Last Updated: May 14, 2024, 11:42 am by TRUiC Team

Should I Start an LLC for My Golf Course?

Starting a limited liability company (LLC) for your golf course 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 golf course, lawsuits can arise from things like compensation claims from adjacent properties (e.g., as a result of property damage from golf balls, personal injuries, etc.).

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

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

A golf ball on the green near a hole

Do I Need an LLC for a Golf Course?

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 Golf Course

By starting an LLC for your golf course, 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.

Golf courses will benefit from liability protection because they face the same risks as other sports businesses, including claims for causing physical injury and destruction of personal property.

Example 1: A customer drove a golf ball that flew over the protecting netting surrounding your golf course and seriously injured the owner of a neighboring house. As a result, the injured neighbor sued your business for the injury he suffered, alleging your business should have built a taller protective netting. In the ensuing litigation, limited liability precludes against the possibility of liability to pay damages extending to your personal assets.

Example 2: In order to finance the immense startup costs of your golf course, you decided to take out a loan. However, since you selected a less than optimal location for your business, it underperforms and you won’t be able to repay the loan. As such, the creditor that lent you this money decided to sue your business for defaulting on the loan. Limited liability would protect you from being held personally liable for this.

Example 3: When leaving after work, one of your golf course business’s employees accidentally collides with a customer’s vehicle in the business’s car park. This leads the customer to sue your business for this property damage, though your personal assets will be protected by limited liability from any responsibility levied against your business to pay damages.

Example 4: A pathway gets washed away in a storm, and your team fails to notice. A visitor to your course doesn’t see the damage and stumbles, breaking her wrist. She demands that your company pay for her medical treatment.

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 Golf Course

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 golf course 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

Golf courses 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 loansgrants, 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 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?

If you are considering establishing an LLC, you will need to acquire insurance for it. While this is true for all businesses, it is particularly pertinent for golf courses due to the sheer value of the assets they own.

Insurance protects these assets belonging to the business, while limited liability protects the personal assets belonging to an LLC owner.

Common Situations Business Insurance May Cover for a Golf Course

Example 1: One of your caddies leans a player’s clubs against his car, and they fall over just as another car is passing by. The car runs over and crushes the clubs. The client demands that your business pay to replace them. Your general liability insurance policy would cover this expense.

Example 2: A section of pathway washed away in a storm the previous night. A visitor to your course fails to see the damage and stumbles, falling and breaking her wrist. She demands that your company pay for her medical treatment. A general liability policy would likely cover her medical bills.

Example 3: One of the players on your course is hit in the eye by a golf ball and sustains serious injuries. He sues your golf course for damages. While you may ultimately be exonerated, since players assume a certain level of risk as part of their participation, you still need to defend yourself legally. Your general liability insurance would pay for your legal fees, including the cost of a settlement if one is necessary.

Other Types of Coverage Golf Courses 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 golf courses should obtain.

Workers’ Compensation Insurance

Most states require you to carry workers’ compensation insurance if you have employees. If an employee is hurt performing job-related duties and requires medical care, workers’ comp will pay for that care. It will also help to pay for lost wages while the employee recovers from their injuries.

Commercial Property Insurance

You have likely invested significant capital in the equipment and supplies you need to run your golf course. If you were to lose most or all of your commercial property, it would be expensive to replace. But if you have adequate commercial property coverage, your insurer will help to cover the cost of replacing your property if it is damaged in a covered event like a fire.

Commercial Umbrella Insurance

The general liability insurance you carry is sufficient for most circumstances, but there are times where the limits of a general liability insurance policy can be exceeded—like if you lose a major lawsuit. A commercial umbrella insurance policy is designed to pick up where your general liability insurance leaves off. Once the limits of the general liability insurance are exceeded, the umbrella policy will kick in.

Commercial Auto Insurance

If you have a vehicle that you use primarily for business purposes, you need a commercial auto policy. Most states require you to carry commercial auto for business vehicles. With your policy, you will have protection in the event of an accident. The policy will pay for repairing or replacing your vehicle as well as for injuries sustained in an accident. It will also pay for damages and injuries for others if you are at fault in an accident.

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.

The startup cost of a golf course is extremely significant. You can expect to need a minimum of $1.5 million, though this figure can greatly increase depending on how much of the work you are willing and able to do yourself.

The largest component of this cost will almost certainly be the land since golf courses can require 200 acres or more.

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

The major ongoing expenses of running a golf course include the cost of maintaining the course and the buildings, labor costs, and marketing.

Learn more about running a golf course.

A golf course makes money by charging customers for the use of the course and its amenities, golf carts, and golfing equipment, as well as food and beverages at the clubhouse. Exclusive golf courses charge membership fees.

Learn more about starting a golf course.

Traditionally, golf has been reserved for an older elite crowd, but the sport is becoming more accessible to a wider audience. There is an opportunity to boost profit by engaging new customers as interest among amateur golfers increases. Younger customers can be attracted by offering more fun and engaging packages.

The profitability of a golf course varies depending on its location, prestige, size, and amenities.

Learn more about starting a golf course.

Related Articles

Article Sources

IRS: Limited Liability Company

IRS: S Corporations


SBA: Small Business Guide

SBA: Choose a Business Structure Guide

US Census Bureau: Small Business Statistics

SBA Office of Advocacy: Data on Small Business

FRED: SBA Data for Small Business