Congratulations! You are here wondering how to create an LLC for your educational podcast … that's great!
Or, perhaps you are here looking to learn how to set up a small business and form an LLC … that's also great!
This is a big step for any educator, consultant, or even podcaster. Taking the steps needed to turn your ideas (or hobby's) into an official company is pretty darn awesome.
In 2011, I created the TeacherCast Podcast and built a little website simply so I can have a place to put my audio recordings. Fast Forward a few months, and suddenly friends were telling me that I needed to step back and turn my hobby into an officially recognized business by creating an LLC for my podcast and honestly, I'm so happy that they did and that they were there to help me with this process.
Let's Create Your LLC … Today!
Today, we are going to take a look at the steps needed to create an LLC for your company. This could be a consulting business, a podcast, or even an online business of some type. The process for doing this is quite simple and the rewards to both you and your family are great.
It's important to start this post off by stating the obvious … I am NOT a lawyer and everything you are going to read through below is a mix of what I have learned over the last 8 years and several dozen websites that I have tried my best to link to and cite as best as I can.
If anything on here is grossly inaccurate, I ask you to simply send me a KIND email and help me create a post that will support my audience. If there is anything on here that is grossly inaccurate I, in no way, am stating this to be misleading. Again … I don't have a legal background.
What is an LLC?
The term LLC means Limited Liability Company.
According to Kevin Mercadante, it is:
“a business structure that provides a business with limited liability (similar to a corporation), but the structure is easier to establish and simpler to maintain. It also provides the business with pass-through treatment of income for tax purposes, similar to that of a sole proprietorship or a partnership.”
Essentially, (as I understand it), when you are a business owner the reason that you want to form an LLC for your company is to provide yourself the protection and separation of what belongs to the business, and what belongs to the individual.
However, even though there is a legal separation of business and personal assets when it comes to money, the business owner can still generate one income tax return.
For more information about the Pros & Cons of starting an LLC, please visit this article from AllBusiness.
Do I Need to Set Up An LLC for My Podcast?
There are two fantastic articles (one written by an actual lawyer) that I would like to direct your attention to.
For me, this answer is all about preparing yourself for what might be your future. If you want to someday take your podcast and turn it into a money-making adventure, then the answer “should” be YES!
What Should You Have Prepared When Setting Up An LLC?
There are a few things that you should have with you when sitting down to formally create your LLC.
- Select A State
- A Business Name
- Needs to end with “LLC”
- Must be distinguishable from other LLC's
- Trademark Free from other brands
- Not limiting in scope
- Available as a .com or other web domain
- Articles of Organization
- Filed with a state or local government agency and approved.
- Keep this short and simple
- A small fee for filing this
- A written Statement of purpose
- A Registered Agent
- A person who will represent the company as the main point of contact
- Could be the business owner or someone else
- A Method of Payment
- A Bank Account for your Business
- A Notice of Intent
- An LLC Operating Agreement
- A Legal Document stating how your LLC will operate
- Different from State to State
- An Employer Identification Number
- Also known as your EIN Number or Federal Tax Identification Number
- Obtained by the IRS
- Required if you have employees
In this article by Richard Harroch, these items are explained in greater detail and I would recommend you read through it before moving forward with the process of creating an LLC for your podcast or small business.
What is an EIN Number and Why Do You Need One?
An EIN Number, also known as your Federal Tax Identification Number is a requirement for any business who plans on someday having employees. EIN Numbers can be obtained on the IRS website.
Do I Need A Separate Bank Account?
When setting up any type of business, it is always best to have at least one, (Checking), if not two bank accounts (Checking & Savings). You also want to make sure that any money that comes in or goes out through your business passes through the Business account and not your personal account. This will not only help you with your records but be extremely important when you are working on your taxes each year.
The account should be set up in the name of the Business. Often, the bank will require additional paperwork, such as your Articles of Organization, your EIN and other background information.
How Do I Get Paid From My Business?
According to Emily Starbuck Gerson:
“As the owner of a single-member LLC, you don’t get paid a salary or wages. Instead, you pay yourself by taking money out of the LLC’s profits as needed. That’s called an owner’s draw. You can simply write yourself a check or transfer the money from your LLC’s bank account to your personal bank account. Easy as that!”
Once I Have My LLC … Am I Done?
The completion of the LLC process for your podcast or small business is not difficult, but it is only the beginning of your journey as a business owner. Each year you will have to file an annual report (look out for paperwork) that also brings an additional annual fee. Additionally, if anything changes about your company you will need to take the proper steps to keep your paperwork updated.
According to Maggie Lourdes:
“LLCs must comply with their states' requirements in order to preserve active and good standing statuses. For example, LLCs must maintain registered agents to accept service of legal documents. Failure to do so can result in the LLC reverting to inactive status. LLCs must also generally submit annual reports to maintain state certificates of good standing. Failure to meet filing deadlines can lead to an LLC being declared not in good standing, and it may eventually be classified as inactive if corrective actions are not taken.”
Additional Links and Resources Used For This Post
- What is an LLC?
- Limited Liability Company (LLC) FAQ
- Can One Person Own An LLC: Everything You Need to Know
- Should You Form An LLC For Your Small Business?
- Pros and Cons of a Limited Liability Company (LLC)
- How to Start an LLC in 7 Steps
- What are Owners Liable for in an LLC?
- Limited Liability Corporation Verses a Sole Proprietorship
- Which State To File Your LLC in?
- 10 Key Issues In Setting Up An LLC
- Articles of Organization: Staying Organized During LLC Formation
- How to Get an LLC License: Everything You Need to Know
- How To Start An LLC
- What is an Operating Agreement?
- How to Draft an LLC Operating Agreement
- What is a Registered Agent?
- How Do I Pay Myself as the Owner Of An LLC?
- Do LLC's Expire?
- LLC Fees by State
Frequently Asked Questions
Do I need an LLC in more than one state?
To be clear about this answer … I think you do. From what I'm told (by friends, not by legal) if you are going to another state where they are paying you, you need to have an LLC set up in that state. (again … each state and situation might be different)
Can having an LLC help you at the end of the year on your taxes?
Do I need an LLC if I don't plan on making “much money” from my podcast or small business?
I'm not going to say yes or no on this one … I would refer you to the top of this blog post where we talk about what an LLC is and how it helps separate your private assets from your public assets. If you are a podcaster that does a show at home then you might not need one, but if you are traveling out and recording on the road, you might want to have something in place to protect you from anything that might happen.
MAJOR LEGAL DISCLAIMER
I hope that the information presented here was useful to you. Again, I need to state that I am in no way a lawyer or legal expert and as you can see from the links above, I created this blog post after consulting with a few dozen resources. My big advice to you is to do with this someone who you know has gone through the process before, or bring in an attorney to help you make sure everything is set up properly.
Do You Have Any Questions?
To be totally honest, the process of turning TeacherCast from a “thing” into a real company wasn't that bad at all. I went to a friends house and together, we worked out the process over a few hours while watching movies. But you should take a moment before going through the process yourself to get yourself acquainted with what is needed for your particular type of business in your particular state. All things are slightly different.
For more information on LLC's or anything else having to do with creating a small business or brand for yourself, please visit www.BuildYourEDUBrand.com.