If you’re building your business and following, you must protect yourself and your content. While OnlyFans was originally used primarily for adult content, music creators, influencers, and others have turned to the platform to capitalize on their following. It’s used by everyone from major celebrities to small creators wanting to share a wider range of content than allowed on Instagram or other social media platforms.
If you plan to build your business using OnlyFans, learning to create a limited liability company or LLC for OnlyFans can help protect your personal assets and add validity to your business. Read on for everything you need to know.
OnlyFans and the Need for Legal Protection
OnlyFans is a subscription-based platform originally created for adult-only content. It catapulted in popularity during the pandemic. Creators post videos, photos, and text and connect with their fans. Musicians have even started using OnlyFans to launch music videos. Celebrities like Cardi B, Amber Rose, Jordyn Woods, Tyler Posey, Aaron Carter, Austin Mahone, and Chris Brown have all created OnlyFans accounts.
To join, subscribers pay a monthly subscription fee of between $4.99 and $49.99. Creators can also charge $5 or more for tips or paid private messages, significantly boosting the earning potential for those with a highly engaged subscriber base.
Content creators’ risks and legal considerations on OnlyFans include copyright issues, chargebacks and fraud, scams, and even stalking. When you separate your personal assets from your business assets by forming an LLC, you can better protect yourself from liability and legal risks.
Is LLC the Best Business Structure for OnlyFans Content Creators?
When you create a business, you can choose between creating an LLC or a corporation. The other business structures for OnlyFans—a sole proprietorship or a partnership—don’t offer liability protection. As an individual content creator, a corporation has additional legal requirements and income tax filings, making it more expensive and difficult to maintain.
That’s why an LLC makes sense for small business owners who want to protect themselves from legal liability and separate personal and business finances. You can create an LLC for any business, from a t-shirt company at home to launching a record label. Some states offer more favorable treatment, with many creators choosing Wyoming or Delaware to create an LLC. You can also consider a DAO LLC.
Benefits of LLC for OnlyFans Content Creators
There are numerous benefits to creating an LLC for content creators, including:
1. Personal Liability Protection
By operating as an LLC, your personal assets are separate from your business assets. This offers liability protection in case your company is sued. It also separates your personal funds from business finances if the company has to enter into litigation over copyright or trademark issues.
2. Credibility and Professionalism
Operating as an LLC demonstrates to potential clients, partners, and investors that you are running a legitimate business entity and are committed to its long-term success. Also, having “LLC” after your business name adds a level of professionalism that can help attract and retain customers. This can facilitate collaboration with other creators or add credibility when working with companies and suppliers.
3. Tax Advantages
By default, an LLC is considered a “pass through” entity, which means that the business’s profits and losses “pass-through” to the owners and are reported on their personal tax returns. The tax benefits are simplified filings. Like any business, you can track business expenses and deduct allowed expenses for potential tax savings. You can also elect to be an S corporation or S corp for additional tax advantages (in some cases).
4. Easy Business Management
The administrative requirements of an LLC are generally simpler and less burdensome than other business structures. While requirements vary by state, you must file an annual report and track business expenses. However, you don’t have to meet any requirements for annual meetings, audits, or other criteria unless you specify that in your LLC operating agreement (more on that below).
5. Flexibility and Growth Potential
You can have a single-member LLC, where you are the sole owner, or a multi-member LLC, where you can have multiple partners or investors. This flexibility allows for easier expansion and growth in the future. With an LLC, adding new members is simple so your business structure can adapt with you as your company grows.
How to File an LLC for OnlyFans Content Creators?
There are only a few steps to create an LLC and add a layer of legal protection for yourself. Here’s what you need to know.
Step 1: Research and Choose a Business Name
If you’ve already been operating an OnlyFans account, you might have a business name already established. If not, you’ll want to research possible names and consider whether you want to have your own website and check available domain names.
Next, you will want to check with the Secretary of State’s database in the state where you plan to establish the LLC to confirm your chosen business name isn’t already taken. You may also want to search in the US patent and trademark office to confirm the name isn’t trademarked.
Step 2: Choose a Registered Agent
A registered agent is an individual or business entity designated to receive and accept legal documents on behalf of the business. The registered agent must have a physical address in the state and be available during normal business hours to accept the service of process if the business is sued.
In most states, a registered agent can be a person residing in the state, a domestic corporation, an LLC, or a foreign corporation or foreign LLC authorized to do business in the state. You can also act as your own registered agent as long as you can be available at the physical business location during normal business hours.
