Do I Need an LLC for My House Painting Business?
Starting a limited liability company (LLC) for your house painting 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 house painting business, lawsuits can arise from things like employees negligently using the incorrect type of paint, or not properly covering a customer’s floor and furniture before painting.
LLCs are also affordable, highly flexible (from a tax point-of-view), and can make your house painting business seem more credible.
Recommended: Use Northwest to form an LLC for $29 (plus state fees).
Should I Start an LLC for a House Painting 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 House Painting Business
By starting an LLC for your house painting 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.
House painting businesses will benefit from liability protection because of the risk of being sued for personal injuries, property damage, and more.
Example 1: A client believes that the paint you used on their home wasn’t actually low VOC, making them and their family incredibly ill. If you are found in the wrong, your personal assets are protected with limited liability so they cannot be taken in the settlement.
Example 2: While painting, one of your workers accidentally knocks over an art piece, shattering it. The owners sue for the cost of the item. As the owner, your assets will not be used to pay since they are protected with limited liability from being an LLC.
Example 3: A client comes to check on your progress and trips over some paint cans, breaking their arm. You are sued for the cost of the medical bills. Being an LLC, limited liability keeps your personal assets from being used to pay for this.
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 House Painting 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 house painting 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
House painting businessers 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 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
- 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.
Do LLCs Need Insurance?
All businesses need insurance to protect their business assets — even LLCs. This is because the limited liability protection from being an LLC protects your personal assets, not your business assets.
You and your crew may find themselves in dangerous situations while painting, like working on ladders or carrying heavy equipment. Carrying insurance for your business can help your employees with medical payments should they be injured while on the job.
Common Situations Business Insurance May Cover for a House Painting Business
Example 1: During a home renovation project, your company vehicle rolls and collides with the home, damaging the wall. They are suing you to replace the wall and for the cost of temporary housing while the project is completed. Your general liability policy should cover the damages as well as any associated legal fees.
Example 2: While on break, a painting ladder is left out and the homeowner trips over it, breaking his wrist. A general liability policy should cover their medical costs and other damages they might be seeking.
Example 3: A paint delivery person slips and falls on your shop’s freshly mopped floor, tearing a tendon in his knee. General liability insurance should cover his medical expenses and your potential legal fees.
Other Types of Coverage House Painting 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 house painting businesses should obtain.
Commercial Auto Insurance
Commercial auto insurance will cover the cost of repairing your vehicle if you are involved in an accident. If you are at fault, it will also cover the cost of damage to other vehicles and medical expenses for anyone injured.
Inland Marine Insurance
Inland marine insurance is particularly important for contractors and construction professionals who travel from site to site with their equipment and tools. Be sure to discuss the limitations of the policy with your insurance representative to ensure proper coverage, regardless of where your business property is used and stored.
Inland marine policies are often offered as part of a business owner’s policy (BOP).
Commercial Umbrella Insurance
As a house painter, you could potentially work on very high-valued homes and businesses, leaving you exposed to increased liability expenses. If a lawsuit arises that exceeds the limits of your general liability policy, you could be held personally responsible for a portion of that lawsuit. Commercial umbrella liability insurance offers an added layer of protection, paying damages awarded that surpass the limits of your primary 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, workers' compensation insurance, and commercial auto insurance.
Read our Business Insurance article for more info.
The initial investment for the necessary equipment to begin a small interior house painting business can be as little as $500. At a minimum, you will need the following items:
- An adjustable ladder
- Rollers, trays, and brushes
- Drop cloths
- A caulking gun
- A masking dispenser
- A scraper
- A wire brush
- A few sheets of 60 to 80 grit sandpaper
Visit our How to Start a House Painting Business guide to learn more about the costs of starting and maintaining this business.
You will have to pay to remain licensed, bonded, and insured. In addition, you will need to buy painting equipment and pay for advertising, insurance, and transportation,
Learn more about running a house painting business.
A house painting business charges customers for each job based on the amount and complexity of the work.
Learn more about starting a house painting business.
The profits of a house painting business depend on the business's number of jobs, the amount charged per job, and overhead costs.
Learn more about starting a house painting business.
