YouTuber Law: Do I need to incorporate my YouTube business?
Yes. Well that was easy.
Lior Leser, Esq.
Technology, Internet and Software Law
Look … if you’re serious about turning your YouTube hobby into a business, you have no logical choice but to incorporate.
Your starting producing content. That’s your focus. You’re not thinking about the bigger picture. Where will this YouTube hobby go.
You’re gaining subscribers, racking up viewers and stating to gain some ad-based revenue. Why do you need to setup a corporation?
As you build your audience, you’re making investments. You’re investing in new equipment, you’re investing in hardware and software, you’re investing in training. You’re also facing expenses. Depending on your particular YouTube business that might involve purchasing products for review, car and travel expenses. Maybe food and entertainment.
Absent setting up a Company independent from you, how will you account for such investments hardware and equipment. If you had a company you could depreciate the costs over time. How can you account for expenses in travel and food? If you had a company, you could write off expenses against your ad-based revenue.
But lets go a little further. What happens as your YouTube business grows? When you need to lease out a space. When you need to hire employees. If you hd a company, you could eliminate your personal liability in the event business slows down. You would be able to limit liability to the company alone.
And what if you needed to borrow money to grow your business. You dint want to use personal credit cards. If you had a company you could leverage your ad-based revenues against loans. Corporate loans.
But will you face higher taxes? No. If you setup a subchapter S corporation, you will not face a corporate tax. You’ll be able to pay yourself a reasonable salary, purchase healthcare at a better rate and right off expenses to reduce your taxable income. Yes, you will have the added expense of filing corporate tax returns but you will not be paying taxes.
At the end .. while there is some limited expenses in forming a corporation for your YouTube business, the advantages far outweigh them.
So go online, form a new company today and build the corporate basis that will allow you YouTube company to flourish.