Starting an LLC for YouTube Channels
Starting your YouTube channel is a fun outlet for your creativity and connecting with others. However, what most of us don’t think about in the beginning is how YouTube is an amazing business prospect as well. You can make your YouTube channel into a successful, thriving business. And like any other business or company, you should also create an LLC for your YouTube channel. Forming an LLC is the best option for all types of businesses and companies looking for asset protection.
Don’t know what an LLC is, what are its benefits, and where to begin from? This comprehensive guide will show you all you need to start an LLC for YouTube channels.
Form a YouTube LLC the RIGHT way
Want to form an LLC for your YouTube channel in the best possible way? With the help of a professional, high-quality LLC, you can ensure that all your legal paperwork is taken care of in an expert and efficient way. Instead of getting lost down the rabbit hole of the internet, we have selected the two top LLC incorporation companies that will take care of your LLC formation needs.
- Signup for ZenBusiness If you want an LLC service that will give the best value for your money, then you should go for ZenBusiness. Not only do they have comparatively affordable rates, but they also provide all the important features that are necessary to start your YouTube LLC.
- Signup for IncFile If you are on a very tight budget – let’s face it, most of us new business owners are – then, you should select IncFile. They have an amazing starter package that will form your LLC free of cost and will offer you alluring features such as registered agent service as well.
What is an LLC?
Let’s start from the very beginning and answer your basic question: What is an LLC? An LLC – limited liability company – is a formal, official, legal entity and business structure in the US under which the business owners are not liable personally for the company’s debt or potential legal issues and liabilities.
LLCs combine the features of a corporation with that of a sole proprietorship or a partnership. The rules and regulations surrounding the LLCs vary from one state to another but the underlying principle is the same. An LLC is very easy to set up and offers a lot of protection and flexibility.
In a Limited Liability Company, the members of the owners are not personally accountable for the fiscal status of the company. What this means is that if you are sued in the future while doing business and you have an LLC, then your personal assets and savings will not be at risk!
Importance of an LLC for a YouTuber
One of the foremost reasons for a YouTuber to form an LLC is to attain protection for their personal assets which this amazing business structure provides. Whether you are the owner of a small, simple channel where you post videos occasionally or if you have started your YouTube channel to enhance the presence of your website business, you will definitely need LLC protections.
How? Well, even if you have a basic YouTube channel, there is a risk of you violating (unknowingly) copyright laws or risk of your committing slander or libel. In case you are surrounded by a defamation lawsuit or in the middle of a copyright claim, a general partnership or proprietorship will not help you protect your personal assets.
However, if you create an LLC for your new YouTube channel now, and keep operating your LLC in a compliant fashion, then any lawsuit in the future will only have a potential effect on your business assets. Moreover, the taxation options available with an LLC are another advantage, especially if there are multiple owners of the YouTube channel.
Another advantage of creating an LLC for your YouTube channel is that it adds credibility to your channel and business. Usually, if you own a YouTube channel and don’t have an LLC, then you will not have exclusive rights to your business name.
With an LLC, not only will you gain exclusive rights to your name, no other YouTuber can use your name as their own. Moreover, if there is an “LLC” attached to your YouTube channel, not only will your audience be impressed but the sponsors will also respect the level of professionalism you display by forming an LLC. Your clients will be way more comfortable buying things from a registered entity and business rather than an unknown individual!
Starting an LLC for a YouTube channel
Now that you know what an LLC is and why it is important for a YouTuber to form an LLC, let’s move on towards the most important part – How to start an LLC for a YouTuber! The specific rules and requirements, such as how much it will cost for you to file your articles of organization, or when you will have to file your business reports, depends on the state in which you form your LLC.
However, the formation process of an LLC has common and universal basic steps that are the same no matter which your LLC formation state is.
The basic steps for forming an LLC are:
- Choosing a name
- Selecting a Registered Agent
- Filing the Articles of Organization
- EIN Acquisition
- Creating a Business Operating Agreement
- Getting hold of the required licenses and permits
- Creating a financial infrastructure for your LLC
Let’s delve into the detail of each step so that you will have no ambiguity when you form your LLC.
