Should I Start an LLC for My Astrology Business?

Starting a limited liability company (LLC) for your astrology 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 an astrology business, lawsuits can arise from things like false advertising (e.g., misrepresenting your services, etc.), and accruing business debt.

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

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

Do I Need an LLC for an Astrology 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 an Astrology Business

By starting an LLC for your astrology 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.

Astrology businesses will benefit from liability protection because of the risk of liability for personal injuries to customers, property damage, or libel.

Example 1: Your astrology business produces a horoscope reading for a client that they believe to be untrue and the cause of significant harm to them. If the customer then decides to sue your business for its astrological practices, limited liability protection would prevent your personal assets from being at risk.

Example 2: An employee of your astrology business loses a work phone which contained detailed personal and financial information about your customers. In the event that one of the affected customers hears of this leak and brings a lawsuit against your astrology business, liability for this breach will be strictly limited to the assets belonging to your business.

Example 3: Due to the failure of your employees to adequately warn customers of an unsafe area on your business premises, a customer slips and seriously injures themselves. If this customer decided to bring a claim for bodily injury against your astrology business, the compensation you might be liable to pay would not be able to draw upon your personal assets.

Example 4: An unsatisfied client claims that your recent advertising campaign makes false claims about the benefits of your services and sues you for false advertising.

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 Astrology 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 an astrology 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

Astrology 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?

Yes, all LLCs need business insurance. The limited liability of LLCs protects your personal assets, but not those belonging to your business.

For your astrology business’s assets to be protected as well, your LLC must purchase business insurance.

Common Situations Business Insurance May Cover for an Astrology Business

Example 1: While visiting your business, a client slips on a staircase leading into your office, breaks his knee, and asks you to pay for his medical care. General liability insurance would cover the client’s treatment costs.

Example 2: A competitor claims your last advertisement libeled her business. While you’re unsure what she views as libel, you want to talk with a lawyer as soon as possible. If the competitor files a lawsuit, your general liability insurance would cover your legal defense costs.

Example 3: After a client slips and falls in your restroom, she accuses you of not warning against the risk of injury and sues for damages. General liability insurance would cover your legal fees and any required settlement.

Other Types of Coverage Astrology 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 astrology businesses should obtain.

Professional Liability Insurance

This insurance covers your business in the event a client accuses you of negligence due to a mistake or failure to perform. If a client claims your guidance caused them harm and sues your company, professional liability insurance would cover your legal fees and any required settlement.

Commercial Property Insurance

If you own the building 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 as well as any equipment and supplies you store there.

Home-Based Business Insurance

If you run any part of your business from home, you may need this insurance to safeguard your equipment, supplies, and the space in your home devoted to your business. A typical homeowners insurance policy may not cover business-related materials — or injuries sustained by clients in your home — if you don’t disclose you use your home for business purposes.

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.

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.

Read our Astrology Business Insurance article for more info.

The average opening cost of a small retail shop is around $65,000. This sum is composed of the deposits, rent, construction, furniture, and handyman costs you will have to pay.

Expect a large proportion to be devoted to IT expenses, including a website, equipment, and relevant consulting.

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

Astrology businesses have very low ongoing expenses. If you are renting a commercial space or hosting a website, those will be your largest expenses.

Learn more about running an astrology business.

Astrology businesses make money by selling astrology-related products and charging for psychic readings and tarot readings.

Learn more about starting an astrology business.

Astrology businesses are retail establishments in part, but they also provide education. In particular, they help sell the mystique of astrology to customers and also sell astrology-related items. An astrology business also might offer psychic readings or tarot readings.

The profit an astrology business can make depends on a variety of factors, including how well you can market the business and attract customers.

Learn more about starting an astrology business.