Do I Need an LLC for My Land Surveying Business?

Starting a limited liability company (LLC) for your land surveying 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 land surveying business, lawsuits can arise from things like giving inaccurate land estimations to clients or indemnity disputes.

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

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

Should I Start an LLC for a Land Surveying 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 Land Surveying Business

By starting an LLC for your land surveying 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.

Land surveying businesses will benefit from liability protection because of risks associated with entering and working on clients’ properties.

Example 1: When one of your contracted land surveyors gives an inaccurate land estimation, your LLC faces a malpractice lawsuit. Since you didn’t personally act negligently, your business’s LLC classification will shield your personal assets from the claimant, regardless of how legitimate the lawsuit is.

Example 2: One of your employees fails to identify all of the easements in a specified property. After your client purchases the property, he files a lawsuit against your LLC, seeking damages. Here, limited liability will protect your personal assets from the claimant, even if your business is unable to compensate them.

Example 3: You acquire a business loan in order to finance your short-term costs and purchase new surveyor equipment. If you are unable to pay the loan’s installments back on time and begin accruing debt, the lending party will not be able to sue you personally as a result of your limited liability in law.

Example 4: A hole is accidentally left uncovered on a client’s property after completing a job, which leads the client to trip and break their ankle while walking on the property. They sue you for medical compensation.

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 Land Surveying 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 land surveying 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

Land surveying 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.

Your land surveying business especially needs insurance in order to protect its business assets (e.g., surveyor equipment, etc.).

Common Situations Business Insurance May Cover for a Land Surveying Business

Example 1: Your employee didn’t secure the area after completing a job, and a trespasser gets injured. If they name you in a lawsuit, general liability insurance would cover associated legal fees and awarded damages.

Example 2: A small hole isn’t filled in at the end of a survey job. Your client steps in the hole and has incurred significant medical bills. A general liability policy should cover his medical expenses.

Example 3: Your new website includes a photo protected under copyright law. The owner of the photo names your business in a lawsuit. General liability insurance should cover your legal fees and damages awarded by the court in a copyright infringement lawsuit.

Example 4: You applied for a loan to purchase more business equipment, and the bank requires evidence of liability insurance as part of the loan agreement. A general liability policy could help fulfill this obligation.

Other Types of Coverage Land Surveying 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 land surveying businesses should obtain:

Commercial Auto Insurance

If an auto accident involves you or a team member doing business-related activities, commercial auto insurance will cover the cost of repairing or replacing damaged property. It will also cover medical expenses, liability claims, and lost equipment. To protect your surveying business from suffering financial loss due to this claim, business owners should consider purchasing limits higher than the state-mandated minimum requirement.

You can purchase commercial auto insurance as a standalone policy or as part of a business owner’s policy (BOP), depending upon the carrier.

Commercial Property Insurance

Whether you own or rent the building your business operates out of, you should have a commercial property insurance policy. When a loss, such as fire, theft, or windstorm, occurs, this policy pays to repair and/or replace business-owned property. Owners should consider coverage limits alongside the cost to replace everything should a total loss occur.

You can purchase commercial property insurance as part of a business owner’s policy (BOP).

Inland Marine Insurance

In this profession, business tools are often used away from the company’s premises, leaving you uninsured or underinsured if a loss occurs. An inland marine policy will pay for losses while in transit or at a customer’s property. This can fill the coverage gap left by a standard commercial property insurance policy.

Professional Liability Insurance

If a customer files a lawsuit against your company, citing harm due to your professional negligence, regardless of the claim’s merit, they could take you to court for damages. Professional liability insurance, also known as Errors and Omissions (E & O) insurance, ensures coverage of your legal fees and awarded damages up to the limits of your policy.

Workers’ Compensation Insurance

Workers' compensation helps protect your business’s most valued assets: the employees. This state-mandated insurance policy covers the medical bills of employees who get injured or fall ill while on the job. If the injury is serious and the worker must take time off of work, it would reimburse them for part of their lost wages. In the event of a lawsuit, it would cover the business owner’s legal fees.

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 auto insurance.

Read our Business Insurance article for more info.

Since becoming a land surveyor is a professional specialty that requires training, it can be quite expensive.

You will also need to purchase surveying and computer equipment, which can cost tens of thousands of dollars, as well as:

Rent an office
Hire staff
Pay for advertising

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

Some of the ongoing expenses will include the cost of equipment maintenance and replacement, labor, rent, and other office expenses.

Learn more about running a land surveying business.

Profit is generated through the sale of services to clients for the precise measurement of a piece of land.

Learn more about starting a land surveying business.

Land surveying businesses are involved in the essential service of measuring the boundaries, lengths, and depths of commercial and residential properties. Land surveyors can also help to settle disputes over property lines between different owners’ properties.

Land surveyors have the potential to make upwards of $60,000 a year.

Learn more about starting a land surveying business.