the same as bloggers in this context.

11. If I Don’t Need an LLC Just Yet, Do I Still Need a DBA If My Business Name and Personal Name Are Different?

Regarding this question, there’s kind of a theoretical, a practical, and then a realistic answer I’m going to provide.

And, remember I’m not a lawyer, so take it with a grain of salt. I say this as more of a blogging mentor than a lawyer.

• Theoretical Answer: Yes, whenever you are operating a business (Joe Schmo Consulting) that’s different from your personal name (Joe Schmo), you need a DBA.
• Practical Answer: Some banks won’t allow entrepreneurs to open up a business banking account if they are a sole proprietor without a DBA as that shows that they’ve filed with the state…but, I was able to get mine as a sole proprietor with just an EIN number (and, note that in my case, my business and personal names were the same).
• Realistic Answer: I don’t foresee anything happening to you if you don’t file for a DBA. Most bloggers I know who start out don’t immediately file for a DBA with their state. They last a few years and you might have to file an additional one if you form an LLC (more filing fees). I think it becomes more of an issue for in-person businesses, such as if you had a landscaping business or a consulting business that was named differently.

DBAs aren’t reflective with how much much money you make — they *should* be with you every step of the way, but I personally would not do anything about it until I formed an LLC.

I’ll note that when I decided on the names for my new niche sites, I did immediately apply for a DBA for each as I knew that they would each be housed under my LLC, so I think that’s a different position.

Conclusion

Does your brain hurt yet?

I know discussing legal matters can be confusing, but I hope I simplified the concepts in this article to where you can make a decision for your situation.

You can always hop in my Facebook group and ask away. I’ve got a few lawyers in there that are better experts at it than I am.

To recap, we discussed these main points:

• What are LLCs? (And what do they mean for bloggers?)
• Reasons for and against forming an LLC
• How to affordably form an LLC
• FAQs about LLCs

Do you have any outstanding questions?

If so, drop them in the comments below and I would be happy to answer them.

And, if you’ve decided that you DO need an LLC for your blog, then my recommendation is to file with ZenBusiness. They’re a reputable company and their fee is structure is much more affordable than the $2,000 I paid.

Cheers to your business success!