Should I Start an LLC for My Game Truck Business?

Starting a limited liability company (LLC) for your game truck 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 game truck business, lawsuits can arise from a variety of different factors, including intellectual property law violations (e.g., trademark and copyright infringements, etc.) or defaulting on a substantial debt.

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

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

Do I Need an LLC for a Game Truck 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 Game Truck Business

By starting an LLC for your game truck 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.

Game truck businesses will benefit from liability protection because of the risk of being sued for trademark infringement, personal injuries, and property damage.

Example 1: A child is injured while using faulty equipment provided by the game truck business during an event, and the child’s parents proceed to sue the game truck business. If found liable, only the business assets will be affected.

Example 2: A customer's child suffers an allergic reaction to food provided by the game truck business during an event. Following this, the customer sues the business. Regardless of the court’s ruling, the owner’s assets will remain safeguarded from any fees associated with the lawsuit.

Example 3: A customer's child falls and sustains an injury while using equipment in the game truck. Following this, the customer sues the business. In this scenario, the owner's personal assets will be protected from any damages for which the business is found to be responsible.

Example 4: Your company logo is similar to another company operating in a neighboring town. They have a copyright on their logo and decide to sue you for infringement.

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 Game Truck 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 game truck 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

Game truck 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?

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.

By having insurance, a game truck business can safeguard its assets and minimize the financial impact of a lawsuit or other unexpected event.

Common Situations Business Insurance May Cover for a Game Truck Business

Example 1: While stepping out of the game truck, one of the partygoers falls and breaks his arm. Your general liability policy should cover medical expenses as well as any damages awarded.

Example 2: Your company logo is similar to another company operating in a neighboring town. They have a copyright on their logo and are suing, claiming copyright infringement. General liability can pay for the legal fees as well as potential payouts.

Example 3: A customer claims one of the gaming trucks scraped their car after a gaming party. The customer wants you to pay for the damage. A general liability policy is designed to handle these types of expenses.

Other Types of Coverage Game Truck 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 game trucks should obtain:

Commercial Auto Insurance

Since your business operates out of vehicles used on public roadways, a commercial auto policy should be included in your insurance package. Each state mandates a minimum amount of coverage a business must purchase.

While your state requires a minimum amount of coverage, game truck businesses are encouraged to purchase increased limits, offering additional protection for a covered loss.

Commercial Property Insurance

Game truck businesses invest in a large amount of equipment, retrofitting each vehicle as a mobile game room. It’s wise to work with your insurance agent to ensure that your equipment is properly covered should a loss occur. Business owners who do not own a brick-and-mortar location should inquire as to the best policy to meet their needs.

Commercial property insurance is often purchased as part of a business owner’s policy (BOP).

Workers’ Compensation Insurance

Most states require businesses with employees to cover their workers under a workers’ compensation policy. If an employee is injured on the job, their medical bills and lost wages would be covered under this policy. Should they choose to seek additional damages, this insurance would protect your business up to the limits of the policy.

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, commercial auto insurance, and commercial property insurance.

Read our Game Truck Business Insurance article for more info.

You may require an investment in a truck and trailer, 3M wrap, generator, TVs, gaming systems, LED lighting, stadium seating, sound bars, satellite, and an air conditioning and heating system. Full mobile game theaters can cost between $50,000 and $74,000, or you can construct your own build-out at a potentially lower cost.

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

Primary ongoing expenses for a game truck business include fuel, insurance, trailer parking and storage, advertising, merchant fees, new games, and equipment purchases and maintenance.

Learn more about running a game truck business.

A game truck business primarily makes a profit by charging people for events.

Learn more about starting a game truck business.

A mobile game truck business offers gaming experiences for players of all ages. Game trucks are popular with large events such as birthday parties or community gatherings.

Profits depend on how many parties you host per month, how many people attend each party, what you charge each person, and your overhead costs.

Learn more about starting a game truck business.