In this article, you will learn:l
- What is an LLC?
- Why Do I Need an LLC for OnlyFans?
- How to Start an LLC for OnlyFans?
- How Much Does it Cost to Start OnlyFans LLC?
Many OnlyFans content creators face the dilemma of whether to have an LLC for OnlyFans or be a sole proprietor for their OnlyFans services. While you can either be a sole proprietor or have an OnlyFans LLC, sell content on OnlyFans, and earn higher payouts.
But you must know that having an LLC for OnlyFans can provide you with legal and tax benefits that aren’t available to you as a sole proprietor.
You are a sole proprietor if you simply created an OnlyFans creator account, started creating content, and earned payouts from your services.
It was simple and easy as you didn’t need to register your business with your Secretary of State’s office, file any state documents and fees, or file complicated tax returns with the IRS.
But you must know that it’s making you miss out on several benefits that you can probably avail if you choose to register your business as an OnlyFans LLC.
Don’t know how to start an LLC for OnlyFans? We’ve got you covered. In this article, we’ll help you know what is LLC, why you need an LLC for your OnlyFans, how to start an OnlyFans LLC, and what LLC documents you’d be needing to register LLC.
What is an LLC?
A Limited Liability Company (LLC) is a form of business structure that offers a limited personal liability on the part of the owner like a corporation and pass-through taxation benefits like a partnership. That is, your assets as an LLC member are protected against any business losses or outstanding debt and cannot be used to pay off the same.
Also, the LLC is a ‘pass-through’ entity by default. This means that the business income is passed to you (as an LLC member) as personal income and is liable for only personal income tax and not corporate tax, saving you from double taxation.
Thus, LLC is a form of business entity that is a hybrid between a partnership and a corporation. An LLC needs to be registered with the Secretary of the State in which the business is located and requires one to file Articles of Organization with the Department of State. It is typically formed by two or more persons and is a legal entity separate from its members.
Additionally, members of the LLC may prepare an Operating Agreement containing important details such as the management structure, division of profits, etc.
Though, it is not mandatory to file an Operating agreement with the state, it is highly recommended to avoid instances such as a disappointed partner backing out or one being unable to add a new partner to the LLC.
Further, there are different types of LLCs including single-member LLCs, multi-member LLCs, member-managed LLCs, and manager-managed LLCs.
A Single-member LLC is the best for an OnlyFans content creator. Let’s see how?
Why Do I Need an LLC for OnlyFans?
As mentioned earlier, LLC is best for you as a content creator on OnlyFans because of the legal and tax benefits it offers you. After all, you don’t want to lose out on saving taxes and being legally protected for your personal assets as an OnlyFans content creator. Let’s see how an LLC can benefit you as an OnlyFans creator.
1. LLC Offers You Legal Protection
An LLC is a legal entity separate from its members. That is, members are separate from their business and are not personally liable for business losses and debts.
Accordingly, if you choose to register your OnlyFans business as an LLC, you legally separate your personal assets by separating yourself from your OnlyFans business. This means that if someone sues your LLC in the near future, your personal assets would be protected against such a suit and the plaintiff won’t be able to go after your personal assets to make good his losses. Only your business assets would be vulnerable and could be used to claim losses by the plaintiff.
However, you do not get this legal protection if you choose to be a sole proprietor of your OnlyFans business. Since a sole proprietor is not separate from his business, he is personally liable for all the business losses and debts.
In other words, your personal assets as a sole proprietor become vulnerable and the plaintiff can go after your personal assets in case of a suit.
2. You Avoid Double Taxation
A single-member LLC is automatically considered a ‘Disregarded Entity’. This means that it is disregarded as a separate entity from its owner unless it chooses to be treated as a corporation for tax purposes.
Since a single-member LLC is not regarded as a separate entity from its owner for tax purposes, the income passes to the single member like a sole proprietor which becomes taxable as the owner’s personal income.
Accordingly, the owner of the single-member LLC pays only the federal income tax as well as self-employment tax, much like a sole proprietor but is not liable to pay corporate tax. This is why a single-member LLC is a ‘pass-through’ entity where the business income passes to the owner and is not subject to double taxation.
This is unlike the owners of a Corporation who are subject to double taxation. This Corporation is treated as a business entity separate from its members.
