What exposure do you have if your podcast co-host says or does something that brings liability?
Hi, I'm attorney Gordon Firemark, and this is Asked and Answered, where I answer your entertainment law questions, to help you take your career and business to the next level.
This question comes in from my friend Joe. He says:
” you spoke of co-hosts possibly owning a part of the podcast if there's no agreement in place. What about the liability of what one host says. Could some ofthe other co-hosts be held liable? Could someone construe the podcast as a business if money was involved, and then sue it as a business? ”
He goes on to mention,
” I know a guy that makes over $1,000 a month on affiliate links. Openly says he wants to pay the other host… I wonder about backup withholdings and the like.
A: Well Joe, this is a really great question, and it applies not only to podcasters, but also to bloggers, youtubers, or any other folks who might work as a team without a clear agreement in place… The bottom line is that in the law, “If it looks like a duck, it’ll be treated like a duck.”
To the outside world, co-hosts will often look like partners, unless they’ve got some documentation proving otherwise… and Partners have “joint and several liability” for the business’ debts and obligations. Joint and Several means that each partner is responsible for the WHOLE amount of any damages. Then, the partners can duke it out later over who's responsible in what proportion, and stuff like that….
So, yes, a co-host could very well be liable for the full amount of any damages caused by the other co-host’s intentional or just negligent acts or omissions.
And, Yes, it IS going to look like a business… Almost always… If there’s any kind of call to action, and some potential for economic gain. In my book, I talk about the Philadelphia blogger tax that required a blogger who’d received $0.78 from google adsense placement on his site to pay several hundred dollars in city business tax. You made money, you’re a business, you pay taxes, and (by extension), you’ll be treated like a business for all purposes.
The good news about backup withholding is that if the co-host is a partner, the partnership is supposed to issue a form K-1, and partners pay on their respective shares of income on a pass-thru basis. So, and check with your accountant on this, backup withholding might not really be an issue, unless one of you is in
If not partners, the co=host is likely an independent contractor, (which has other perils in the copyright arena), and the payer is supposed to issue and file 1099-misc forms reporting the payments, if they exceed $600 (I think…again, check with your accountant or tax professional)
Finally, the liability concerns you raise are strong reasons for forming an LLC to insulate the owners of the company from these and other kinds of liability that could befall them. It’s also a good argument for insurance coverage.
Though very few podcasters even explore the insurance option, it’s something most other media businesses wouldn’t think about operating without.
Bottom line, a podcast will often look like a business, so it’s likely to be treated like one in the eyes of the law.
So, isn’t it time YOU started treating it like one, too? Get your ducks in a row, and if there’s any doubt, Run it by legal, just like the more mainstream media businesses do.
Fortunately, that’s not something that has to cost a small fortune (or a big one). Visit https://firemark.com/podlaw to see what I’m talking about.
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