For the next few weeks of your self-publishing journey, your primary task is to write. However, in the interest of helping you learn from my mistakes, if you’re planning to create an LLC or small publishing company to help manage your books, now is the time to get that ball rolling!
*Disclaimer: I am not a lawyer. This is not legal advice. This is just an anecdotal explanation of when and why you might want to consider an LLC during your self-publishing timeline. (Also, this information is specific to the United States.)
What is an LLC?
According to legalzoom, “A limited liability company (LLC) combines elements of a partnership, sole proprietorship, and a corporation to ensure that the owners of the company are not personally liable for their company’s debts or liabilities.”
In other words, it’s a legal entity that helps separate your work finances (your writing) from your personal finances (everything else). To simplify things, an LLC allows you to have a tax number (Employer Identification Number) that is separate from your personal number (Social Security Number).
Why does it matter? Honestly, if you’re only planning to publish for fun, it probably doesn’t. However, if you’re hoping to make writing your career, it’s essentially just a way to protect yourself from yourself. For example, if you write non-fiction, and someone sues you for including their likeness in your book, an LLC — in theory — can help protect your personal assets from your business assets.
But, once again, I am not a legal professional, so before you make any decisions, schedule a meeting with a qualified individual who can answer your questions as they pertain specifically to your situation.
Why did I get an LLC?
For me, writing is a career move. I have two degrees in English and language-related fields, and although I have another job, writing has always been the end-goal. I chose self-publishing/indie publishing because it allows me to have more room for flexibility and experimentation. It also gives me complete creative control of my projects.
By creating an LLC, I became the sole proprietor of an independent publishing company called Grey Cap Books. For the time being, Grey Cap Books is exclusively used for my own projects, but in the future, the entity could be opened up to publish other authors as well.
Additionally, having an independent publishing company should allow me to use printers and distributors outside of Amazon’s Kindle Direct Publishing (think brick-and-mortar bookstores). But as you’ve probably noticed, for the past month, my novel has only been available on Amazon.
Why? Because I chose to hire a lawyer instead of filing myself, and I grossly underestimated how much longer it would take them to complete the process.
Hiring a Lawyer to Create Your LLC
Now, I won’t lie. Retrospectively, I wish I had just done this myself. But with the initial anxiety over not wanting to make a legal faux pas, I decided everything would be safer in the hands of a professional. So, I found a local law office with an amazing reputation and went for it.
I began the process just before Christmas, and as of April 21st, it’s still not finished yet.
That’s right. Four months. And on Friday, I just got the paperwork that will allow me to open up a bank account for my business . . . after I called them to ask them what the heck was going on. (Honestly, I think they forgot I existed.) And hey, now that I do have some of my paperwork, maybe next week, I’ll be able to share some fun new advice regarding opening a business account while banks are closed due to COVID-19 . . . Adventures in the Drive-Through Lane?
If you file the paperwork yourself, New York State LLCs take around two months to create. It’s definitely cheaper, but there are a few nitty gritty details that you have to stay on top of. For example, you have to do strange little tasks, like post announcements in print newspapers for a certain number of consecutive days, and hold a minutes meeting with yourself, to sign off on yourself signing off on your own decisions. (That was confusing.) Needless to say, the process is a little antiquated and can be overwhelming for someone who’s unfamiliar with legal jargon.
Word of advice: In my case, going with an enormous law firm was a mistake. Because I’m such a small business, I got the feeling that I wasn’t a priority, so I just kind of slipped under their radar. Ultimately, if you don’t feel comfortable filing for an LLC on your own, consider seeking out a smaller firm which can devote time to all of their clients, no matter how small the project may be.
In the end, if you decide to create an LLC, don’t make the same mistake I did. Be sure to give yourself — or your lawyer — plenty of time to get everything finalized well before your release date.
Good luck on your self-publishing/indie journey, and feel free to share your progress and blog links in the comments section below!
1 thought on “Week 6: Creating an LLC”