Do I Need an LLC for My Drone Photography Business?

Starting a limited liability company (LLC) for your drone photography 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 drone photography business, lawsuits can arise from things like Federal Aviation Administration (FAA) violations, as well as from selling photographs of private events or property without receiving consent.

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

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

A photo of a beach from directly above by a drone

Should I Start an LLC for My Drone Photography Business?

LLCs are a simple and inexpensive way to protect your personal assets and save money on taxes.

You should start 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 Drone Photography Business

By starting an LLC for your drone photography 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.

Drone photography businesses will benefit from liability protection because photography businesses, including drone photography businesses, face a variety of risks associated with flying equipment at clients’ events or in public spaces. Additionally, there are risks associated with guests injuring themselves while visiting your physical business location.

Example 1: An employee of your business attempts to capture some drone shots of a wedding when the battery malfunctions while the drone is in the air, causing it to fall on the groom’s head and incur a serious concussion that requires immediate medical attention. This prompts the groom to sue your business for bodily harm. Any compensation imposed on your business can only be levied against the business’s assets and not against you personally.

Example 2: Another employee at your drone photography business is flying a drone recklessly, causing it to crash and severely damage a client’s car. If the client decided to sue for this property damage, limited liability would protect your personal assets from being at risk.

Example 3: After your drone photography business suffered a debilitating hack that revealed the financial information of a number of clients, one of the affected clients decided to sue for this data breach. In this scenario, if your business was found liable to pay damages, these could only be imposed on the assets belonging to your business.

Example 4: While flying a drone to take photos at a client’s wedding, the drone falls from the air and injures a guest. The guest sues your business to cover the medical damages.

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 Drone Photography 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 drone photography 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

Drone photography 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 dependable 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?

You will need to buy insurance for your LLC, just like any other business. Since drone photography businesses own expensive assets (i.e., drones), insurance is even more necessary in order to protect these assets from the liabilities such businesses face.

Similarly, the personal assets of the LLC owner need to be protected, which is what limited liability is for.

Common Situations Business Insurance May Cover for a Drone Photography Business

Example 1: You are taking photographs of a party with your drone when you lose control of it. The drone crashes into a guest, causing her serious injury. She sues your business. Your general liability insurance policy will cover the cost of your legal defense, including the cost of settling out of court if it is necessary to do so.

Example 2: A potential client is visiting your place of business to see your drones when he trips over a power cable and falls. He breaks his wrist and requires medical care. He asks that you pay for his medical treatment. Your general liability insurance policy will likely cover this cost.

Example 3: You have been using a new logo for your business that you feel really represents it well. Unfortunately, another business decides that your logo is too similar to their own and sues your company. The general liability insurance policy you carry will pay for your legal defense in such a situation as well as cover the cost of any settlement.

Other Types of Coverage Drone Photography 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 drone photography businesses should obtain.

Professional Liability Insurance

A professional liability insurance policy offers protection specific to your business for liability related to negligence claims due to mistakes or failure to perform. There is always the possibility that a client could claim that your work caused him or her injury and sue your business. If this happens, your professional liability policy will pay for your legal fees.

Commercial Property Insurance

You have invested a lot in your drones, photography equipment, and editing equipment. If you were to lose most or all of this property due to an unforeseen disaster like a fire, it would be costly to replace. But if you have a commercial property insurance policy, you can likely get help with replacement costs as long as your loss was caused by a covered event.

Workers’ Compensation Insurance

If you have employees, your state most likely requires you to carry workers’ compensation insurance. A workers’ comp policy provides much-needed protection for your employees if they are injured performing job-related duties. If they are hurt and need medical care, the workers’ comp policy will pay for that treatment. It will also help to pay for the lost wages that they miss out on while recovering from their injuries.

Commercial Auto Insurance

If you have an automobile that you use primarily for business, you need a commercial auto policy to ensure that you meet the legal requirements for auto insurance in your state. Your policy will help to pay for damage to your vehicle and other vehicles if you are in an accident, and it will pay for medical treatment for the injured as well.

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 Business Insurance for Drone Photography Businesses article for more info.

The startup costs for a drone photography business are substantial. The drones themselves will form the biggest component of this cost. While commercial-quality drones can be purchased for around $10,000, hobby-level drones can be bought for around $1,000.

Outside of this, your business will have to shell out for computer and software, FAA certification, and your website and hosting.

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

The main ongoing expenses will be associated with maintaining, repairing, and updating drones. Any software needed to control the drone or edit its footage will also be an expense.

Learn more about running a drone photography business.

Depending on the business, photographers will either charge an hourly rate or a package rate for their drone services, with a certain number of services promised for an all-together price.

Learn more about starting a drone photography business.

Drone photography businesses provide aerial photographs and video footage of particular scenes and landscapes through the use of autonomous UAVs or remote-controlled drones.

The average drone photography business has the ability to profit about $60,000 per year.

Learn more about starting a drone photography business.