Jul 24, 2025
5 MIN READ
Management
Management
How to Stay Legal When Working With Influencers on Social Media
How to Stay Legal When Working With Influencers on Social Media
How to Stay Legal When Working With Influencers on Social Media
Amanda E. Clark
Amanda E. Clark
Amanda E. Clark
Amanda E. Clark
Guest Writer
Sections
Blog in Short ⏱️
Blog in Short ⏱️
A quick glance at the highlights—perfect for when you're short on time.
A quick glance at the highlights—perfect for when you're short on time.
If you're working with creators, here's what you really need to know to stay out of trouble (even if you don’t read the full blog):
Free product = a business deal. Yup, even gifting counts as compensation and needs proper disclosure.
Always use a contract. Even for a $100 collab, put it in writing like deliverables, timelines, payment, and disclosure terms.
Use #ad the right way. No burying it in hashtags or hiding it in videos. It has to be clear, upfront, and obvious.
You don’t own the content unless the contract says so. Want to reuse that post in an ad? Get permission in writing.
Run your campaigns through an LLC. It protects your personal assets if anything goes south.
Watch out for red flags. No contract? Suspicious metrics? No disclosure? Walk away.
Working with creators abroad? Local laws still apply. GDPR, CASL, ASA—don’t ignore them.
Keep records and monitor posts. Screenshots, contracts, and reports help if regulators ever come knocking.
Influencer marketing is like fire: powerful, flashy, and capable of cooking up serious results–or burning your brand to a crisp. Partnering with influencers can skyrocket visibility and sales, but skipping the legal fine print is a fast track to Federal Trade Commission (FTC) fines and public embarrassment.
According to eMarketer, influencer marketing is projected to top $10 billion globally in 2025. Now, with that kind of money in play, it’s easy to understand why regulators are paying attention. From unclear #ads to murky contract terms, what seems like a casual Instagram post can quickly become a legal landmine.
But don’t worry, that’s what we’re going to discuss today. Ultimately, we’re here to help you stay both relevant and compliant. By the end of this blog, you’ll know how to legally structure your influencer deals, write rock-solid contracts, and avoid the kind of viral attention no brand wants.
What Exactly Is an Influencer Partnership?
If you're sending someone free products, slipping them a discount code, or wiring them money in exchange for a post… guess what? You’ve entered influencer partnership territory. And yes, that means legal rules apply.
Here’s what counts as “compensation” under the law:
Cold hard cash (obviously)
Free products or services
Gift cards or store credit
Affiliate links or codes that generate commissions
It doesn’t matter if the influencer has 10 million followers or just 800. The FTC doesn’t grade on a curve when it comes to disclosure. Even a “just for fun” gifting arrangement can legally require transparency if there’s an expectation of promotion.
A good rule of thumb to follow? If there’s any benefit exchanged for publicity, it’s a business arrangement, not a casual shout-out. And that means it’s time to think about compliance.
FTC 101: Disclosures and Transparency
The FTC wants consumers to know when content is sponsored–and they’re not shy about enforcement. Influencers and brands alike are required to clearly disclose when a post is the result of a paid or compensated relationship.
Here’s what the FTC expects:
Use plain language. Things like “#ad” or “Sponsored” should be front and center in the status update, not hidden in a sea of hashtags.
Disclosures must be conspicuous–don’t bury them in the middle of a 30-line caption.
Video content? The disclosure must be verbal and/or on-screen long enough to be noticed.
No vague hints like “Thanks to BrandX”, it’s not enough.
Compliant Examples:
“Paid partnership with @YourBrand.”
“#ad This moisturizer is my new favorite!”
“Thanks @BrandName for sponsoring this post.”
Non-Compliant Examples:
“Thanks to @BrandName”
“So blessed!”
“Partner” (without clarification)
And remember, it’s not just the influencer who gets in trouble in this sort of situation. Brands are held responsible for making sure proper disclosures are made. If your influencer forgets to tag #ad, that ends up being on you, too.
Contracts: Always Get It in Writing. Always.
No matter how friendly your influencer is or how casual the collab seems, it’s imperative that you always get an agreement in writing. A solid influencer contract protects everyone involved and makes expectations crystal clear.
Here’s what to include:
Deliverables: What kind of content is expected? (e.g., 2 Instagram posts, 1 Reel, 3 Stories)
Timeline: When is the content due? How long should it remain live?
Content approval: Will the brand review posts before they go live?
