Should I Start an LLC for My Dog Sledding Business?
Most dog sledding businesses will benefit from starting a limited liability company (LLC).
By starting an LLC for your dog sledding business, you can protect your personal assets and increase your tax options and credibility.
Our Should I Start an LLC for My Dog Sledding Business guide will explain the benefits of an LLC and teach you how to form an LLC.
Recommended: Use Northwest to form an LLC for $29 (plus state fees).
Do I Need an LLC for a Dog Sledding 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 Dog Sledding Business
By starting an LLC for your dog sledding 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.
Dog sledding businesses will benefit from liability protection because of the risks associated with the safety of riders while they are on the dog sled.
Example 1: While on a dog sledding tour, one of your customers falls out of the sled and snaps their wrist. If they file a medical damages lawsuit against your LLC, your personal assets will remain protected as a result of your limited liability.
Example 2: You purchase a rescue dog that’s having a hard time assimilating with the rest of the pack. At the end of a dog sledding tour, one of your customers attempts to pet the dog, which leads to a bite wound. Even though you agree to not use the dog again until it has been properly trained, the injured customer files a compensation lawsuit against you. Since your business is registered as an LLC, the claimant will not be able to seek compensation from you personally.
Example 3: A friend offers your business a $20,000 loan to help you expand. When your business starts going under, your friend threatens to sue you if you are unable to pay him back. Since the agreement was made between the LLC and your friend — and not between yourself and your friend — limited liability will shield your personal assets if a lawsuit arises.
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 Dog Sledding 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 dog sledding 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
Dog sledding 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).
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
- Alabama LLC
- Alaska LLC
- Arizona LLC
- Arkansas LLC
- California LLC
- Colorado LLC
- Connecticut LLC
- Delaware LLC
- Florida LLC
- Georgia LLC
- Hawaii LLC
- Idaho LLC
- Illinois LLC
- Indiana LLC
- Iowa LLC
- Kansas LLC
- Kentucky LLC
- Louisiana LLC
- Maine LLC
- Maryland LLC
- Massachusetts LLC
- Michigan LLC
- Minnesota LLC
- Mississippi LLC
- Missouri LLC
- Montana LLC
- Nebraska LLC
- Nevada LLC
- New Hampshire LLC
- New Jersey LLC
- New Mexico LLC
- New York LLC
- North Carolina LLC
- North Dakota LLC
- Ohio LLC
- Oklahoma LLC
- Oregon LLC
- Pennsylvania LLC
- Rhode Island LLC
- South Carolina LLC
- South Dakota LLC
- Tennessee LLC
- Texas LLC
- Utah LLC
- Vermont LLC
- Virginia LLC
- Washington LLC
- Washington D.C. LLC
- West Virginia LLC
- Wisconsin LLC
- Wyoming LLC
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.
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 and commercial property insurance.
Read our Small Business Insurance article for more info.
The largest cost of starting a dog sledding business is purchasing the dogs.
Retired racing dogs are generally well-trained, although they can be quite expensive. If you are operating on a smaller budget, you could work with rescue dogs, although these may come with some behavioral issues.
Besides dogs, you will also need to purchase equipment, including booties and thermal gear, ganglines, harnesses, and sleds.
When it comes to maintenance costs, you will need to consider the cost of providing your dogs with adequate veterinary care and food, as well as periodically replacing any damaged equipment.
Visit our How to Start a Dog Sledding Business guide to learn more about the costs of starting and maintaining this business.
Some of the main ongoing expenses will be costs associated with caring for the dogs, repairing and replacing equipment, and maintaining your business facilities.
Learn more about running a dog sledding business.
The primary source of revenue is by charging customers rides for specific tours.
Learn more about starting a dog sledding business.
Dog sledding businesses provide group and private dog sledding activities, where individuals travel on a sled led by a pack of dogs. While most dog sled businesses operate in areas with cold or snowy conditions, some have begun bringing dog sledding to areas with warmer climates as well.
Dog sledding businesses have the ability to profit as much as $3,000 a week.
Learn more about starting a dog sledding business.
