Should I Start an LLC for My Countertop Business?

Starting a limited liability company (LLC) for your countertop 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 a countertop business, lawsuits can arise from things like a maintenance worker becoming injured while installing a countertop in a client’s house or an employee accidentally damaging a customer’s property during a job.

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

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

Do I Need an LLC for a Countertop 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 a Countertop Business

By starting an LLC for your countertop 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.

Countertop businesses will benefit from liability protection because of the risk of being sued for personal injuries and property damage.

Example 1: An employee of a countertop business accidentally drops a piece of equipment and damages a client's kitchen floor. The client sues the business for property damage. Because the business is an LLC, the owner's personal assets are protected from the claim.

Example 2: A customer of a countertop business alleges their newly installed countertop is defective and sues the business for damages. If the countertop business is an LLC, the owner's personal assets will remain protected regardless of the court's ruling.

Example 3: A countertop business is sued for negligence by a client who claims that the business failed to properly install its countertop, resulting in water damage to its kitchen. As an LLC, if your business is found guilty, only your business's assets will be affected and not any owner's personal assets.

Example 4: When transporting a large marble countertop, an employee drops it onto the client’s floor, breaking the countertop and damaging the client’s flooring. The client asks that you cover the repair and replacement costs.

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 Countertop 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 a countertop 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

Countertop 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 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?

LLCs need to have insurance to protect against potential financial losses from unforeseen risks. Without insurance, the business could face significant financial damages if sued. Having an insurance policy in place can help mitigate these damages.

Common Situations Business Insurance May Cover for a Countertop Business

Example 1: When transporting a large marble countertop, an employee drops it onto a client’s foot. The impact breaks several of the client’s toes, and they sue you for damages. General liability insurance would cover the client’s medical bills and your legal costs.

Example 2: As an employee lifts a piece of granite countertop from a truck, he slips, and the granite hits the windshield of a client’s car. General liability insurance would cover the client’s vehicle repair costs.

Example 3: A local home repair service claims your business name is too similar to theirs and sues you for a loss of business. General liability insurance would cover your legal costs to fight the claim or settle it out of court.

Other Types of Coverage Countertop 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 countertop businesses should obtain.

Commercial Property Insurance

If you own the building in which you operate, you’ll need commercial property insurance to protect your business from natural disasters, theft, and vandalism. This insurance would cover the cost of repairing any structural damage to your building and replacing your lost equipment and other business materials so you can recover quickly.

Professional Liability Insurance

Because you provide home repair and installation advice, you need professional liability insurance to cover any expenses associated with negligence or mistakes you make on the job. If a client believes their choice of countertop negatively impacts their house resale value, for example, this insurance would cover your legal costs in the event of a lawsuit.

Product Liability Insurance

This insurance covers any accidents or injuries associated with your product. If a customer develops a skin condition due to the type of material you used, for example, this insurance would pay for the customer’s medical expenses.

Workers’ Compensation Insurance

While working with heavy countertops, your employees may suffer a back or shoulder injury. 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 or death benefits stemming from a work-related accident.

Commercial Auto Insurance

Any vehicle you or your employees use primarily for business requires commercial auto insurance to protect the vehicle, driver, and others on the road in the event of an accident. Be sure to select a policy that covers not only accident-related vehicle repair costs and medical treatment for anyone injured but also sufficient protection for any business-related equipment or supplies you carry in your vehicles.

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 auto insurance.

Read our Countertop Business Insurance article for more info.

To start a countertop business, you will need a city business license, which typically costs between $50 and $100, liability insurance, and raw materials. You will also need to consider utilities, rent, and employee wages, which are typically between $13 and $17 per hour for fabricators and installers.

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

Materials, tools, rent, employee salaries, and utilities are all ongoing expenses of a countertop business.

Learn more about running a countertop business.

A countertop business makes a profit by installing, removing, and maintaining countertops.

Learn more about starting a countertop business.

Countertop businesses handle the installation of a custom countertop, including home repair and interior decorating skills, along with specialized tools.

A countertop business’s profits depend on its overhead costs, client base, and how much it charges per installation.

Learn more about starting a countertop business.