Should I Start an LLC for My Home Staging Business?

Starting a limited liability company (LLC) for your home staging 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 home staging business, lawsuits can arise from things like defaulting on a large business loan or from property damage.

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

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

Home stager checking measurements on a wall for home decor

Do I Need an LLC for a Home Staging 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 Home Staging Business

By starting an LLC for your home staging 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.

Home staging businesses will benefit from liability protection because of the risk of property damage and other general business risks.

Example 1: While decorating a customer’s empty home, said customer tripped over a paint can that had been left out by an employee of your home staging business. As a result, the customer decided to file a personal injury lawsuit against your business. Limited liability precludes the court from seizing your personal assets in order to pay any settlements the plaintiff may be awarded.

Example 2: After a large economic downturn, your home staging business suffered a serious drop in demand for its services that led it to gather large amounts of debt. In this instance, any creditors of your business are not able to go after your personal assets to fulfill these debts.

Example 3: An employee of your home staging business used a copyrighted painting in a project without acquiring the required permission. As a consequence, the copyright owner sued your business for this infringement. In the ensuing lawsuit, only the assets of your business are responsible to satisfy any settlements the court may grant the plaintiff.

Example 4: An employee is staging a client’s living room and improperly sets up a large dresser. The dresser falls and causes damage to both the dresser and the client’s flooring, which they ask you to cover the repair cost of.

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 Home Staging 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 home staging 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

Home staging 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 professional 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 the limited liability protection from an LLC protects your personal assets, not your business assets.

This is particularly true for home staging businesses, whose assets are threatened by unique and individual liabilities like property damage (both your business’s property and your client’s property).

Common Situations Business Insurance May Cover for a Home Staging Business

Example 1: An employee is staging the home of a client. While vacuuming the main living room area, she accidentally sucks up the edge of an antique Persian rug, and a section of it unravels. The damage is going to be extremely expensive to repair, and the rug may need to be replaced. Your general liability insurance policy covers damages your business causes to your customer’s property.

Example 2: A potential client is visiting your place of business to talk to you about staging his home. While walking into your office, he slips on a patch of ice and falls, breaking his arm. Your general liability insurance policy will likely pay for his medical treatment.

Example 3: Employees carrying a large sofa into a client’s home for staging do not see the client’s husband as they are rounding a corner outside of the home. They run directly into him, knocking him to the ground. He sustains a concussion and decides to sue your business. Your general liability insurance policy will cover the cost of your legal defense and a settlement if necessary.

Other Types of Coverage Home Staging 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 home staging businesses should obtain.

Commercial Auto Insurance

The automobiles that you use primarily for business should be covered by a commercial auto policy. In the event that your vehicle is involved in an accident caused by you or your employees, your commercial auto policy will pay for the damage to your vehicle and any other vehicles in the accident. It will also pay for the medical care for all vehicle occupants injured by the accident.

Professional Liability Insurance

Professional liability insurance covers your company when you are determined to be liable for mistakes or failure to perform. For example, if a client decides that your staging work was responsible for poor sales results and takes legal action against your business, your professional liability insurance would pay for your legal fees.

Commercial Umbrella Insurance

An umbrella policy will pick up where your general liability insurance policy leaves off. If you are in a situation where your general liability limits are exceeded, like if you lose a big lawsuit, you can rely on your umbrella policy to pay once the general liability policy stops paying, up to the limits of the umbrella policy.

Workers’ Compensation Insurance

If your business has employees, workers’ comp insurance will allow you to help them if they are injured on the job. It pays for work-related injuries, including medical care for treatment and helping with lost wages if the employee is unable to work while recovering.

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 workers' compensation insurance if you have employees.

Read our Home Staging Business Insurance article for more info.

Depending on the type of services that your business intends to offer, the starting cost will vary. Full-service home staging businesses are able to handle more lucrative projects, such as furnishing houses with more luxurious accessories. The startup cost can be reduced to as little as a few thousand dollars by creating your business to offer consultancy to homeowners.

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

The ongoing expenses of a home staging business include marketing, transportation, labor, insurance, storage, and furnishings.

Learn more about running a home staging business.

Home staging businesses make money by charging customers for the homes that they stage. They can charge per room or per square foot.

Learn more about starting a home staging business.

Home staging dresses up a home for sale in a way that makes it appealing to potential buyers. Studies show that staged homes sell faster and for a higher value than unstaged homes.

Home staging can be a very profitable business. Earnings will depend on the location and professional network of the business.

Learn more about starting a home staging business.