Should I Start an LLC for My News Website?

Starting a limited liability company (LLC) for your news website can provide several benefits.

Most importantly, an LLC structure offers limited liability to its owners, which can protect their personal assets from lawsuits and creditors.

For a news website, lawsuits can arise from things like failing to keep up with debt repayments, disputes regarding which services were offered as part of a contract, and defamation (i.e., from the topic of one of your news articles).

LLCs are also affordable, highly flexible (from a tax point-of-view), and can make your news website seem more credible.

Recommended: Use Northwest to form an LLC for $29 (plus state fees).

A tablet with a news website on its screen

Do I Need an LLC for a News Website?

LLCs are a simple and inexpensive way to protect your personal assets and save money on taxes.

You should start an LLC when there's any risk involved in your business and/or when your business could benefit from tax options and increased credibility.

LLC Benefits for a News Website

By starting an LLC for your news website, you can:

Protect your savings, car, and house with limited liability protection
Have more tax benefits and options
Increase your business’s credibility

Limited Liability Protection

LLCs provide limited liability protection. This means your personal assets (e.g., car, house, bank account) are protected in the event your business is sued or if it defaults on a debt.

News websites will benefit from liability protection because of the risk of copyright and trademark infringement, defamation, libel, and data breaches.

Example 1: Your news website is sued by the vendor that supplies printing software who alleges it hasn’t been paid for services rendered. You believe those services were related to installing the software and so were included in the software price. If the court sides with the vendor, compensation can only be made from business assets. With an LLC, your personal assets would be shielded from the judgment.

Example 2: Your news website is unable to keep up payments on an equipment loan and falls into delinquency. The lender sues. If your business is set up as an LLC, the lender could only levy on your business assets. Your personal assets are protected.

Example 3: You are forced to close your news website after facing a multi-million-dollar claim for defamation. The business has negative equity, however, and so all creditors cannot be paid. Nonetheless, these unpaid creditors cannot go after your personal assets, which are protected by the limited liability shield of your LLC.

An LLC will also protect your personal assets in the event of commercial bankruptcy or loan default.

To maintain your LLC's limited liability protection, you must maintain your LLC's corporate veil.

LLC Tax Benefits and Options for a News Website

LLCs, by default, are taxed as a pass-through entity, just like a sole proprietorship or partnership. This means that the business's net income passes through to the owner's individual tax return.

The business’s net income is then subject to income taxes (based on the owner's tax bracket) and self-employment taxes.

Sole proprietorships and partnerships are taxed in a similar way to LLCs, but they do not offer limited liability protection or other tax options.

S Corp Option for LLCs

An S corporation (S corp) is an IRS tax status that an LLC can elect. S corp status allows business owners to be treated as employees of the business (for tax purposes).

S corp tax status can reduce self-employment taxes and will allow business owners to contribute pre-tax dollars to 401k or health insurance premiums.

The S corp status requires that the business pay the employee-owner(s) a reasonable salary for the work they perform.

In addition, the business might need to spend more on accounting, bookkeeping, and payroll services. To offset these costs, you'd need to be saving about $2,000 a year on taxes.

We estimate that if a news website owner can pay themselves a reasonable salary and at least $10,000 in distributions each year, they could benefit from S corp status.

You can start an S corp when you form your LLC. Our How to Start an S Corp guide will lead you through the process.

Credibility and Consumer Trust

News websites rely on consumer trust. Credibility plays a key role in creating and maintaining any business.

Businesses gain consumer trust simply by forming an LLC.

A growing business can also benefit from the credibility of an LLC when applying for small business loans, grants, and credit.

Northwest will start an LLC for you for just $29 (plus state fees).

Get Started

How to Form an LLC

Forming an LLC is easy. There are two options for forming your LLC:

You can hire a professional LLC formation service to set up your LLC for a small fee
Or, you can choose your state from the list below to start an LLC yourself

Select Your State

For most new business owners, the best state to form an LLC in is the state where you live and where you plan to conduct your business.

