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How to Secure Your Podcast's Future Legally with An LLC

How to Secure Your Podcast’s Future Legally with An LLC

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How are you doing in podcasting as a guest, host, or both?

Most podcasters have yet to take steps toward legally protecting the business and brand behind their podcast. That’s because the legal side of content creation seems complex and intimidating, but it doesn’t have to be! In this episode, Gordon Firemark (The Podcast Lawyer™) explains how an LLC can protect your content while legitimizing your podcast and even save you money! Get ready to learn how you can benefit from using an LLC to lay a solid foundation for your podcast!

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To LLC or not to LLC is the question every podcaster should ask. Whether you are podcasting as a business or consider it a hobby, whether it’s just you or a team effort, whether you’re aiming to make money from your podcast or to get a message out and get people thinking and talking or taking action, it is essential to think about whether you are in business.

Now for my money, if you’re putting out regular episodes of content, regardless of your purpose, you are engaging in commerce. You’re doing the kinds of things that businesses do. And from the legal standpoint, there’s a perfect chance that you will be considered a business, whether you intend it to be.

Hi, I’m Gordon Firemark, the podcast lawyer. I’m a media, entertainment, and business lawyer. I’ve been helping creators across media and entertainment for my whole career. My mission is to ensure you can do your thing: make your content, entertain, educate, inform, and influence audiences in a safe, innovative, and effective way. Now, because I’m a lawyer, I must make a quick disclaimer here. I am a lawyer, but I’m not your lawyer. I’m providing some general information that you’ll find helpful.

But it would help if you relied on something other than this as legal advice from me or my hosts here today. Okay, so I want you to do your thing, make your mark, influence audiences, and be safe and protected as you do. One of the most important ways to protect yourself is by forming an LLC around your podcast.

Understanding the Risks: Why Podcasters Need Legal Protection

You might be thinking for yourself right now: protect yourself from what? Well, let me tell you. Some of the most common risks that podcasters take don’t even feel like risks at the time. You’re going to start a podcast. So you grab a friend, and you start creating. Well, guess what? You just got into business together. What happens if things don’t work out or someone stops pulling their weight or one of you puts up more money or does more work and feels resentful about sharing the rewards equally?

Ownership and management disputes among podcasters are the most common problems I hear about. And honestly, sometimes creators do things that carry liability. You could use too much of a bit of music, or you say something about a person that isn’t true, and it hurts their reputation, or your co-host does, or your guest does. Suddenly, you’re in the crosshairs of nasty demands or lawsuits that can cost a fortune.

“Ownership and management disputes among podcasters are the most common problems I hear about. And honestly, sometimes creators do things that carry liability.” – Gordon Firemark

Liability in Podcasting: What You Need to Know

The fact is, making media content is a risky venture. A liability can catch you even if you do everything by the book. When you’re making media, you’re engaging in something that, until recently, was an activity that only big, well-financed companies could do. And while the playing field is much more level now, audiences still think of creators as having vast resources at their disposal. So when they see something they don’t like or that hurts their feelings, they go into a get-em mode and start looking for ways to get some payday to punish you. So, if you’re going to be viewed from the outside as a business, shouldn’t you take steps from the inside to put up the protections that businesses have?

“The fact is, making media content is a risky venture. A liability can catch you even if you do everything by the book.” – Gordon Firemark

Of course, I’m talking about forming an LLC for your venture. I’ll first tell you that having an LLC is only for some podcasters. For example, your business might already be a corporation or an LLC structure. No new LLC is needed if the podcast is a marketing initiative of an existing company. But for most, it’s wise to consider at least implementing the legal separateness that the LLC affords.

LLC: Your Shield Against Legal and Financial Risks

So, what is an LLC? Well, LLC stands for limited liability company. So there it is, front and center. Limiting the liability of its owners is one of the critical benefits of having an LLC. LLCs are recognized under the law in much the same way that corporations are. They’re treated as a separate legal person that can have legal rights and incur liabilities. But like a corporation, the owners of a properly established and maintained LLC won’t be held accountable for the company’s liabilities. So, the LLC acts as a shield.

