Should I Start an LLC for My Online Magazine?

Starting a limited liability company (LLC) for your online magazine 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 an online magazine, lawsuits can arise from things like publishing an issue that plagiarized copyrighted content or releasing a negative article about a public figure that is interpreted as libel.

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

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

Do I Need an LLC for an Online Magazine?

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 an Online Magazine

By starting an LLC for your online magazine, 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.

Online magazines will benefit from liability protection because of the risk of copyright and trademark infringement, libel, and financial data breaches.

Example 1: One of the illustrators for your online magazine mistakenly uses a copyrighted image in one of your publications and the copyright holder sues your business for this infringement as a consequence. Your personal assets would be protected by limited liability in the event the copyright holder decides to sue your business.

Example 2: In one of the articles published in your online magazine, a controversial public figure is discussed in a derogatory way. This figure discovers this article and interprets it as slander, arguing that his reputation has been severely negatively affected. In the lawsuit that follows, limited liability would protect you from being held personally responsible.

Example 3: You decide to fire a writer for your online magazine after discovering he has been inflating the word counts of his work in order to get paid more. In addition to this, you decide to keep his final paycheck as punishment for his behavior. This prompts the writer to sue your business for withholding his salary. Any liability imposed on your business to pay compensation to the plaintiff cannot be levied against you personally.

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 an Online Magazine

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 an online magazine 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

Online magazines 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.

Online magazines are a type of print publication, which means they may face accusations of libel in addition to other general business risks (property damage, etc.).

Common Situations Business Insurance May Cover for an Online Magazine

Example 1: While visiting your place of business, an investor slips on a wet spot in your lobby, hits her head on the tile floor as she falls, and suffers a concussion. She decides to sue your business for not marking the wet floor. General liability insurance would pay for your legal defense.

Example 2: The owner of a competing online magazine sues your business for libel. While you disagree with the accusation, you know you need a lawyer to protect your company. General liability insurance would cover your legal fees and any required settlement.

Example 3: You want to expand your business into a new building. The landlord requires proof of liability insurance. A general liability policy should cover this requirement.

Other Types of Coverage Online Magazines 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 online magazines should obtain.

Professional Liability Insurance

While you strive to produce quality work that satisfies your customers, there’s always a chance someone might decide your professional advice or recommendations caused them harm. If a client sues your business for negligence, professional liability insurance would cover your legal fees and any required settlement.

Commercial Property Insurance

You made a major investment in the equipment and supplies you use to run your online magazine. In the event of a fire, theft, or natural disaster, commercial property insurance would cover the cost of repairing or replacing your business-related property. This includes structural damage to your building as well as the business materials stored there.

Workers’ Compensation Insurance

If you have any employees working for your online magazine, most states will require you to carry workers’ compensation insurance for your part-time and full-time workers. This coverage protects your employees if they become injured at work or fall ill after a work-related accident. It not only covers an employee’s medical bills and lost wages if they need time to recover but also any disability or death benefits stemming from a workplace accident.

Commercial Umbrella Insurance

While your general liability insurance policy covers most claims, some accidents or lawsuits may be so catastrophic that they threaten to exhaust the limits of your primary coverage. Commercial umbrella insurance protects you from paying out-of-pocket for any legal fees and awarded damages that exceed your primary policy.

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 if you have employees.

Read our Online Magazine Business Insurance article for more info.

While not recommended, it is completely possible to start your online magazine without spending a cent. You can publish a website on sites such as WordPress, plus write and promote your articles by yourself. Should you wish to improve the overall professionalism of your magazine, you can also hire experts in graphic design, writing, photography, web development, illustration, and marketing.

Visit our How to Start an Online Magazine guide to learn more about the costs of starting and maintaining this business.

The ongoing expenses of running an online magazine business include website maintenance, utilities, labor, marketing, and insurance.

Learn more about running an online magazine.

Online magazines make money from advertisements and affiliate links. Some magazines also make money from subscription fees that allow access to premium content.

Learn more about starting an online magazine.

Online magazines, also known as webzines or digital magazines, are increasingly popular with readers. People’s preferences are shifting from paper content to online content.

The online magazine market has a low barrier to entry. Online magazine businesses can, therefore, start small and scale up very quickly.

With low overhead costs, online magazine businesses can earn in excess of $1 million in annual revenue.

Learn more about starting an online magazine.