Do LLCs Need Insurance?

All businesses need insurance to protect their business assets — even LLCs. This is because the limited liability protection from an LLC protects your personal assets, not your business assets.

In particular, a news website needs liability insurance to protect against personal injury claims of libel. General liability insurance also covers damage to property and bodily injury.

Common Situations Business Insurance May Cover for a News Website

Example 1: A visitor to your place of business slips on a wet restroom floor, breaks an arm, and decides to sue. General liability insurance would cover your legal defense costs and any required settlement.

Example 2: As one of your reporters rushes to an interview with a local business leader, she accidentally runs into the interviewee on the way to the meeting room and knocks him to the floor. The business leader breaks a wrist in the fall and demands your business pay for his medical treatment. General liability insurance would cover his medical expenses.

Example 3: The owner of a competing news website sues you for libel. While you disagree with the accusation, you know you need an attorney to protect your business. General liability insurance would pay for your legal defense and any required settlement.

Other Types of Coverage News Website Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all news websites should obtain.

Commercial Auto Insurance

Since you will be driving your business vehicle on public roadways, you are mandated by the state to carry a commercial auto policy. Auto insurance protects not only your vehicle but any liability you may have in an accident. Your personal car insurance will not cover you if you are driving the business vehicle, even if you are off duty.

Commercial Property Insurance

If you own your location instead of renting, you need commercial property insurance to protect the building. If your business is based out of your home, your homeowners' insurance will not cover the home when it is being used for commercial purposes. Property insurance also covers items owned by your business.

News websites invest heavily in the equipment that is used to complete their work. Be sure that you have enough coverage to replace all of your equipment in the case of a loss. This coverage is generally offered in a Business Owner Policy (BOP).

In addition to the policies outlined above, there are a few other types of coverage your news website may require depending on certain aspects of your operations. Some of these might not apply to you, so be sure to ask your agent which policies are right for your business.

Workers' Compensation Insurance

If your news website has any employees (full-time or part-time), you are legally required to carry workers’ compensation insurance. This type of coverage will help compensate your employees in the case that they get injured on the job.

Read more about workers’ compensation insurance.

Business Interruption Insurance

In the event of a fire, flood, or other catastrophes, there is a good chance your business operations will be halted for some time. Business interruption coverage is designed to help you recoup a portion of the revenue your business would lose due to the inability to operate.

This type of insurance is typically included in a business owner’s policy.

Commercial Umbrella Insurance

Umbrella coverage allows you to extend above and beyond the standard limits of your other business insurance policies. If you are faced with a large lawsuit or other claim situation, there’s a possibility that the coverage limits of your standard policies will be insufficient. In this case, your umbrella policy will allow you to surpass these limits.

Should I Start an LLC FAQ

Choosing the right business structure depends on your business’s unique circumstances and needs. However, unless your business is very low risk (like a hobby), an LLC is likely the better option.

Visit our LLC vs. Sole Proprietorship guide to learn more.

At a minimum, you’ll need general liability insurance and workers' compensation insurance.

Read our Business Insurance article for more info.

Starting a news website won’t take a lot of money. Setting up a website can be done for around one hundred dollars. The chief expense will be in news gathering, i.e. paying reporters and editors.

Visit our How to Start a News Website guide to learn more about the costs of starting and maintaining this business.

The ongoing expenses of running a news website include salaries and fees, graphic design, website maintenance, advertising, and insurance.

Learn more about running a news website.

News websites make money from advertisers who pay to have their products and services advertised on the website. Some also make money from having a paywall to access premium content.

Learn more about starting a news website.

News websites deliver news as it breaks. While television remains the most popular source of news, online news is quickly catching up.

News websites can be very profitable, earning up to seven figures in revenue. As internet accessibility expands, the opportunities for news websites continue to grow.

Learn more about starting a news website.