Start an LLC for Onlyfans (Free Guide)
The trick to a successful OnlyFans venture is a business-savvy mindset and knowing how to structure your business. A Limited Liability Company (LLC) is a powerful tool for protecting your content, your income, and the long-term growth of your OnlyFans business.
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If you’re an OnlyFans content creator, you probably spend countless hours honing your craft, engaging with fans, and building a brand. You might also want to look into protecting yourself and your business, and one of the best ways to do this is to form an LLC.
By default, when you first start working as an OnlyFans creator, you are acting as a sole proprietor. A sole proprietor is a business owner who operates as an individual. There is no separate legal entity, and it assumes all the business’s responsibilities, liabilities, and profits. This means if there are any business disputes, you are liable and could be sued as an individual.
Why an LLC for OnlyFans makes sense
Control and liability protection
Your most valuable asset is your content. It is important to maintain full control over your intellectual property and ensure you are benefitting from your creativity in the long run.
- An LLC provides a legal framework for protecting the intellectual property of your content should anyone attempt to download and resell it without your permission.
- Unlike a sole proprietorship, an LLC offers legal protection for your assets (such as your house or car) in the event of a dispute over your content.
- A dispute could be a subscriber demanding a refund, claiming that the content they received did not meet their expectations. If the disagreement leads to the subscriber taking legal action, they would have to sue the LLC rather than the creator individually.
Privacy
OnlyFans can be a platform where creators prefer to stay anonymous. A separation between their personal lives and their online personas needs to be respected.
- An LLC allows you to conduct business under a separate legal entity, adding a layer of privacy and protection. In contrast, sole proprietors must operate under their own name.
- Some states, like Wyoming, allow you to create a completely anonymous single-member LLC, which isn’t common in every state.
- Having an LLC can also make it easier to open a business bank account. This is essential for keeping your personal and business finances separate and can add another lay of privacy to your business.
How to start an LLC for OnlyFans
1
Choose a business name
If your aim of forming an LLC is to create a division between your online persona and personal life, choose a name that is distinctly different from your OnlyFans account name. Also, avoid using your personal name or anything that might indicate that you own the business.
Normally, an LLC name should be distinctive, memorable, and catchy, but here, you may opt for the most mundane name to not attract any unwanted attention.
Once you have decided on your name, check that the name matches the naming requirements in your state. Names usually need the phrase “Limited Liability Company” or one of its definers. Confirm that the name is available with the Secretary of State in your state, as most LLC names need to be unique.
2
Choose a registered agent
A registered agent is the main point of contact between your LLC and the state and is responsible for receiving legal documents on behalf of your business.
If you are forming your business in the state where you live, you have the option to serve as your own registered agent. However, if you’re aiming for more privacy, it is advisable to choose a third-party registered agent service. Using a third party means that your name and personal information will not be listed on public records.
3
File formation documents
Depending on where you decide to form, you will have to file Articles of Organization or a Certificate of Formation. This typically requires your business name, business address, registered agent details, and LLC owners.
If you are seeking a higher level of privacy, it is important to use a business address or the address of your registered agent rather than your home address.
If you decide to form in a state other than your home state, it is imperative to find a trusted registered agent service, as they will more than likely serve as your business address.
Choosing a state for your OnlyFans LLC
OnlyFans businesses are generally conducted entirely online. One of the benefits of being a completely remote business is choosing where you form your LLC. Each state has slight privacy protections, tax benefits, and formation processes, and forming in a state that benefits you can set your business up for success from day one.
Look into states like Wyoming and Delaware that offer the strictest privacy levels around. Wyoming has additional tax benefits that have meant, in recent years, a large number of entirely remote companies have incorporated in the state besides having no ties to it.
4
Draft an operating agreement
You may think this step is unnecessary, especially if there is only one member of your LLC. However, it may protect you if disputes arise. An operating agreement should address these key points:
- Ownership of content (especially as collaborations between creators become more common)
- Revenue distribution
- Dispute resolution and subscriber issues
5
Obtain an Employer Identification Number (EIN)
An EIN is like a Social Security Number (SSN) for your LLC. It identifies your LLC for the Internal Revenue Service (IRS). It is required to open business bank accounts, file taxes, and hire employees. For more information on how to obtain an EIN, read our guide.
Having an EIN adds an extra layer of security and privacy, as you will not have to use your SSN on business documents.
If you are based outside the U.S. and are planning on incorporating your OnlyFans LLC remotely, you will first need to get an Individual Taxation Identification Number (ITIN) before you get your EIN. You can apply for an ITIN by completing form W-7.
6
Open a business bank account
Keeping your personal and business finances separate is crucial for any LLC. Opening a business bank account under your LLC name can solidify this separation, making it easier to track business income and expenses.
When it comes to choosing a bank, research them properly and find one that is friendly and understanding to adult industry businesses. Read our guide for more information on forming a business bank account and which banks may best serve you.
7
File taxes
An LLC is automatically considered a “pass-through” entity, meaning that the business’s profits and losses “pass-through” to the owners and are reported on their personal tax returns. This helps avoid a situation where an individual would be double-taxed.
As an OnlyFans creator, you can deduct business expenses, such as internet, phone bills, cameras, and microphones, from your personal income tax return. These tax write-offs will be reported on your Schedule C when you include your gross income to work out your overall net income for the year.
FAQs
Can I form an LLC for my OnlyFans business if I live outside the United States?
Yes, you can form a U.S. LLC even if you’re based outside the country. This can provide you with benefits such as strong intellectual property protection and access to the U.S. market.
Do I need to use my real name when forming an LLC for my OnlyFans business?
No, you can choose a business name that is different from your personal name or OnlyFans account name. This can help maintain privacy and separate your online persona from your personal life.
Is it important to have an operating agreement for a single-member OnlyFans LLC?
While not legally required, having an operating agreement is crucial for OnlyFans creators. It should address key points such as content ownership, revenue distribution, and dispute resolution.
How do I obtain an EIN for my OnlyFans LLC?
You can obtain an EIN for free from the IRS website. If you’re based outside the U.S., you’ll first need to apply for an Individual Taxpayer Identification Number (ITIN) before obtaining an EIN.
Can I open a business bank account for my OnlyFans LLC?
Yes, opening a business bank account under your LLC name is crucial for keeping your personal and business finances separate. Look for a bank that is friendly and understanding towards adult industry businesses.
How are OnlyFans LLC profits taxed?
An LLC is considered a “pass-through” entity, meaning that the business’s profits and losses are reported on the owners’ personal tax returns. This helps avoid double taxation.
What forms do I need to file for my OnlyFans LLC taxes?
To report your OnlyFans LLC income, you’ll need to complete tax forms Schedule C (Form 1040) and Schedule SE (Form 1040) to pay self-employment tax.
Can forming an LLC protect my personal assets as an OnlyFans creator?
Yes, an LLC provides a legal framework that separates your personal assets from your business. This means that if there is a legal dispute over your content, your personal assets will be protected.
How can an LLC help with content ownership as an OnlyFans creator?
An LLC establishes a legal entity that owns the content created under its name. This can help protect your intellectual property and ensure that you maintain control over your content.
Are there any specific states that are better for forming an OnlyFans LLC?
States like Wyoming and Delaware offer strict privacy levels and have additional tax benefits that make them attractive for online businesses. However, it’s essential to research and choose the state that best suits your specific needs.
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