Should I Start an LLC for My Beekeeping Business?

Starting a limited liability company (LLC) for your beekeeping business can provide several benefits.

Most importantly, an LLC structure offers limited liability to its owners, which can protect their personal assets from lawsuits and creditors.

For a beekeeping business, lawsuits can arise from things like bees injuring a customer or from a nearby business or resident filing a nuisance complaint.

LLCs are also affordable, highly flexible (from a tax point-of-view), and can make your beekeeping business seem more credible.

Recommended: Use Northwest to form an LLC for $29 (plus state fees).

Do I Need an LLC for a Beekeeping Business?

LLCs are a simple and inexpensive way to protect your personal assets and save money on taxes.

You should form an LLC when there's any risk involved in your business and/or when your business could benefit from tax options and increased credibility.

LLC Benefits for a Beekeeping Business

By starting an LLC for your beekeeping business, you can:

Protect your savings, car, and house with limited liability protection
Have more tax benefits and options
Increase your business’s credibility

Limited Liability Protection

LLCs provide limited liability protection. This means your personal assets (e.g., car, house, bank account) are protected in the event your business is sued or if it defaults on a debt.

Beekeeping businesses will benefit from liability protection because of the risks associated with the safety of their employees and customers when coming in contact with bees, as well as general safety involved in the processes of getting products to customers.

Example 1: While an employee is attempting to extract some honey from one of the beehives, the bees inside are accidentally set free and sting a nearby customer. The customer ends up having a severe allergic reaction and dies of anaphylaxis because he does not receive the medical treatment he needs in time. Limited liability would protect your personal assets from being used to satisfy any compensation the business might have to pay the family in damages.

Example 2: You set up your beekeeping business in your back garden in order to save startup costs. However, one of your neighbors files a nuisance lawsuit against your business, arguing that its operation prevents him from enjoying his property due to fear of being stung in his garden. Regardless of the claim’s validity, if your business was found liable for damages, these could not be levied against your personal assets.

Example 3: After accepting a large loan in order to get your beekeeping business off the ground, a streak of bad luck means that your business is unable to repay the loan. As a result, the lender decides to sue your business for defaulting on the loan. In this scenario, your liability to compensate the lender can only be imposed insofar as your business’s assets.

Example 4: While a customer is visiting your business location, they are accidentally stung by a bee which results in a severe allergic reaction. Your business may become financially liable for covering the guest’s medical costs.

An LLC will also protect your personal assets in the event of commercial bankruptcy or loan default.

To maintain your LLC's limited liability protection, you must maintain your LLC's corporate veil.

LLC Tax Benefits and Options for a Beekeeping Business

LLCs, by default, are taxed as a pass-through entity, just like a sole proprietorship or partnership. This means that the business's net income passes through to the owner's individual tax return.

The business’s net income is then subject to income taxes (based on the owner's tax bracket) and self-employment taxes.

Sole proprietorships and partnerships are taxed in a similar way to LLCs, but they do not offer limited liability protection or other tax options.

S Corp Option for LLCs

An S corporation (S corp) is an IRS tax status that an LLC can elect. S corp status allows business owners to be treated as employees of the business (for tax purposes).

S corp tax status can reduce self-employment taxes and will allow business owners to contribute pre-tax dollars to 401k or health insurance premiums.

The S corp status requires that the business pay the employee-owner(s) a reasonable salary for the work they perform.

In addition, the business might need to spend more on accounting, bookkeeping, and payroll services. To offset these costs, you'd need to be saving about $2,000 a year on taxes.

We estimate that if a beekeeping business owner can pay themselves a reasonable salary and at least $10,000 in distributions each year, they could benefit from S corp status.

You can start an S corp when you form your LLC. Our How to Start an S Corp guide will lead you through the process.

Credibility and Consumer Trust

Beekeeping businesses rely on consumer trust. Credibility plays a key role in creating and maintaining any business.

Businesses gain consumer trust simply by forming an LLC.

A growing business can also benefit from the credibility of an LLC when applying for small business loans, grants, and credit.

Northwest will start an LLC for you for just $29 (plus state fees).

Get Started

How to Form an LLC

Forming an LLC is easy. There are two options for forming your LLC:

You can hire a professional LLC formation service to set up your LLC for a small fee
Or, you can choose your state from the list below to start an LLC yourself

Select Your State

For most new business owners, the best state to form an LLC in is the state where you live and where you plan to conduct your business.