Disclosure requirements: Spell out compliance language (#ad, paid partnership tools, etc.)
Payment terms: Flat fee? Commission? When is payment due?
Termination clause: What happens if either party wants out early?
Even for a $100 product exchange, a simple contract can save you from misunderstandings–or even worse, legal problems and time spent in court. Verbal agreements are great when making dinner plans, not structuring marketing deals.
Protecting Your Brand: Content Rights and Usage
One of the most frequently overlooked, yet important to a fault, parts of working with influencers is defining who owns the content. Just because your company paid for a post doesn’t mean you own it outright automatically. Without a clear agreement in place, the influencer could potentially still retain full rights to the videos, photos, captions, and the like.
If you want to repurpose influencer content; for instance, to showcase it in your email marketing, on your website, or even in paid ads, then you must negotiate a license. This should be outlined in the contract, specifying whether the content is for one-time use, limited-time use, or unrestricted across all platforms.
Also, skip the urge to casually screenshot and repost influencer content on your brand’s page without permission. That can land you in a legal gray zone, especially if you modify or promote the content. You must protect your brand by getting usage rights in writing before you hit “share.”
The Business Side of Working with an Influencer
Working with influencers isn’t just a marketing play; it’s a business transaction, and your legal structure should reflect that. If a campaign leads to a lawsuit, a copyright dispute, or a regulatory fine, you’ll want your personal assets shielded. That’s where operating under a Limited Liability Company (LLC) can be a lifesaver.
LLCs separate your personal finances from your business obligations. If you run multiple brands or ventures, it might be wise to create separate LLCs for each one to minimize business risk and limit cross-liability.
Don’t forget: every LLC needs an Employer Identification Number (EIN) assigned by the IRS for banking and taxes, as well as a registered agent to accept legal documents on your behalf. These basics are essential for staying compliant and credible.
Curious about your state’s rules? Here’s a helpful guide on forming an LLC in New York. Keep in mind this information is available for all of the 50 states, and it’s usually wise to form your LLC in the state where you do business.
Watch for Influencer Red Flags
Not all influencer partnerships are worth the risk. Stay sharp and avoid these warning signs:
The influencer resists or refuses to use #ad or other proper disclosures.
Their engagement metrics feel off–thousands of likes, but zero meaningful comments.
They’ve posted inflammatory, offensive, or brand-inconsistent content in the past.
They want to “keep it casual” and avoid signing a contract.
A polished feed doesn't guarantee a professional attitude behind the scenes. If something feels shady, it probably is. Better to walk away than to end up in a PR or legal nightmare.
International Influencers? Local Laws Apply
Your influencer is in Barcelona. You’re in San Diego. What jurisdiction governs the rules? The answer: both.
If your campaign targets or collects data from EU residents–even passively–then GDPR applies. That means you’ll need lawful data processing, proper disclosures, and possibly a Data Processing Agreement (DPA).
Canada, the UK, and Australia also have influencer-specific advertising laws (and FYI, so does California). What’s “fine” in the U.S. or even some of the states could violate regulations elsewhere.
Ultimately, even if you’re based stateside, your digital reach crosses borders. Make sure your contracts account for local laws, or at least consult legal counsel to cover jurisdictional gaps.
Ongoing Monitoring and Relationship Management
Once you’ve launched a campaign, the legal work isn’t over–it just shifts to maintenance.
Monitor influencer posts to ensure disclosures remain visible and compliant.
Keep a record of everything: signed contracts, screenshots of posts, and campaign performance reports.
Once a year, send influencers an updated compliance guide or run a quick training to reinforce expectations.
You don’t need to act like a babysitter or micromanager but you do need to document. That way, if regulators come calling, you can show you did your due diligence.
Influencer Marketing: Trust, But Verify
At the end of the day, influencer marketing is powerful, and it can truly move the needle for your brand. However, that’s only true if it’s handled with legal care. From clear disclosures and airtight contracts to the right business structure and ongoing oversight, every detail adds up to brand protection.
Transparency builds trust and offers significant levels of protection for your company and consumers alike. And trust drives long-term loyalty.
Therefore, the brands that prioritize ethics and clarity aren’t just safer. They’re smarter, more profitable, and realize greater levels of affinity with customers and regulators.
Influencer marketing is like fire: powerful, flashy, and capable of cooking up serious results–or burning your brand to a crisp. Partnering with influencers can skyrocket visibility and sales, but skipping the legal fine print is a fast track to Federal Trade Commission (FTC) fines and public embarrassment.
