Should I Start an LLC for My Amusement Park?

Starting a limited liability company (LLC) for your amusement park 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 an amusement park business, lawsuits can arise from things like customers getting injured within your premises, rides malfunctioning, or children getting lost within your park.

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

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

Do I Need an LLC for an Amusement Park?

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 an Amusement Park

By starting an LLC for your amusement park, 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.

Amusement parks will benefit from liability protection because of risks associated with the safety of guests while on the park premises. Copyright and trademark infringement is also a risk with other amusement parks that may be similar to yours.

Example 1: An employee fails to give correct safety instructions to customers about one of your business’s rides, resulting in one of the riders breaking an arm. In the event that this customer sues your business, limited liability protection ensures that your personal assets are not at risk.

Example 2: One of the rides at your amusement park is not maintained in a safe condition by its operators. As a consequence, the faulty ride results in the injury of a number of customers. In this case, the LLC structure precludes your personal assets from being used to meet the business’s liabilities.

Example 3: A warning sign for one of your amusement park’s rides is insufficiently clear in informing customers of the risks associated with the ride. This leads a customer with heart problems to board the ride, inducing a heart attack. As long as you were not personally responsible for the negligence, limited liability insurance makes sure your personal assets are safe.

Example 4: A ride malfunctions, causing injuries to several guests. They decide to sue you for the resulting medical expenses.

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 an Amusement Park

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 an amusement park 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

Amusement parks 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?

Insurance is a necessity for all businesses. It provides protection for business assets that mirrors the protection LLCs provide for personal assets.

It is vital that insurance parks have insurance because they are exposed to a wide variety of potential risks due to their nature.

Common Situations Business Insurance May Cover for an Amusement Park

Example 1: A child slips and hits his head as he rushes out of the restroom. His parents ask your business to pay for his medical treatment. General liability insurance would cover the child’s medical bills.

Example 2: As an employee pushes a wheelbarrow full of gravel across your parking lot, he trips and the wheelbarrow hits a customer’s car. General liability insurance would cover the customer’s vehicle repair costs.

Example 3: A water park across town sues, claiming your new logo is too similar to their existing logo. General liability insurance will pay for your legal fees and any damages awarded in a settlement.

Other Types of Coverage Amusement Parks 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 amusement parks should obtain.

Workers’ Compensation Insurance

Most states require businesses to carry workers’ compensation insurance for their part-time and full-time employees. This coverage protects your employees if they become injured at work or fall ill after a work-related accident. It not only covers an employee’s medical bills and lost wages if they need time to recover, but also any disability benefits stemming from a work-related accident.

Commercial Property Insurance

You’ve made major investments in your park’s rides and related equipment. Commercial property insurance would cover the cost of repairing or replacing your damaged property in the event of a fire or natural disaster so you can recover quickly.

Commercial Umbrella Insurance

While your general liability insurance policy covers most claims, some accidents or lawsuits may be so catastrophic that they threaten to exhaust the limits of your primary coverage. Commercial umbrella insurance protects you from paying out-of-pocket for any legal fees and awarded damages that exceed your primary policy.

Commercial Auto Insurance

Any vehicle you use primarily for business requires commercial auto coverage. Your policy will protect your vehicle, the driver and others on the road in the event of an accident by covering any related vehicle repair costs as well as medical treatment for anyone injured.

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, workers’ compensation insurance, and commercial property insurance.

Read our Business Insurance for Amusement Parks article for more info.

While highly variable, the startup cost of any amusement park is guaranteed to be high. Even smaller, indoor facilities offering arcade games and bounce houses could require up to $250,000.

Larger scale projects, such as those featuring roller coasters can easily reach multi-million dollar levels of required investment to get started.

Visit our How to Start an Amusement Park guide to learn more about the costs of starting and maintaining this business.

Ongoing costs will include the maintenance of rides and park equipment, park staff payroll, operational costs of shops and stores, development cost of new attractions, in addition to licensing, taxes, and insurance costs.

Learn more about running an amusement park.

Admission ticket pricing is the main source of money for amusement parks, along with concession and store purchases once in the park, and items such as ride photos and other extra items that customers purchase once they are in the park.

Learn more about starting an amusement park.

Theme or amusement parks offer a variety of rides, concessions, games, and attractions to guests. Though more expensive to start, large parks offer a wider variety of services and opportunities (and therefore offer more opportunities to run a profit).

Learn more about starting an amusement park.