As a result, the business income becomes subject to the corporate tax and the income members receive as their share comes under the taxable income of each member and is subject to federal income tax.
Thus, choosing to setting up an LLC for your OnlyFans can help you avoid double taxation and at the same time take the benefit of legal protection for your personal assets.
3. You Can Deduct Your Expenses from Taxable Income
There are so many expenses that you incur as an OnlyFans creator. These could include purchasing video editing software, computer/laptop, camera, and equipment, paying salary to your video editor, internet and office expenses, data storage expenses, etc. All these expenses can be deducted to have a lower taxable income subject to federal income tax.
How to Start an LLC for OnlyFans?
There are a few things that go into LLC formation. These include selecting the type of LLC you want to register, registering your LLC with the Secretary of State, LLC paperwork, creating an Operating Agreement, filing Articles of Organization, taking requisite permits and licenses, etc.
Let’s have a look at the steps involved in opening an LLC step-by-step.
a. Choosing a Business Name
Your LLC must have a name that is unique and distinguishable from the other business entities registered with the Secretary Of State with whom you register your LLC. Before filing an LLC, make sure the name you plan to use is available for registration by either searching on your Secretary of State’s website or emailing the state secretary the name of your choice.
Please note that you need to provide the name of your LLC in the Articles of Organization that you file with your state secretary.
You can even choose to reserve the name of your LLC if you have chosen the name, and checked its availability, but are not ready to file Articles of Organization with the state.
Name reservation will give you the exclusive right to use the LLC name for days ranging between 120-180 days, depending upon your State Laws. You need to check your State of Secretary website to know the name reservation fee and the form required to be filed for name reservation.
b. Appointing a Registered Agent
Not all states require you to appoint a registered agent to act as the point of contact for all the LLC paperwork. However, it is mandatory as per some states to appoint a statutory agent to would receive the legal notices, see that all the LLC documents are filed, or meet any other demand that is made by the state on the LLC.
Further, he or she must be a person who is a physical resident of the state in which you’re forming an LLC. He necessarily may not be the owner or employee of the company.
Additionally, the name of the Original Appointment of the Registered agent includes the name and address of the agent. In case of any changes with regard to the change of address or resignation/death of the agent, the LLC is required to appoint a new agent by filing the requisite form and fees in states where his appointment is mandatory.
c. Preparing an Operating Agreement
You must note that Operating Agreement is not a part of the filing process in an LLC formation in many states. However, it is highly recommended to prepare an Operating Agreement before you choose to file any LLC documents with the State.
An Operating Agreement is a document that contains important information such as the division of profit share, management structure, rights, obligations, voting rights of the Wonders, and other terms of the LLC.
It may not be required by many states but it is highly recommended to draft one. This is because the Operating Agreement comes to rescue in the times of confusion and enables its members to carry out business according to the set rules.
d. Filing Articles of Organization
The most important step in registering the LLC is filling out the Articles of Organization form with the State where you choose to register LLC.
Each state has its own form and requirements with regard to the information that needs to be provided in the Articles. The form must be signed by at least one person and the State specific fee for filing Articles must be submitted. Typically, an Articles of Organization includes:
- the name of the company which must include terms like Limited Liability Company, L.L.C., or LLC.
- original appointment and acceptance of the registered agent (if required by the state)
- date and time of the LLC formation if different from the filing date
- purpose of the LLC
e. Taking Business Licenses and Permits
Business licenses are nothing is nothing but the state government’s approval to start and run a business in the State. Being an OnlyFans content producer, you do not require any license or permit from the state governments to earn money via OnlyFans.
f. Statement of Information Form
Some states require you to fill out the Statement of Information form along with the Articles.
g. Tax Forms
As discussed earlier, you’ll be treated as a disregarded entity for tax purposes if you choose to set up an LLC for OnlyFans. Accordingly, you’ll be required to fill out form W9 by OnlyFans in case you are a US resident. OnlyFans will then use the tax information provided in your OnlyFans W9 to file form 1099-NEC and send it to you in case you earn $600 or more on OnlyFans.
As a single-member LLC, you can then file your individual returns in form 1040, together with 1040 schedule C, 1040-SE, and 1040-ES.