According to eMarketer, influencer marketing is projected to top $10 billion globally in 2025. Now, with that kind of money in play, it’s easy to understand why regulators are paying attention. From unclear #ads to murky contract terms, what seems like a casual Instagram post can quickly become a legal landmine.
But don’t worry, that’s what we’re going to discuss today. Ultimately, we’re here to help you stay both relevant and compliant. By the end of this blog, you’ll know how to legally structure your influencer deals, write rock-solid contracts, and avoid the kind of viral attention no brand wants.
What Exactly Is an Influencer Partnership?
If you're sending someone free products, slipping them a discount code, or wiring them money in exchange for a post… guess what? You’ve entered influencer partnership territory. And yes, that means legal rules apply.
Here’s what counts as “compensation” under the law:
Cold hard cash (obviously)
Free products or services
Gift cards or store credit
Affiliate links or codes that generate commissions
It doesn’t matter if the influencer has 10 million followers or just 800. The FTC doesn’t grade on a curve when it comes to disclosure. Even a “just for fun” gifting arrangement can legally require transparency if there’s an expectation of promotion.
A good rule of thumb to follow? If there’s any benefit exchanged for publicity, it’s a business arrangement, not a casual shout-out. And that means it’s time to think about compliance.
FTC 101: Disclosures and Transparency
The FTC wants consumers to know when content is sponsored–and they’re not shy about enforcement. Influencers and brands alike are required to clearly disclose when a post is the result of a paid or compensated relationship.
Here’s what the FTC expects:
Use plain language. Things like “#ad” or “Sponsored” should be front and center in the status update, not hidden in a sea of hashtags.
Disclosures must be conspicuous–don’t bury them in the middle of a 30-line caption.
Video content? The disclosure must be verbal and/or on-screen long enough to be noticed.
No vague hints like “Thanks to BrandX”, it’s not enough.
Compliant Examples:
“Paid partnership with @YourBrand.”
“#ad This moisturizer is my new favorite!”
“Thanks @BrandName for sponsoring this post.”
Non-Compliant Examples:
“Thanks to @BrandName”
“So blessed!”
“Partner” (without clarification)
And remember, it’s not just the influencer who gets in trouble in this sort of situation. Brands are held responsible for making sure proper disclosures are made. If your influencer forgets to tag #ad, that ends up being on you, too.
Contracts: Always Get It in Writing. Always.
No matter how friendly your influencer is or how casual the collab seems, it’s imperative that you always get an agreement in writing. A solid influencer contract protects everyone involved and makes expectations crystal clear.
Here’s what to include:
Deliverables: What kind of content is expected? (e.g., 2 Instagram posts, 1 Reel, 3 Stories)
Timeline: When is the content due? How long should it remain live?
Content approval: Will the brand review posts before they go live?
Disclosure requirements: Spell out compliance language (#ad, paid partnership tools, etc.)
Payment terms: Flat fee? Commission? When is payment due?
Termination clause: What happens if either party wants out early?
Even for a $100 product exchange, a simple contract can save you from misunderstandings–or even worse, legal problems and time spent in court. Verbal agreements are great when making dinner plans, not structuring marketing deals.
Protecting Your Brand: Content Rights and Usage
One of the most frequently overlooked, yet important to a fault, parts of working with influencers is defining who owns the content. Just because your company paid for a post doesn’t mean you own it outright automatically. Without a clear agreement in place, the influencer could potentially still retain full rights to the videos, photos, captions, and the like.
If you want to repurpose influencer content; for instance, to showcase it in your email marketing, on your website, or even in paid ads, then you must negotiate a license. This should be outlined in the contract, specifying whether the content is for one-time use, limited-time use, or unrestricted across all platforms.
Also, skip the urge to casually screenshot and repost influencer content on your brand’s page without permission. That can land you in a legal gray zone, especially if you modify or promote the content. You must protect your brand by getting usage rights in writing before you hit “share.”
The Business Side of Working with an Influencer
Working with influencers isn’t just a marketing play; it’s a business transaction, and your legal structure should reflect that. If a campaign leads to a lawsuit, a copyright dispute, or a regulatory fine, you’ll want your personal assets shielded. That’s where operating under a Limited Liability Company (LLC) can be a lifesaver.
LLCs separate your personal finances from your business obligations. If you run multiple brands or ventures, it might be wise to create separate LLCs for each one to minimize business risk and limit cross-liability.
