Should I Form an LLC For My Podcast?
Podcasts have quickly become the “talk radio of the internet” and have established themselves as a massively popular form of communication and ‘humanizing’ your brand. Nowadays there are millions of people all over the U.S. are listening to podcasts with topics ranging from daily news and business to sports and comedy, even startups!
According to recent consumer 2019 report cited by Edison Research, an estimated 90 million Americans are monthly podcast listeners (51% percent of the population over age 12) and has doubled since 2015, with a market for podcast advertising estimated at over $300 million!
But did you know that podcasts can also be a good way to start a business? Podcasters are making serious money. Gimlet Media was purchased by Spotify for over $300 million!
Starting a podcast can become a viable business. You might be surprised at how much revenue you can earn from your podcast, especially if you can build a loyal audience and get sponsorship partnerships in place. Advertisers are willing to pay more to reach podcast audiences, because these audiences tend to be loyal, dedicated listeners who are more highly educated and more affluent than average consumers.
Here are a few reasons why you should consider forming an LLC for your podcast — and how to know when it’s time to “make it official.”
Protect Yourself from Personal Liability
If your podcast is starting to attract a sizable audience, and especially if your subject matter might be controversial. a podcast LLC can potentially provide personal protection against liability from lawsuits related to your podcast business.
No one goes into business wanting to get sued, but it could happen. Having a podcast LLC can provide additional peace of mind knowing you are protected against certain worst-case scenarios of being in business as a podcast host.
Separate Your Business Finances
After forming your LLC for your Podcast, you will be able to get an Employer Identification Number (EIN, US Tax ID) for your podcast business, which will also help you set up a business bank account for your podcast. If your podcast is starting to make some significant revenue, you will want to have a dedicated business bank account for that income.
Having a business bank account is simply the right way to do business; it lets you separate your business and personal expenses, it helps you build credit under your business’s name and it can make it easier to manage your documentation and details for tax time. We recommend to work with a CPA for more specific tax questions.
Makes Your Podcast More “Official”
Another advantage of forming an LLC for podcast hosts is that your podcast gets an additional degree of credibility and legitimacy. Knowing that your podcast is not just a hobby or a short-term project, but an actual legal business entity, can help you do business more effectively with potential sponsors, podcast guests, distribution partners, social media marketing partners and more.
When you contact potential partners and ask them to help promote your podcast, be guests on your podcast, sponsor your podcast or otherwise support your work, you are not just an individual person with a quirky podcasting hobby — you are a business owner who has made it official by forming an LLC and doing the legal paperwork.
Running a podcast can be a wonderful creative outlet, a great way to explore an area of interest and, if you’re lucky, a viable way to start a business and build an audience based on your passion and expertise! There’s always an available niche to explore!
For a more detailed discussion or more info about LLC’s feel free to schedule a free no-obligation call with one of our Lawyers or CPAs here