Choosing a name for your LLC
The name of your LLC is your brand, your identity, and the first impression that your customers and potential sponsors will get about your YouTube channel. The name will go on advertisements, your business cards, and especially on top of your YouTube page. It is needless to say that the name of your YouTube channel, and thereby your LLC, is of the foremost importance.
The guidelines for LLC names vary from state to state, however, there are some basic rules that are common. Firstly, your LLC name has to be unique and original. If there is another business entity operating under the same name in your state of formation, you cannot choose that name.
Moreover, every state prohibits you from using terms that will imply an affiliation with the government such as the state department, FBI, etc. Furthermore, profane and vulgar terms are not allowed as well. You will also be required to add some version of the term “LLC” to your business name as well.
Once you have selected the LLC name for your YouTube channel, you need to go through the guidelines of your state and ensure that you fulfill all the criteria. Most of the state websites have the option of free business name availability search and a few can conduct a name search for you if you send a request via mail.
Finalized a name? Good for you! However, until your LLC’s name is approved by your state, it is still up for grabs. Disappointed? Don’t be! For this very reason, states give you permission to reserve your LLC’s name before you start your formation process at a very nominal fee!
Let’s take a look at what you need to do next to keep your LLC formation momentum going!
Selecting a registered agent
The next thing that needs to be on your list is selecting a reputable, professional registered agent. Don’t know what a registered agent is? Let us tell you! Your state government needs a credible and reliable way of contacting you to send all the legal documents in a timely manner.
The person who accepts that mail from the government on your behalf is a registered agent. Moreover, if any other company or individual needs to contact you formally, they will send the documentation to your registered agent, who will then forward the mail to you.
With the help of a registered agent, you can remain sure that any legal and important documentation from the state doesn’t get lost in the mail, thus, protecting you from lots of future issues. Moreover, the registered agent needs to be present during regular business hours.
In case you choose to become your own registered agent, you won’t be able to take a day off since you are legally obligated to be present during working hours. Furthermore, your address will become part of the public records, so you can say goodbye to privacy and hello to loads of junk mail!
It is better to hire a professional registered agent to take care of this for you. Not only will you have a load of your shoulders, but you can also rest assured that you will receive all the important documents in a timely manner.
Choosing a professional registered agent can be a difficult task. However, don’t worry – we are here for you.
Professional LLC formation services such as Northwest Registered Agent are well-known for their quality customer services who are there to take care of all your needs. Moreover, many incorporation services such as IncFile and ZenBusiness offer you a free year of registered agent services when you choose their affordable LLC formation packages.
Filing the Articles of Organization
You have done the lion’s share of work by now. All you need to do now is to officially form your LLC! After selecting the LLC name and a professional registered agent, you have to file the Articles of Organization.
These documents are monumental to your LLC incorporation process. However, they are very simple documents and need only basic information regarding you and your business. Even though the appearance of the form, the personal details asked, and the cost of filing differ from state to state, you will usually be asked the following information in the Articles of Organization.
- Name of your LLC
- Address of your LLC
- Name of your registered agent
- Address of your registered agent
- Nature of the business you will be forming
- Names of the members and the owner(s) of the LLC
Every state has an official template for the Articles of Organization that you can find on their website and fill in. However, if you want to add more information, you can create the paperwork yourself as well.
In cases like this, a professional LLC formation service would be a better and safe choice as they would make sure you fulfill all the official requirements in the customized paperwork. Some states offer online filing options while others accept articles of organization via standard mail only.
It is important that you know the requirements of your state of formation, otherwise, there is always the risk of your paperwork being rejected. Therefore, we recommend you use the services of IncFile or ZenBusiness as there will be no danger of you filing the wrong paperwork if you give them this responsibility!
We all have to pay taxes, and yes, a YouTuber needs to pay taxes as well! Just like individuals have social security numbers to pay personal taxes, LLCs have federal tax IDs called EINs – Employer Identification Number.
Most businesses require an EIN as a legal obligation. Getting an EIN will allow you to open your business bank account, hire employees for your company, file your taxes, and a lot more. Even if you are running your YouTube channel, all on your own, it will be a good idea to get an EIN to separate your personal and professional finances.