Do LLCs Need Insurance?

LLCs, just like all other businesses, need insurance. Insurance is important for your beekeeping business because it provides protection for your assets (such as business property, bee hives, and honey extractors).

The limited liability protection of LLCs is different in this way, since it provides protection for your personal assets, whereas insurance protects those belonging to your business.

Common Situations Business Insurance May Cover for a Beekeeping Business

Example 1: A client comes by to inspect the premises and watch some of the beekeeping action. He stays back from the hives but ends up getting stung by a bee anyway. The client discovers that he is severely allergic to bees, requiring serious medical attention. In the event that your business is found liable, general liability insurance would probably help to cover court-mandated damages or a settlement.

Example 2: An independent service transports your bees and equipment to another site. One of the transporters doesn’t wear the proper beekeeping gear, and when he accidentally drops a container full of bees, he is swarmed and stung many times. General liability insurance would probably help cover the damages to the transporter or a settlement agreed upon by your business and the transporter’s lawyer.

Example 3: Some children visit your farm on a field trip, but one child is so frightened that she runs away, falls, and injures her arm. If found liable, your business would probably be covered for damages or settlements through general liability insurance.

Other Types of Coverage Beekeeping Businesses Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all beekeeping businesses should obtain.

Commercial Property Insurance

A lot of special care and equipment go into professional beekeeping. Your delicate instruments, containers, and bee populations are critical to the ongoing success of your operation. In the event of a fire or violent weather damage, a commercial property policy can help cover any sustained losses. This policy is a must-have for many businesses, and it can keep a company afloat when equipment, inventory, or any owned real estate is damaged.

Business Interruption Insurance

Business interruption insurance is an important policy for beekeepers, who depend on the ongoing productivity of their bee populations to make products for consumers. In the event that a disaster strikes, like a tornado or a fire, it may not be enough to have commercial property coverage. Business interruption policies allow a company to recoup losses suffered during the time spent re-establishing the business and starting up again.

Estimated losses in revenue, training for new workers to use complex machinery, and even temporary relocation costs are all examples of items potentially covered by business interruption insurance.

Product Liability Insurance

Most beekeeping operations profit by acquiring honey and other bee-based materials, which they can turn around and sell. If your products are found responsible for damages of any kind to a customer, it can lead to a serious lawsuit. Keep your business covered in the event of product-caused damages with a product liability policy. You never know exactly how your inventory will be used or abused by consumers, so this is almost always a smart purchase for businesses that depend on the sale of material goods.

Home-Based Business Insurance

If you run your beekeeping business from home, you may find that standard home insurance does not apply to business-related accidents or injuries occurring on your home property. Home-based business insurance is designed for exactly this situation, providing commercial liability coverage to businesses that operate from home. Business owners shouldn’t feel obligated to pay huge costs for renting or purchasing a separate place to conduct their work. This policy can be obtained as part of a business owner’s policy or added to home insurance as a rider extension.

Should I Start an LLC FAQ

Choosing the right business structure depends on your business’s unique circumstances and needs. However, unless your business is very low risk (like a hobby), an LLC is likely the better option.

Visit our LLC vs. Sole Proprietorship guide to learn more.

At a minimum, you’ll need general liability insurance and commercial property insurance.

Read our Business Insurance for Beekeeping Businesses article for more info.

The startup cost for a beekeeping business is relatively manageable; the largest component of this cost simply being the land on which you plan to keep your bees.

In addition to this, plan to allocate at least $1,000 for all the necessary equipment you need (such as a hive tool, honey extractor, and bee hives).

Visit our How to Start a Beekeeping Business guide to learn more about the costs of starting and maintaining this business.

Ongoing expenses can be kept to a minimum with well-maintained bee colonies that can last up to 30 years.

Learn more about running a beekeeping business.

Beekeepers earn profit through the sale of honey and other bee-related products. Depending on size and location, some beekeepers may be hired for commercial crop pollination.

Learn more about starting a beekeeping business.

Beekeepers do more than just facilitate the production of honey for consumers. Beekeeping involves getting to know the bees, knowing their behavior, and the environment that surrounds them. In turn, beekeepers meet public demand for products made with the assistance of beehives.

Beekeepers with enough colonies are capable of profiting as much as $90,000 in a year.

Learn more about starting a beekeeping business.