Step 3: File Articles of Organization
The Articles of Organization is a legal document that provides the necessary information about the LLC, such as its name, address, purpose, and the names of its members or managers. This is the official filing document in many states to create the LLC.
The LLC becomes a legally recognized entity separate from its owners by filing the Articles of Organization with the Secretary of State or appropriate government agency. This means you gain the benefits of liability protection while easily separating personal assets from business income.
Step 4: Create an Operating Agreement
An LLC operating agreement is an important document that outlines the rights, responsibilities, and operating procedures of the members of an LLC. Even if you create a single-member LLC, creating an operating agreement is important to establish business governance.
It serves as a contract between the members and governs the company’s internal affairs. Points covered in the operating agreement include the distribution of profits and losses, management structure, decision-making process, and dispute resolution.
Common elements of an LLC operating agreement include:
- The company’s vision and mission
- Percentage of ownership for each member
- Responsibilities of each member
- Voting rights
- Powers and duties of managers (if applicable)
- Distribution of profits and losses
- Meeting schedule and requirements
- Buyout and buy-sell rules
- Policies on dissolution
Step 5: Obtain Necessary Permits and Licenses
Depending on the nature of your business, and the state where you operate, you might need to apply for relevant licenses or permits with the Secretary of state, city, or county. You can check with the Secretary of State and local Chamber of Commerce to ensure you have all necessary licenses.
Step 6: Register for Taxes and Obtain an EIN
All LLCs should get an employer identification number (EIN) from the IRS. The EIN allows you to hire employees and open a business bank account. You can apply for an EIN online or through the mail using IRS form SS-4. Then, you’ll want to open a business checking account to separate personal finances from business finances. An LLC formation service can include applying for an EIN so you can start opening an LLC bank account faster.
Learn more about OnlyFans taxes here. If in doubt, talk with a tax professional or CPA to understand more about your company’s tax filings.
Step 7: Stay Compliant
Once you’ve established an LLC, it’s essential to keep the LLC active and compliant. You’ll need to file annual reports and maintain proper accounting records. To file annual taxes in pass-through taxation, you must pass all profits or losses to the LLC members.
Building Your OnlyFans Business
Creating an LLC is the first step to launching your business. You can use the LLC to pivot in many directions, including side hustles for grad students, teens’ side hustles, or writers, to expand your business in different directions. While building a business, you need a reliable team to be successful.
doola LLC formation services can be your team. doola guarantees fast business formation in any state. You get company formation, help in securing an EIN, and opening your business bank account. Get doola to take care of the formation so you can focus on building your core business.
How much does it cost to form an LLC for my OnlyFans business?
The cost to form an LLC depends on the state of formation. It could be as little as $40 in Kentucky or as much as $500 in Massachusetts. If you choose to use a business formation service, that could add $40 to $200 to the costs, depending on the services offered.
How long does it take to form an LLC for my OnlyFans?
The time it takes to form an LLC for OnlyFans depends on the state of filing and their average processing times. It could take anywhere from 24 hours to eight weeks for your LLC to be finalized. In most states, you can get faster processing by filing the Articles of Organization online.
Can I convert my existing Sole Proprietorship into an LLC for my OnlyFans?
Yes, you can convert your sole proprietorship into an LLC for your OnlyFans business. To create an LLC, you’ll need to follow the steps above and form a single-member LLC. It’s a good idea to convert a sole proprietorship into an LLC to protect your legal liability and add legitimacy to your business.
Do I need to be a US citizen to form an LLC for my OnlyFans?
No, you don’t need to be a US citizen to form an LLC for OnlyFans. Anyone can form an LLC, even non-residents. However, once you form a US LLC, you’ll need to comply with all legal requirements for the LLC.
Do I need business insurance for my OnlyFans LLC?
It’s wise to get business insurance for an LLC. Many states require LLCs with employees to hold workers’ compensation insurance. You can also consider general liability insurance and other types of insurance based on your business structure.
Can I change the name of my OnlyFans business after forming an LLC?
To change the name of your OnlyFans business after forming an LLC, you will need to comply with state requirements. In most states, you can file to change the LLC name as long as there isn’t another business with the same name. You can also consider using a DBA instead of changing the LLC name.
Can I dissolve my OnlyFans LLC if I decide to stop my business?
Yes, you can dissolve the LLC if you stop the business. You must follow state procedures for LLC dissolution and inform the relevant government organizations. In most states, this includes the Secretary of State and the tax services.