“LLCs are recognized under the law in much the same way that corporations are.” – Gordon Firemark

An LLC is formed by a relatively simple filing document called articles. You file it with the state government in which you’re forming it, and then the members, that’s what the owners of an LLC are called, enter into a contract between and among themselves and the company. That’s the operating agreement. That operating agreement acts like the bylaws or constitution of the company, setting out the rules for how the company will be owned and managed and how the profits and losses will be allocated.

Exploring the Benefits of Forming an LLC for Your Podcast

It sets forth answers to lots of the what-if questions. What if we want to bring in new members? Or what if someone wants to leave? What happens if someone becomes disabled or dies? What happens if we decide to sell the company or close it up? So you can see the LLC does more than protect owners from liability. It provides an ownership structure. I extensively discuss a podcast prenup, a document or structure that handles those what-if questions. So everyone knows what’s supposed to happen if these various things happen.

“So you can see the LLC does more than protect owners from liability. It provides an ownership structure. I extensively discuss a podcast prenup, a document or structure that handles those what-if questions. So everyone knows what’s supposed to happen if these various things happen.” – Gordon Firemark

The LLC and its operating agreement can be that structure. An LLC also provides survivability. The company can continue operating since it’s a separate person under the law. It can stay alive after one of the owners leaves or dies. And I’ll tell you, that is different from what happens when there’s a sole proprietor partnership. The LLC can also take on the role of the employer. Again, it separates the owners from the risks and liabilities that having employees can entail, and it can set up pension plans and benefits programs and all those kinds of things as well. All people who work in an LLC, whether they’re members of the company or not, independent contractors or employees, should all be signed to contracts outlining their job responsibilities, rights, compensation, and benefits. And the contracts should make it very clear that what they create belongs to the company.

Next, the LLC could offer tax advantages. I’ll say another disclaimer: I am not a tax expert. So, you will want to discuss this with your accountant or tax advisor. Still, LLCs and corporations can take deductions as business expenses for some things that an individual taxpayer can’t. So it’s worth exploring. Although it isn’t an issue for most podcasters, an LLC can finance operations and raise capital by selling equity interests, shares, and membership interests to investors. Ultimately, an LLC projects stability and longevity. It gives your podcast additional street cred with vendors, guests, audiences, and sponsors. People like to do business with companies. They feel more secure with the perception that the people behind it are more serious, professional, and business-like. 

Steps to Forming an LLC for Your Podcast

Why might you not want to form an LLC for your podcast? Well, first, of course, is the cost. Forming an LLC will cost some money, but less than you fear. In some states, it could be under $100 in government fees and even less yearly after that. But it can be several hundred or even approaching $1,000 a year in others.

And then there’s the hassle factor. Having an LLC and that terrific separateness I spoke of also means you have more administrative stuff to handle. It’s not a big hassle, but some government filings, record keeping, and reporting take little time and energy. 

People should avoid seeing a company in the mix. If you’re a very personal brand, people prefer to deal directly with you and not with your company, but that’s rare. When it is an issue, there are ways to deal with it. A lot of celebrities use companies whenever they do business. 

Alternatives to LLC: Insurance and Firm Contracts

And if an LLC doesn’t seem like the right fit for your podcast, some alternatives offer some of the same benefits. For example, getting a good set of insurance policies in place can be a substitute for the LLC liability shield. I often recommend an LLC and insurance for clients that can manage it as a sort of belt and suspenders approach. And you can use contracts with your partners, co-producers, co-hosts, and others, even your guests who work on the show with you. And those deals can establish who’s in charge, who gets what, and so on. 

However, forming an LLC is the better decision for most folks. The benefits over time will undoubtedly outweigh the costs. And if you’re serious about podcasting and want to be perceived as a professional, having that business entity in place makes sense. So, if I’ve got you thinking that an LLC is the correct answer for your podcast, what will you do to make it happen? The steps are straightforward. 

“The benefits over time will undoubtedly outweigh the costs. And if you’re serious about podcasting and want to be perceived as a professional, having that business entity in place makes sense.” – Gordon Firemark

Simplifying the Process: Steps to Forming an LLC

First, you have to figure out where the company will be located. Some states roll out the red carpet for new business entities, and forming somewhere other than your home is more advantageous. But beware because, in many instances, you’ll still have to register at home, pay taxes there, and so on. The cost savings may need to be revised. 

Next, prepare and file articles of organization with your selected state. Then, draft an operating agreement that clearly defines how the company will be managed, a framework for decision-making processes, how profits will be distributed, and other critical aspects of your business’s operational plan.

