Last Updated: October 2, 2024 by TRUiC Team


Should I Start an LLC for My Campground?

Starting a limited liability company (LLC) for your campground 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 campground, lawsuits can arise from things like a camper being seriously injured on your property due to unsafe conditions (i.e. uneven pavement) or if the business’s negligent operation leads to environmental damage.

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

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Do I Need an LLC for a Campground?

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 Campground

By starting an LLC for your campground, 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.

Campgrounds will benefit from liability protection because of the risk of customer injuries, workplace accidents, and property damage.

Example 1: A tree falls onto several vehicles in your parking lot during a wind storm, and the owners demand you pay for the repairs. Protection with your LLC’s limited liability allows for the bill to be paid with assets from the campground rather than your personal assets. 

Example 2: A visitor at your campground uses your boat launch, but the boat launch’s improper placement causes damage to their boat. You are asked to pay for the damages to the owner’s boat, and you must also pay to fix the boat launch. Limited liability protection ensures your assets will not be used to pay for the damages.

Example 3: Inspections show that your campground infringes on protected land, and the owner’s of the land are asking for you to pay for the usage of the property. Assets from the campground would be used to pay for this since limited liability from your LLC status protects your personal assets.

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 Campground

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 campground 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

Campgrounds 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 loansgrants, and credit.

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Do LLCs Need Insurance?

All businesses need insurance to protect their business assets — even LLCs. This is because limited liability protection from being an LLC protects your personal assets, not your business assets. 

Outdoor businesses can face all kinds of risks from weather and wild animals. Having insurance can protect your campground’s assets and help pay to replace them in case of emergency.

Common Situations Business Insurance May Cover for a Campground

Example 1: If a visitor to your campground is injured due to poor maintenance or upkeep surrounding a fire pit and/or grill, you could be held liable for their injuries. General liability insurance would likely cover their injuries in a lawsuit.

Example 2: A camper takes their boat out on the water using the boat launch provided. But the boat launch wasn’t properly repositioned in the spring, and it damages their boat. General liability insurance will likely help to pay for the repairs.

Example 3: Many modern campgrounds feature supply shops and general stores for visitors to restock their supplies during their stay. If a camper slips and falls on a freshly cleaned floor, your general liability coverage would likely help to pay for their injuries.

Other Types of Coverage Campgrounds 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 campgrounds should obtain.

Commercial Auto Insurance

All of the vehicles that are used in relation to your business must be covered under a commercial auto insurance policy. Personal insurance will not pay for any damages if you are involved in an accident while operating your business vehicle.

Workers’ Compensation Insurance

If one of your employees suffers an injury or becomes ill due to work-related duties, workers’ compensation coverage will cover their medical treatment and any other relative expenses. Most states require this type of coverage for both part-time and full-time employees.

Data Breach Insurance

When visitors register at your campground, they are trusting you with their personal and private information that may include their home address, credit card numbers, bank account information, and more. With the help of this data breach insurance, you can help to protect your business and customers in the event of a computer breach that results in stolen data.

Commercial Umbrella Insurance

This specialized insurance coverage is designed to kick in when your other primary policies have been exhausted. So if you end up facing a lawsuit that has already gone beyond the limits of your other insurance coverage, commercial umbrella liability insurance works to cover the remaining costs and damages.

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 Business Insurance for Campgrounds article for more info.

If you were to start with nothing, the very first thing would be to purchase land. Prices typically range between $1,000-10,000 per acre If you are buying an existing campsite, expect upwards of $100,000, with the highest going over $2 million.

Man-made elements such as roads, restrooms, installation of electrical and septic systems, will all have to be accounted for and maintenance for going forward.

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

Some of the costs of maintaining a campground include property upkeep, insurance, mortgage expense, and utilities.

Learn more about running a campground.

Campgrounds can make money by renting out campsites to customers and by selling food and other supplies.

Learn more about starting a campground.

The type of campground you choose to open will impact its potential profitability. But, it is also important to consider your existing resources (such as owned land) and how these can impact startup costs. There is a wide spectrum of campgrounds, from basic campsites with no amenities to “glamping” sites that are similar to hotels.

A campground’s profit varies considerably depending on the type of campground, its size, and its overhead costs. Charging different fees for popular seasons or offering rentable cabins may help boost profits. 

Learn more about starting a campground.