Should I Start an LLC for My Archery Range?

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 Archery Range

By starting an LLC for your archery range, 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.

Archery ranges will benefit from liability protection because of the relatively high risk involved with shooting arrows. Additionally, there are general business risks like trademark infringement and libel claims. 

Example 1: An instructor at your archery range fails to take proper safety precautions, resulting in one customer seriously injuring the other. As a result, the injured customer sued your archery range for this negligence. Any damages your business may have to pay can only be imposed upon your business’s assets due to limited liability.

Example 2: A customer at your archery range slips on wet floors in an out-of-use toilet as a result of there being no sign warning him of the danger. If this customer decided to bring a claim for bodily injury against your company, your liability would be limited to the business’s assets and could not extend to those that you personally own.

Example 3: One of the employees at your archery range has their work laptop stolen, which results in the leaking of many of your customers’ financial data. One of these customers decides to sue your archery range for the data breach. Limited liability protects your personal assets and limits potential damages you may owe the plaintiff to be paid with your business’s instead.

Example 4: Despite warnings, a visitor to your range goes behind the targets to retrieve an arrow. Another archer shoots and misses the target, instead hitting them in the leg. The visitor sues your business 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 Archery Range

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 archery range 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

Archery ranges 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.

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.

Business insurance is a basic requirement of all LLCs. Without it, an LLC’s assets are exposed to the many ordinary liabilities businesses can face on a daily basis.

LLCs innately protect the personal assets of their owners with limited liability protection. However, business insurance is needed to extend this protection to business assets as well.

Common Situations Business Insurance May Cover for an Archery Range

Example 1: While an employee transports equipment from the parking lot to the range, he loses control of the dolly and it hits a customer’s car. General liability insurance would cover the customer’s vehicle repair costs.

Example 2: A competitor claims your last advertisement libeled his business and decides to sue. While you disagree with the accusation, you need to hire a lawyer immediately. Your general liability policy will pay for your legal representation and any awarded settlement.

Example 3: As a customer’s child runs across the walkway to the range, he trips and breaks his nose. His father asks your business to pay for his son’s medical care. General liability insurance would cover the child’s medical treatment.

Other Types of Coverage Archery Ranges 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 archery ranges should obtain.

Commercial Property Insurance

You made a major investment in the equipment and supplies for your archery range. If you own the facility in which you operate, commercial property insurance would cover the cost of repairing or replacing your business-related property in the event of a fire, theft, or natural disaster. This includes structural damage to your building or grounds as well as the business equipment and supplies you store there.

Professional Liability Insurance

While you strive to offer advice that helps your customers improve their archery skills, there’s always a chance one might decide your professional advice caused them harm. If a customer files a lawsuit, professional liability insurance would cover your legal fees and any required settlement.

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.

Workers’ Compensation Insurance

If you have any employees, most states will require you to carry workers’ compensation insurance for both part-time and full-time workers. 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 or death benefits stemming from a work-related accident.

IRS: Limited Liability Company

IRS: S Corporations

IRS: EIN

SBA: Small Business Guide

SBA: Choose a Business Structure Guide

US Census Bureau: Small Business Statistics

SBA Office of Advocacy: Data on Small Business

FRED: SBA Data for Small Business