You’ll also need to write up some minutes of your first meeting of members. I put that in air quotes because if it’s just one person in the LLC or everybody agrees, you can do everything in a written consent document. You must issue membership certificates, get a federal tax ID number, and open the company’s bank accounts. And then you’re ready to start operations. Now, I know this sounds complex, but it’s not. The truth is, it’s pretty quick. Other than waiting for the government offices to do their part, which can sometimes take a few weeks, even though it’s just stamping a form and entering data into their systems, the rest of the process can be handled in a day or two.

The Importance of Legal Guidance: Why Engaging a Lawyer is Essential

It would help if you considered engaging a lawyer to help you. It doesn’t need to cost a fortune. Most of us will set a very reasonable flat fee, and the benefit is that you get a turnkey LLC with all the documents prepared for you. You sign a few things, mail them out, and you are good to go. Now, there are services out there, online businesses that say they can help you file and form your LLC for just a fraction of the cost of using a lawyer. I have mixed feelings about these. 

Now, I’m a lawyer, and here’s the thing:

  • Many clients come to me after one of these rapid Zoom.
  • Fast services could have done better for their LLC.
  • They need to fix things or get all the documents they need.

So they still have to hire a lawyer. These outfits resemble vending machines, but your business isn’t a candy bar. Would you get a haircut or a medical procedure done by a vending machine? Imagine a machine with a big hole that says, haircuts $1, insert head here. Would you stick your noggin in there? You might get a great haircut if you have your head and your hair. You could also wind up missing an ear. So, at least reach out and consult a lawyer. Most of us will do that for free, and we can lay out our recommendations and the costs so you know what you’re getting into. 

What Happens After the LLC is Established?

After the LLC is established, a few other minor tasks must be handled. Any preexisting assets of the venture, like existing podcast episodes, a trademark title, and contracts with sponsors or vendors, must be transferred into the company, and accounts must be made and changed to the company name. You’ll also need to sign employment and independent contractor agreements with all the personnel. You’ll need to keep good records of your business’s revenues, expenses, profits, decision-making, relationships with vendors, client sponsors, etc. 

To recap, forming a limited liability company can offer liability protection, flexible management and financial structures, and potential tax benefits, which lends credibility to your podcast. But it does come at some cost. It requires a little effort to maintain, and it may only partially be congruent with the image you want to portray. Alternatives like insurance and firm contracts could be viable options if an LLC isn’t the right fit for you. But whether to form an LLC is critical and depends on your particular needs and aspirations.

“To recap, forming a limited liability company can offer liability protection, flexible management and financial structures, and potential tax benefits, which lends credibility to your podcast.” – Gordon Firemark

Consider the Pros and Cons of Forming an LLC

So take a moment, reflect on your goals and objectives, consider the potential upside and the risks of not creating a business entity, and figure out a game plan. It’s often a good idea to start your LLC at the beginning of a calendar year or quarter. That keeps the bookkeeping and accounting more straightforward. And please do consult a lawyer and your tax advisor about this. Just because you can do something yourself doesn’t mean you should.

There, you have a survey of the landscape of LLCs, from understanding what an LLC is to the roles within an LLC and the reasons for and against forming one for your podcast. We’ve also discussed the steps to form one and the various things you must consider once established. 

I’m Gordon Firemark, the podcast lawyer, and I want to leave you with this thought. Remember, the best investment you can make for your podcast is to lay a strong foundation. And always remember that podcasting is not just about making some noise. It’s about making the right kind of noise. And sometimes, that means taking significant, bold actions and calculated risks. And having an LLC for your podcast can make that easier since you know you’ve got some structure and protection in place. Thanks for being here.


About Gordon Firemark

Gordon Firemark is often referred to as The Podcast Lawyer™.  He helps creatives, artists, entrepreneurs and others achieve the dream of getting their messages out and making a meaningful impact with their craft by offering legal services, online courses and forms and templates for do-it-yourselfers.

He is the author of the Podcast, Blog & New Media Producer’’s Legal Survival Guide, and is a podcaster himself, producing and hosting  the Entertainment Law Update podcast since 2009, and  more recently “Legit Podcast Pro”  to help Creators figure the business and legal side of things.


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