Influencers! Are you ready to take your social media empire to the next level? Well, before you do, there’s one important step you need to take: formalize your business structure.

You might be thinking, “But I’m just an influencer, do I really need to do this?” The short answer is yes. And let me tell you, not doing so can lead to serious consequences.

First, let’s talk about the benefits of formalizing your business structure. One of the most popular options for small businesses is creating a Limited Liability Company (LLC) or corporation. An LLC is a business structure that combines the liability protection of a corporation with the tax benefits of a sole proprietorship or partnership. It is considered a separate legal entity from its owners, called members. On the other hand, a corporation is a separate legal entity from its shareholders and is typically used by larger businesses.
Both LLC and corporation provide protection from personal liability and give you the ability to raise capital, have tax benefits and make your business look more professional and credible to potential clients and partners.

Now, let’s talk about the cons. One of the most significant downsides is that it can be a bit of a hassle to set up and maintain. But trust us; it’s worth it in the long run. Plus, many affordable online services can make the process a breeze.

But don’t just take our word for it; let’s look at a few real-life examples of what can go wrong if you don’t formalize your business structure.

“The Uninsured Influencer”
Let’s say you’re a beauty influencer and host a makeup workshop. One of the attendees gets a terrible allergic reaction and decides to sue you. If you don’t have a formal business structure, your personal assets (like your savings account or car) could be at risk, and you may have to pay legal fees out of pocket. In addition, if you don’t have liability insurance, you will be fully responsible for any damages awarded by the court.

“The Unincorporated Influencer”
Let’s say you’re a fashion influencer and decide to collaborate with a clothing brand. But since you don’t have a formal business structure, you can’t sign a legally binding contract. This could lead to disputes over terms and compensation and makes it harder for you to enforce the terms of the agreement or protect your intellectual property.

As you can see, formalizing your business structure is crucial for protecting yourself and your business. So don’t wait; take steps to make it happen today. And remember, a little bit of paperwork now can save you a lot of headaches later.

P.S. If you need help, our team is here to guide you through the process!

Melia Arnett-Archie, Esq
Founder, Modern Creators Law