Don’t forget: every LLC needs an Employer Identification Number (EIN) assigned by the IRS for banking and taxes, as well as a registered agent to accept legal documents on your behalf. These basics are essential for staying compliant and credible.
Curious about your state’s rules? Here’s a helpful guide on forming an LLC in New York. Keep in mind this information is available for all of the 50 states, and it’s usually wise to form your LLC in the state where you do business.
Watch for Influencer Red Flags
Not all influencer partnerships are worth the risk. Stay sharp and avoid these warning signs:
The influencer resists or refuses to use #ad or other proper disclosures.
Their engagement metrics feel off–thousands of likes, but zero meaningful comments.
They’ve posted inflammatory, offensive, or brand-inconsistent content in the past.
They want to “keep it casual” and avoid signing a contract.
A polished feed doesn't guarantee a professional attitude behind the scenes. If something feels shady, it probably is. Better to walk away than to end up in a PR or legal nightmare.
International Influencers? Local Laws Apply
Your influencer is in Barcelona. You’re in San Diego. What jurisdiction governs the rules? The answer: both.
If your campaign targets or collects data from EU residents–even passively–then GDPR applies. That means you’ll need lawful data processing, proper disclosures, and possibly a Data Processing Agreement (DPA).
Canada, the UK, and Australia also have influencer-specific advertising laws (and FYI, so does California). What’s “fine” in the U.S. or even some of the states could violate regulations elsewhere.
Ultimately, even if you’re based stateside, your digital reach crosses borders. Make sure your contracts account for local laws, or at least consult legal counsel to cover jurisdictional gaps.
Ongoing Monitoring and Relationship Management
Once you’ve launched a campaign, the legal work isn’t over–it just shifts to maintenance.
Monitor influencer posts to ensure disclosures remain visible and compliant.
Keep a record of everything: signed contracts, screenshots of posts, and campaign performance reports.
Once a year, send influencers an updated compliance guide or run a quick training to reinforce expectations.
You don’t need to act like a babysitter or micromanager but you do need to document. That way, if regulators come calling, you can show you did your due diligence.
Influencer Marketing: Trust, But Verify
At the end of the day, influencer marketing is powerful, and it can truly move the needle for your brand. However, that’s only true if it’s handled with legal care. From clear disclosures and airtight contracts to the right business structure and ongoing oversight, every detail adds up to brand protection.
Transparency builds trust and offers significant levels of protection for your company and consumers alike. And trust drives long-term loyalty.
Therefore, the brands that prioritize ethics and clarity aren’t just safer. They’re smarter, more profitable, and realize greater levels of affinity with customers and regulators.
Frequently Asked Questions
Do I need a contract even for a small influencer collab or gifting campaign?
Do I need a contract even for a small influencer collab or gifting campaign?
Do I need a contract even for a small influencer collab or gifting campaign?
What kind of influencer disclosures are legally required by the FTC?
What kind of influencer disclosures are legally required by the FTC?
What kind of influencer disclosures are legally required by the FTC?
Can I reuse an influencer’s content for ads or my website?
Can I reuse an influencer’s content for ads or my website?
Can I reuse an influencer’s content for ads or my website?
What legal protections do I need for my brand when running campaigns?
What legal protections do I need for my brand when running campaigns?
What legal protections do I need for my brand when running campaigns?
If I hire an influencer from another country, which laws do I follow?
If I hire an influencer from another country, which laws do I follow?
If I hire an influencer from another country, which laws do I follow?
Author Bio
Author Bio
Amanda E. Clark
Amanda E. Clark
Amanda E. Clark is a contributing writer to LLC University. She has appeared as a subject matter expert on panels about content and social media marketing.
Amanda E. Clark is a contributing writer to LLC University. She has appeared as a subject matter expert on panels about content and social media marketing.
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Join over 15000+ SocialiQ users who have installed this free Chrome extension to search, analyze, save, and contact influencers directly on TikTok, YouTube, and Instagram.
20K+ Active Users
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Join over 15000+ SocialiQ users who have installed this free Chrome extension to search, analyze, save, and contact influencers directly on TikTok, YouTube, and Instagram.
20K+ Active Users
May be Later
Join over 15000+ SocialiQ users who have installed this free Chrome extension to search, analyze, save, and contact influencers directly on TikTok, YouTube, and Instagram.
20K+ Active Users
May be Later