So you started your YouTube channel with passion and high hopes and now your YouTube channel is running successfully.
You may have wondered about forming an LLC as your YouTube channel is generating healthy income but you are confused about forming an LLC. LLC has been the finest solution for new business owners and has provided them with a lot of benefits.
You are probably wondering what an LLC is? Thinking how will it benefit your YouTube career? Don’t worry; in this guide you will get all your answers.
So, what is an LLC?
LLC stands for Limited Liability Company. This US business structure protects the personal assets of an owner from lawsuits and debts of its company. This means that if your business is sued or has to pay debts, your own personal assets won’t be harmed.
In an LLC there can be one or multiple owners of the company and these owners are referred as LLC members. There are many other business structures but LLC might be the best for Youtubers as it is much cheaper and is quite easily formed.
You can also read our full comprehensive guide about LLC.
Significance of an LLC for a YouTuber
Now you have got the general idea of an LLC so we will move onto the next question. Why an LLC for a YouTube channel? LLC has provided its benefits to every new business owner and choosing an LLC for your channel is the right decision.
The reason why I say that is because you can protect your own assets by forming an LLC. This applies for every YouTuber, whether him or her is creating a lot of content or just posting videos occasionally.
Another big advantage is that you get more tax options. You do not get these advantages in sole proprietorships or corporations. By default your LLC structure is like a sole proprietorship where your profits and losses are not filed with your business but are taxed through your personal assets.
Sole proprietorship does not provide limited liability protection which is the reason why LLC is better than corporations and sole proprietorships. Another great benefit you get by creating an LLC for your YouTube channel is that you increase your business’s credibility.
LLC is a renowned business structure and by adding LLC to your YouTube channel, you create a solid impact on your customer’s mind.
You also get rights to your channel’s name which means that any YouTuber cannot have your name otherwise he will be charged with copyright laws. You create a great impact on sponsors by adding LLCs in your business, your business gets more professional in the eyes of customers.
How to form an LLC for YouTube?
Now you know why LLC is significant for YouTubers and all its benefits. Let’s move forward to the process of forming an LLC. First of all remember that every state has its own laws in forming an LLC so you need to check your state’s laws.
I’ll be listing down some major steps to start your LLC but if you want the detailed guideline on LLC, you can click here.
- Select your state
- Pick a name for your LLC
- Hire an LLC Registered Agent
- Create an LLC Operating Agreement
- File your Article of Organization
- Get an EIN
#1: Select your state
Choose in which state you want to start your LLC. It is wise to start your LLC where you live and will carry out your business.
#2: Pick a name for your LLC
You need to choose your LLC name carefully. Your business name should be attractive to your customers as it will be the first thing any customer will look up to.
Check if your name is available. After picking your name you also need to check its availability in your state and if your name is not available then you need to pick another. You can check your name’s availability at many different websites.
After checking your name’s availability, you need to secure it as well. It usually takes two months to start your LLC and you do not want anyone else grabbing your name in that period.
#3: Hire an LLC registered agent
Every state demands you to have a registered agent. Your agent will deal with all your legal matters so you do not miss out anything. He will be a vital factor to your company’s success.
You can also look up to your town’s top registered agent service provider if hiring an agent seems complicated to you.
#4: Create an LLC operating agreement
An operating agreement will highlight your company’s standard and rules. If your business includes more than one member than creating an operating agreement is vital.
It showcases the responsibilities, rights, voting power of every member. It also tells how your business’s revenue will be distributed among members which avoid any conflict regarding money.
Many states do not demand you to create an operating agreement but by creating an agreement you can avoid any future conflicts between your company’s members.
#5: File your article of organization
The Article of Organization or Certificate of Formation is a simple document which gives you access to officially enter LLC. This document must be filed with proper consultation and must be filed correctly.
Many others online platforms like Legalzoom offer methods to solve this process quickly.
#6: Get an EIN
EIN stands for Employer Identification Number. It is like a social security number required by your LLC for many purposes like opening a bank account, filing company taxes etc. This number allows the IRS to identify and tax businesses.
Even if you have a YouTube channel, an EIN will help you keep your personal finance away from your professional finances You can get an EIN for free if you will directly apply to the IRS.
LLC service providers
Now you have learned about the steps needed to form an LLC but if formation of your LLC seems to you as a hectic job then you should consider hiring LLC service providers.
There are many great companies that offer LLC services but I’ll be discussing a few of them. If you want to know about all the best service providers then you can read our detailed guide.
If you are looking for the complete package then ZenBusiness is the best choice. They have got everything; at just $49 their starter pack includes LLC formation, free registered agent for one year, operating agreement template and much more.
They have 4500+ reviews and mostly all of them are positive. It also offers a pro-package that has a worry-free guarantee feature. This feature provides good care to the customer’s annual report filing.
If you want to read the full review of ZenBusiness then click here.
If you are looking for a more experienced company then Northwest is a definite choice. They have been providing LLC services form 1998 and has established themselves as the best LLC service provider
Northwest has got the best customer support as their team is filled with highly professional staff. They also provide LLC registered agents free for one year.
One major downside of Northwest would be its pricing. Northwest is quite expensive as compared to others and mainly that is because of its experience in providing LLC service.
You can also read the full review of Northwest for complete guidance.
If you are looking for a service provider in which you don’t have to spend a penny, then Incfile is the best choice.
Incfile is the most affordable LLC service provider; they literally charge you $0 for their services. They have a lot of experience as well; they have started 250,000 businesses in just 16 years.
They have excellent customer feedback and have 15,000 positive reviews. Their customer service is also considered to be the best; customers receive unlimited support on email and phone calls.
If you want to read the complete guide of Incfile, then click here.
As you can tell, that LLC for YouTube business is quite vital. You get the benefit of having a legitimate business name that no one can take and you keep your personal assets separate from your business revenue. Having an LLC is highly recommended for Youtubers.