You can apply for an EIN online on the IRS website or by sending in the physical EIN acquisition form via mail. The best part about getting an EIN number is that the filing process is very easy and if you do it on your own, it will not cost you anything at all.
However, we recommend that you don’t take the DIY route because there is always a chance of you missing up the legal paperwork – we all are not professional lawyers after all – and this will result in your time being wasted. And what is more important than your precious time, right?
Choose a professional LLC service provider such as ZenBusiness and you will get your EIN quickly and efficiently!
Creating a business operating agreement
With rules and structure, everything in the world falls into chaos and so would your LLC if you don’t set some ground rules for its operation. That is what business operating agreements are for. In a business operating agreement, you establish the structure of your company, outline the ownership, and write down the rules under which your company will operate.
How will you divide the profits that you make from your YouTube channel and a lot of other important things that are part of your business operating agreement. An important function of the operating agreement is to define the rights and responsibilities of all the members.
Regardless of the kind of business you will run through your YouTube channel, make sure that your business operating agreement contains the following things:
- Roles and identities of each LLC owner & member
- Rights and responsibilities of the members
- Voting power & percentage interests
- Financial plan for allocation of losses/profits
- Buying/Selling provisions of the shares of other members
- Process for dissolution of the LLC
A good LLC formation service such as ZenBusiness or IncFile usually has an operating agreement as part of their LLC incorporation packages. Moreover, you can buy the business operating template from them as well!
Getting hold of the required licenses and permits
You are almost to the end of the LLC formation process! Usually, businesses need licenses or permits to do business in a state. Are you a doctor providing online consultation through your YouTube channel? Are you a cosmetologist and have an e-commerce website linked with your channel? Well, it is very likely that you will need a license to practice your trade.
The type of license/permit that you need depends on the location of your business as well as the kind of business you are conducting. States and counties have their own distinct licensure requirements – therefore, you need to look at the requirements in your state of formation and your county.
The first stop should be the website of your state and then your local town hall to learn more. Once you know which licenses and permits you need, follow the proper procedure to get them timely. If you get the services of a professional LLC formation service, you will get a consultation regarding the licensure requirements, which is a huge plus!
Starting an LLC for YouTube channel: Conclusion
To make sure that your YouTube business has a legitimate registered name that no one can claim, keep your personal assets separate from your business assets in case you run into legal trouble down the road, it is important that you should form an LLC for your YouTube channel.
However, forming an LLC takes precise and careful knowledge and it is likely that without any expert help and guidance, you will get lost down the rabbit hole of legal jargon. In case you don’t know how to go about forming an LLC, don’t worry! There are high-quality LLC-forming companies out there that will take care of all your needs!
- ZenBusiness is a great LLC incorporation service that offers the best overall value for your money. If you want to get feature-full bundles at affordable rates, head over to ZenBusiness and use their expert services!
- IncFile is the best option for those YouTubers who are on a tight budget yet want to gain all the benefits having an LLC will offer them! With excellent customer reviews and feedback, the free silver package from IncFile is perfect for you!
Why should I start an LLC as a YouTuber?
The best reason to form an LLC as a YouTuber is to get access to the financial protection that having an LLC gives an individual. Your personal assets will be separated from your professional assets in case you find yourself in the middle of a lawsuit.
How can a YouTube business make money?
You can monetize your videos by gaining more viewers, getting sponsor ads, and a lot more. Moreover, you can link your YouTube channel with your e-commerce website and drive traffic to your website which will end up making sales for you!
How can I change my customers on YouTube?
As a YouTube business owner, you will be paid money for the views as well as the clicks on the sponsor’s ads. You don’t charge your clients per se. However, if you run an affiliate website connected with your YouTube channel, you can charge your customers as much as you want!
Can I form an LLC on my own?
Yes, you can definitely form an LLC on your own. However, as a new YouTube channel owner, it is more important that you give all your time and energy to creating profitable content and gaining a valuable audience.
Is it necessary for a YouTube channel to have several members before they can form an LLC?
No, you can be a one-man team to form an LLC. Even if you add more members to your YouTube channel later, you contact a professional LLC formation service and they will guide you on changes that need to be made in your operating agreement to keep running your LLC successfully!