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When you launch a new social media startup, there are a number of foundational decisions to make. What will you call your company? Who is your target audience? What channels will you use for branding and outreach?

Before you get into those kinds of decisions, however, there’s something even more fundamental to consider: What legal structure will you choose for the business? This isn’t exactly the sexiest part of launching a new company, and yet it can have a significant long-tail impact on your ability to hire employees, your options for paying taxes, even the way you manage the business day-to-day.

So which legal structure is best? Because all businesses are different, there isn’t necessarily a one-size-fits-all solution here. However, for a majority of startups, the optimal business format is the Limited Liability Company, or LLC.

In this guide, we’ll explain a little bit more about what an LLC is, and why it can prove advantageous for your social media startup. Then, we’ll walk you through the basic steps for getting your LLC up and running.

To begin with, here is an overview of what LLCs are and how they work.

If you begin creating revenues on the basis of any self-employed activity, be it a social media startup or a lemonade stand, the government automatically considers you to be a Sole Proprietor. In a Sole Proprietorship, there is really no meaningful legal distinction between the business and the business owner; for all intents and purposes, you are the business, and the business is you.

Because of this, Sole Proprietors cannot separate their personal assets from their business assets. It’s all just one big pot. Likewise, business liabilities and personal liabilities cannot be unentangled.

It’s very possible to run your business as a Sole Proprietorship forever and never experience any problems. However, this legal structure does have some innate disadvantages. For example, it is complicated for Sole Proprietors to hire a team and to process payroll, and may cause some unwanted tax complications. Additionally, you don’t have any personal wealth protection; if someone sues your company, it means they’re coming after your personal assets.

Enter the LLC. When you register your startup as an LLC, you’re officially establishing it as a distinct legal entity, with assets and liabilities of its own. To put it differently, you’re establishing a separation between you and your business.

What are the Benefits of an LLC?

The nature of the LLC yields a number of significant benefits. Combined, these benefits make the LLC one of the most popular business structures in the country, and generally the best option for small business startups.

Personal Wealth Protection

One of the most significant benefits of the LLC format is personal wealth protection. By keeping your personal assets in one pot and your business assets in another, you can protect your family from the effects of a lawsuit, or from aggressive creditors who are targeting your business.

Tax Flexibility

The business structure you choose will determine your reporting relationship with the IRS. Fortunately, LLCs offer ample flexibility. By default, you’ll report on a pass-through basis, which means you’ll simply declare profits or losses on your personal tax return, then pay at your normal rate. But should you decide to pursue a corporate tax rate, that’s also an option.

Managerial Flexibility

LLCs also provide you with a lot of wiggle-room with regard to how you run the company. LLCs let you bring in partners, and decide how you want to allocate duties and profits. You can also hire a third-party management team to focus on the administrative stuff, allowing you to focus all your creative energy on social media.


Something else to consider is that not just anyone can register their business as an LLC. There are a few legal steps you have to take to certify your LLC as legitimate; more on that shortly! The upshot of this is that registering your LLC conveys real professionalism and credibility. As such, it can help you earn the trust of investors, potential clients, partners, even influencers whose celebrity you’d like to leverage.

How to Register Your Social Media Startup as an LLC

So what are the steps for registering your business as an LLC? The requirements can vary a little bit from one state to the next. For example, the guidelines for starting an LLC in California may look a little different from the ones for creating one in Florida, Wyoming, or Nevada.

With that said, the general trajectory is something like this.

1) Choose a name for your LLC.

For social media startups, names are critical. They’ll make or break your branding efforts, so you definitely need something memorable and catchy.

But you also need to make sure you pick something that’s legally compliant. LLCs are required to choose names that are unique, not already in use by another LLC in the state.

Fortunately, most states provide searchable directories, making it easy to confirm whether the name you want is still up for grabs.

2) Name a Registered Agent.

Every LLC is legally required to have a Registered Agent.

This can be either an individual or an organization, tasked with receiving tax documents and other legal correspondence on your business’ behalf.

Some details about choosing a Registered Agent:

  • In some states you’re allowed to serve as your own Registered Agent, but a majority of states will require you to hire a third-party Registered Agent service.
  • Registered Agent services are usually pretty affordable, sometimes charging less than $100 annually.
  • When selecting a Registered Agent, be sure to pick someone with a mailing address in the state where you’re registering. A PO box won’t work.
  • If you’re registering in multiple states, you’ll need an Agent in each one. Third-party services will usually make this pretty convenient for you.

3) Create an Operating Agreement.

An Operating Agreement functions as a charter for your social media startup. It’s how you answer questions like:

  • How will you and your partners split administrative duties?
  • How will you and your partners allocate profits?
  • How will you bring in new partners?
  • How will you handle a partner who decides to leave the business?

Not every state requires an Operating Agreement, but it’s still wise to have one. These documents can potentially spare you from a lot of legal conflicts down the road.

4) File Articles of Organization.

You’ll need to file Articles of Organization with your state. This document officially establishes your LLC as a distinct legal entity.

Some common questions about Articles of Organization:

  • What kind of information should you include? The stipulations vary by state, but expect to include your contact information, the name of all partners, the name of your Registered Agent, and some basic information about the mission and parameters of your business.
  • How long does it take to get approved? In most states, LLC approvals take three or four weeks to process. You can often pay a little extra to expedite the timeline, if you really need to.
  • How much does it cost to register an LLC? Registration costs vary by state, and can be anywhere from $20 to $300.

5) Get your banking in order.

There are a couple of important steps you’ll need to take to ensure your business banking is in order.

  • Claim an Employer Identification Number, or EIN. Available for free from the IRS, this number will allow you to process payroll and to file your income taxes. The wait time for an EIN is usually very minimal.
  • Set up a business bank account. In order to maintain that line of separation between business and personal assets, it’s important to set up a bank account for your LLC, one that isn’t tied to any personal accounts you might have.

6) Keep up with compliance

One of the great things about the LLC is that it comes with relatively little administrative overhead, especially compared with Corporations. Having said that, there are a few things you need to keep up with:

  • In most states, you’ll need to re-register every year.
  • In California, you’ll need to pay a flat-rate LLC tax.
  • If you change Registered Agents, you must report it to the state.
  • If your Registered Agent changes their contact information, you must report it to the state.

Maintain compliance to ensure there’s no legal friction with your LLC.

LLCs Set You Up for Success

What will it take for your social media startup to succeed? There are countless factors and variables, but one that you shouldn’t overlook is the legal structure you choose. For a majority of social media startups, the best foundation for long-term impact is the tried and true LLC structure.

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