Should I Start an LLC for My Commercial Aviary?

Starting a limited liability company (LLC) for your commercial aviary 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 commercial aviary, lawsuits can arise from several different factors, including an employee getting injured while working with birds or the accrual of debt as a result of not paying a business loan back on time.

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

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

Do I Need an LLC for a Commercial Aviary?

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 Commercial Aviary

By starting an LLC for your commercial aviary, 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.

Commercial aviaries will benefit from liability protection because of the risk of lawsuits for personal injuries as well as trademark infringement.

Example 1: One of your birds seriously injures a customer. The customer sues you, claiming that you did not properly house the bird to avoid accidents. Your standing as an LLC provides limited liability, which will protect your personal assets from the settlement.

Example 2: Your business takes out a loan to expand the aviary but defaults on it, leading the bank to seek payment in full. Limited liability from being an LLC keeps your personal assets as the owner from being used for repayment — only the business’s assets are at risk.

Example 3: A customer has an allergic reaction to the cleaning supplies you use to sanitize and asks you to pay for their medical bills. Being an LLC, limited liability would make sure only business assets could be used to pay the expense, not your personal assets as the owner.

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 Commercial Aviary

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 commercial aviary 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

Commercial aviaries 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?

All businesses need insurance. This is because your limited liability from being an LLC only protects the owner’s personal assets, not the business’s. Commercial aviaries need insurance because of the risks involved with handling animals. Illnesses and injuries can occur and either harm your birds or customers, and insurance can help cover the costs of these inconveniences.

Common Situations Business Insurance May Cover for a Commercial Aviary

Example 1: A customer falls while entering the aviary and fractures their wrist. They are asking your business to pay for their medical bills. General liability insurance would cover the resulting medical payments for the injury.

Example 2: While loading a birdcage into a customer’s vehicle, an employee drops the cage and scratches the car’s paint. General liability insurance would cover the damage done to the customer’s vehicle.

Example 3: A customer has an allergic reaction to a type of bird at the aviary and demands you pay for their medical bills. General liability insurance would cover the medical payments for their stay in the hospital.

Other Types of Coverage Commercial Aviaries 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 commercial aviaries should obtain.

Workers’ Compensation Insurance

If your commercial aviary has any employees (full-time or part-time), you are legally required to carry workers’ compensation insurance. This type of coverage will help compensate your employees if they get injured on the job.

Read more about workers’ compensation insurance.

Commercial Property Insurance

If you own your location instead of renting, you need commercial property insurance to protect the building. If your business is based out of your home, your homeowners' insurance will not cover the home when it is being used for commercial purposes. Property insurance also covers items owned by your business.

Commercial Umbrella Insurance

Umbrella coverage allows you to extend above and beyond the standard limits of your other business insurance policies. If you are faced with a large lawsuit or other claim situation, there’s a possibility that the coverage limits of your standard policies will be insufficient. In this case, your umbrella policy will allow you to surpass these limits.

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 Small Business Insurance article for more info.

While a larger facility usually yields more profit, a commercial aviary can start as a small-scale operation in your backyard. The necessities include a breeding pair of birds, food, large cages, and a nesting box, You will also need access to a good avian vet, which will likely be the most expensive part.

Once you are established, food and vet bills will be among the most important ongoing expenses.

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

Vet bills, food, and utilities represent the primary ongoing expenses for commercial aviaries.

Learn more about running a commercial aviary.

A commercial aviary sells birds to individuals and pet stores.

Learn more about starting a commercial aviary.

A commercial aviary raises and sells exotic birds. Aviaries come in all sizes — from one-person operations to large-scale businesses with many employees. Some aviaries sell birds to individual customers at retail locations while others operate breeding programs and sell their birds wholesale to pet stores.

A commercial aviary’s profitability will depend on how many birds it sells and its overhead costs.

Learn more about starting a commercial aviary.