Should I Start an LLC for My Comic Book Store?

Starting a limited liability company (LLC) for your comic book store 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 comic book store, lawsuits can arise from things like trademark and copyright infringements (e.g., your store sells a comic book that — unbeknown to you — has infringed on another artist’s work).

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

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

Do I Need an LLC for a Comic Book Store?

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 Comic Book Store

By starting an LLC for your comic book store, 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.

Comic book stores will benefit from liability protection because of the risk of someone getting injured in their store. There is also the risk of merchandise getting damaged, copyright infringement, and customer data breaches.

Example 1: After an employee at your comic book shop spilled coffee on a large batch of valuable comics, you decided to fire him without paying him for his final month of work as punishment. The employee decides to bring a lawsuit to your business for withholding pay. In this scenario, your personal assets are protected from any liability that might be imposed on your business to pay damages.

Example 2: A customer is walking around your comic book shop when they trip over some unpacked boxes that have been left on the floor and fall through a window, resulting in serious cuts that necessitated immediate medical attention. This prompted the customer to sue your business for this personal injury. Limited liability protects your personal assets from any liability that may be levied on your business.

Example 3: After taking out a loan to get your comic book business started, business doesn’t go as expected, and you don’t believe you will be able to repay your loan by the stipulated deadline. After the creditor discovers this, he brings a lawsuit against your business for defaulting on this debt. Liability for this debt can only be imposed insofar as your business’s assets and can never extend to you personally.

Example 4: You use several comic book characters in your recent advertising campaign. One of the companies whose characters are used claims that you did not receive permission to use their property and sues you.

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 Comic Book Store

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 comic book store 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

Comic book stores 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 trusted 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?

Your LLC, like all businesses, will need insurance to protect its assets. Comic book stores own highly valuable assets that need to be protected from the liabilities these businesses face.

Limited liability protects the personal assets of an LLC’s owner in a similar way to how insurance protects a business’s assets.

Common Situations Business Insurance May Cover for a Comic Book Store

Example 1: An employee is covering the evening shift alone. He decides to extract a vintage golden-age Superman comic, worth several thousand dollars, from its protective casing and plastic cover. As he reads it, a car alarm goes off and startles him, causing him to spill his coffee on the delicate collectible. The value of the comic drops, and it can only be sold for less than half its previous price. General liability insurance could probably compensate your business with an estimate of the comic’s previous worth.

Example 2: During a Magic: The Gathering tournament, your comic book shop hosts nearly two dozen players who occupy a large section of your store. One of the players, who has been drinking alcohol, becomes physically aggressive with his opponent. He strikes his opponent in the face, dislocating his jaw and knocking out a tooth. The injured customer sues your business. General liability insurance could probably help cover court-ordered payments to the injured party or any settlement reached.

Example 3: A car thief hotwires someone else’s vehicle in your parking lot, driving the stolen car erratically across the pavement and into the window of your store. Your front door and window display of board games are smashed, adding up to more than a thousand dollars of damage. These damages would likely be covered in part by general liability insurance.

Other Types of Coverage Comic Book Stores 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 comic book stores should obtain.

Commercial Property Insurance

Comic book shops contain expensive inventory, from rare comics to high-quality modern board games. Commercial property insurance can help your business avoid losing costly merchandise or even shutting down due to events like fire and violent weather.

This policy also applies to owned real estate, making it especially crucial for comic book businesses that own their storefronts. All it takes is one disaster to put a store out of business, and commercial property insurance can be the difference between ruined entrepreneurship and a thriving company.

Crime Insurance

Employee theft of high-value goods, like expensive vintage comic books worth thousands of dollars, can amount to serious losses for your business. While you may trust your employees, the complex reasons behind significant theft are not always predictable. If you entrust your storefront to an employee, it would be wise to purchase a policy like this one, which will cover losses due to employee dishonesty, property theft, forgeries, and more.

Workers' Compensation Insurance

You may decide to staff your business with part-time or full-time employees, which will legally require workers’ compensation insurance. With this policy, your valuable workers are covered in the event that they suffer serious accidental injuries in the workplace. Providing disability and death benefits for your employees and their families, this insurance is an essential inclusion for any business owner who elects to hire help.

Business Interruption Insurance

Interruptions to business are often unexpected, leading to a disorganized scramble as company personnel strives to reestablish the business’s footing. This is a long, expensive process during which every passing day represents stagnant profits at best and a tremendous expense at worst.

Business interruption insurance serves to cover estimated losses during a temporary business closure resulting from a fire, tornadoes, or other similar disasters. The policy can sometimes cover temporary relocations during the rebuilding efforts, keeping companies afloat during challenging transitions.

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, commercial property insurance, and workers’ compensation insurance if you have employees.

Read our Comic Book Store Insurance article for more info.

The startup cost for your comic book store will largely depend on how extensive your comic book collection is. If you are just getting started, expect to need around $25,000 to acquire a decent selection. In addition to this, you should aim to rent a store in a high-traffic area and fit the shop with shelves for comic books.

Visit our How to Start a Comic Book Store guide to learn more about the costs of starting and maintaining this business.

Employee salaries, rent, and the cost of electricity and internet access will constitute the bulk of your ongoing expenses. You also will have to pay to ship physical comics if you sell them online, and you will have to purchase inventory.

Learn more about running a comic book store.

A comic book store makes money by purchasing comic books and reselling them for a profit. To have a successful comic book store, you must be a good trader, selling items for more than you purchased them, either in the store or online.

Learn more about starting a comic book store.

Comic book stores sell not only comic books but related items like action figures and posters. Although retail bookstores also sell comics, comic book stores sell a wider variety, including rare comics not sold elsewhere.

A well-run comic book store can earn about a 45% profit margin.

Learn more about starting a comic book store.