Should I Start an LLC for My Podcast?
Starting an LLC for your podcasting business can help protect your assets, get tax benefits, and increase your podcast’s credibility. Here’s what you should know.
What is an LLC?
A limited liability company (LLC) is a business structure that protects its owners’ personal assets if the business is sued or defaults on a debt, while also providing some tax benefits. An LLC is more flexible and easier to form and maintain than a corporation, so it can be a beneficial business structure for podcasters.
Do I need an LLC for my podcast?
That depends. If your podcast is making a profit, and you’re concerned about protecting your personal property if your podcast gets sued, it may be a good idea to form an LLC for your podcast. Here are a few benefits of starting an LLC as a podcaster:
Having an LLC protects your assets
The main benefit of having an LLC is liability protection. Having limited liability protection means that if the business gets sued, only the business itself is liable for damages and not the owners. For example, if you unknowingly play copyrighted music on your podcast and the record label sues you, having limited liability protection means that you can only be sued for the business’s assets (and not your personal savings, car, or house).
However, it is important to know that liability protection is not bullet-proof, and you will need to maintain your liability protection by keeping your business and personal finances separate and following the rules in your operating agreement.
An LLC makes it easier to establish ownership rights
If your podcast is run by more than one person, having an LLC allows you to legally establish who owns what, what members are allowed to do with their intellectual property, and what percentage of the profits each member is entitled to. For example, if your audio producer leaves the podcast, is she allowed to use the intro music she wrote for your podcast on another project? When you have an LLC, you can prepare for situations like this by creating an LLC operating agreement which documents your podcasting business’s internal policies.
Structuring your podcasting business as an LLC enhances your credibility
Being able to put the letters “LLC” after your podcast name can show advertising sponsors that your podcast is an established business they can feel confident giving their money to. Having an LLC also gives you exclusive rights to your business name, so you won’t have to worry about another podcast stealing your name.
How do I form an LLC as a podcaster?
The process to form an LLC varies by state, but in general terms, these are the steps you’ll need to take to form an LLC:
- Choose a business name and make sure it’s available in your state
- Appoint a registered agent
- File formation documents (called LLC Articles of Organization in most states) and pay a fee to the state
- Obtain an Employer Identification Number (EIN) from the IRS
- Create an LLC operating agreement
- Open a business bank account
- Be aware of state requirements for taxes, licenses, and annual reports/fees
Read our complete guide on How to Start an LLC.