How Much Does it Cost to Start OnlyFans LLC?
The cost to start an LLC for Onlyfans varies from state to state and thus depends upon the state where you choose to register LLC. You must check with your State Secretary’s website to know the LLC cost for your state.
The following table provides the links to the state departments of all 50 states. You can check the LLC requirements and costs for the state where you want to register your LLC.
|State Departments||Website Links|
|Alabama Secretary of State||https://www.languagepeople.com/secretary-of-state-websites/|
|State of Alaska||https://alaska.gov/|
|Arizona Secretary of State||https://azsos.gov/|
|Arkansas Secretary of State||https://www.sos.arkansas.gov/|
|California Secretary of State||https://www.sos.ca.gov/|
|Colorado Secretary of State||https://www.sos.state.co.us/|
|Connecticut Secretary of State||https://portal.ct.gov/sots|
|State of Delaware||https://delaware.gov/|
|District of Columbia Office of the Secretary||https://os.dc.gov/|
|Florida Department of State||https://dos.myflorida.com/|
|Georgia Secretary of State||https://sos.ga.gov/|
|State of Hawaii||https://portal.ehawaii.gov/|
|Idaho Secretary of State Business||https://sos.idaho.gov/|
|Illinios Secretary of State||https://www.cyberdriveillinois.com/|
|Indiana Secretary of State||https://www.in.gov/sos/|
|Iowa Secretary of State||https://sos.iowa.gov/|
|Kansas Secretary of State||https://sos.ks.gov/|
|Kentucky Secretary of State||https://www.sos.ky.gov/Pages/default.aspx|
|Loiusiana Secretary of State||https://www.sos.la.gov/Pages/default.aspx|
|Maine Secretary of State||https://www.maine.gov/sos/|
|Maryland Secretary of State||https://sos.maryland.gov/Pages/default.aspx|
|Massachusetts Secretary of the Commonwealth||https://www.sec.state.ma.us/|
|Michigan Secretary of State||https://www.michigan.gov/sos/|
|Minnesota Secretary of State||https://www.sos.state.mn.us/|
|Mississipi Secretary of State||https://www.sos.ms.gov/Pages/default.aspx|
|Missouri Secretary of State||https://www.sos.mo.gov/|
|Montana Secretary of State||https://sosmt.gov/|
|Nebraska Secretary of State||http://www.sos.ne.gov/dyindex.html|
|Nevada Secretary of State||https://www.nvsos.gov/sos|
|New Hampshire Secretary of State||https://www.sos.nh.gov/|
|New Jersey Department of State||https://www.state.nj.us/state/|
|New Mexico Secretary of State||https://www.sos.nm.gov/|
|New York Department of State||https://dos.ny.gov/|
|North Carolina Department of the Secretary of State||https://www.sosnc.gov/|
|North Dakota Secretary of State||https://sos.nd.gov/|
|Ohio Secretary of State||https://www.sos.state.oh.us/|
|Oklahoma Secretary of State||https://www.sos.ok.gov/|
|Oregon Secretary of State||https://sos.oregon.gov/Pages/index.aspx|
|Pennsylvania Department of State||https://www.dos.pa.gov/Pages/default.aspx|
|Puerto Rico Departmento de Estado||https://www.estado.pr.gov/en/home|
|Rhode Island Secretary of State||https://www.sos.ri.gov/|
|South Carolina Secretary of State|
|South Dakota Secretary of State||https://sdsos.gov/|
|Tennessee Secretary of State||https://sos.tn.gov/|
|Texas Secretary of State||https://www.sos.state.tx.us/index.shtml|
|Utah Secretary of State||https://www.utah.gov/index.html|
|Vermont Secretary of State||https://sos.vermont.gov/|
|Commonwealth of Virginia||https://www.virginia.gov/|
|Washington Secretary of State||https://www.sos.wa.gov/|
|West Virginia Secretary of State||https://sos.wv.gov/Pages/default.aspx|
|Wisconsin Secretary of State||https://sos.wi.gov/#:~:text=Sarah%20Godlewski%20is%20a%20fifth,to%20hold%20this%20esteemed%20position.|
|Wyoming Secretary of State||https://sos.wyo.gov/|