Guest post by John Gerber
If you’ve been blogging for a while, or if your blog concept includes commercial aspects, you have probably thought about whether you should formalize your blog into a business and how to go about doing it. If you’re like many bloggers, that thought can raise intimidating questions. Why should I do it? What do I need? Isn’t it expensive? Where do I start?
1. Why and when should I formalize my business? Your blog may have started as a simple online journal, a place to express your opinions, or as a side project. Once it begins generating revenue, it becomes more than any of those things. It is a business and should be treated as such. The process of formalizing your blog into a business means creating an identity for it that is separate from yours as an individual. From a legal perspective, that means establishing a legal entity (an LLC or corporation) and conducting all of the activities of the blog as that entity (i.e., signing in its name, keeping its own bank account, etc). Individuals commonly go through this process in order to protect their personal assets from liabilities of their business, since the owner of the entity, in most circumstances, will not be personally liable for the actions or debts of the business. From a liability perspective, when your blog consists only of original content you personally create, you are probably not facing considerable exposure. However, if you collect money on a regular basis, publish third party content, offer products or services, or have employees the blog should become a business entity.
2. What do I need? Your initial organizational needs include forming your LLC or corporation and obtaining federal and state tax identification numbers for it. This tells the IRS and the state revenue department that you have a business that will be separately making tax filings, and your bank will need the entity formation document and tax identification number when you open the business account. You will also want to consider registering a trademark for your blog, and possibly its logo/design, if you are building it into a brand. Finally, if you don’t have this already for your blog, you will want terms and conditions in the name of your entity for users of the site, among other things to protect copyrights, for third party posts and for advertisers. If you offer products or services, such as consulting, through your blog, then these same considerations exist for that line of business.
3. Isn’t it expensive? The good news is that there are a variety of resources available that keep the expense relatively low. State fees for forming an entity typically run, with exceptions, in the range of $75 to $150. The legal set-up for your business shouldn’t stop there, though. You will need a number of other documents, including client/customer contracts, an operating agreement if you’re working with a partner, subcontractor agreements if anyone else is contributing to the blog, and a non-disclosure agreement if you’re working with vendors. All these documents can be found online for a small fee.
4. Where do I start? It’s not required that you use an attorney to set up your entity. If you are the do-it-yourself type, your state’s website will assist you in making the necessary filing to form your entity, and the IRS makes obtaining an identification number straightforward on its site. There are a number of online legal resources (www.upstartlegal.com is one of them), as well, that will handle the entire process for you at a reasonable cost.
Do you think of your blog as a business? If so, have you taken any of these steps to formalize your blog as a business?