From the very moment that you first blogged you became a business owner (whether you like it or not). Hitting the publish button is a business transaction. Your service? Publisher of online content. Your compensation? The time and attention of your raving readers, and eventually money.
The insta-second that you ‘write and send’ you’ve exposed yourself to liability. Your house, car, cash and any other assets are at stake. As a sole proprietor you are the business. You face unlimited personality liability for all work done in the name of your fancy blog. Setting up the business entity means that you are now separate from the biz. You are no longer the biz. The money that you put into the blog is no longer yours, but a “capital contribution” to the business.
How often have you second guessed decisions in your blogging business? Exactly.
The truth? There are many unknowns (and hopefully this quick + dirty guide will handle that).
The number one reason why you should form a business entity for your blog is to provide liability protection for your personal assets.
Translation.
Your house, car, cash or other assets (intellectual property) can’t be jacked from you because of business liabilities or debts. However, it is very important to understand that owning a business doesn’t give you “blanket liability protection.” Think about how crazy this world would be if peeps could act irresponsibly, do whatever they wanted and then say, “Charge that to my business.”
It doesn’t work that way. You still can be held personally liable if do any of these acts in the name of the business:
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you injure someone;
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you intentionally do something illegal, reckless or fraudulent;
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you take out a business loan and personally guarantee it (which is common);
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you treat the business as an extension of your personal affairs (i.e. commingling personal and business funds)
For this reason, it is also wise to consider insurance. Insurance protects your personal assets in situations where the LLC may not.
Lastly, you, dear blogger, have a ton of intellectual property under your belt. Your writing, your brand name, your logo, and original photos are all assets. Treat these as business assets (by setting up your business entity and registering copyrights and trademarks under the business name) rather than personal.