Last Updated: May 10, 2024, 9:51 am by TRUiC Team

Should I Start an LLC for My Makeup Artist Business?

Starting a limited liability company (LLC) for your makeup artist 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 makeup artist business, lawsuits can arise from things like adopting a logo for your business that is already protected by copyright or personal injury inflicted on a client due to using products with known allergens.

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

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

Do I Need an LLC for a Makeup Artist 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 Makeup Artist

By starting an LLC for your makeup artist 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.

Makeup artists will benefit from liability protection because of the variety of liability issues related to the physical application of products to clients. In addition to general injuries that may be sustained while the client is within the confines of your property, certain product allergies present risk. 

Example 1: A model books a session with you before her photo shoot. Repeated flashbacks from her makeup in the pictures cause the photographer to angrily call off the shoot. She discovers afterward that SPF in the moisturizer and foundation used resulted in these flashbacks, and she proceeds to sue. Liability protection will ensure your personal assets are not affected by any fees or compensation associated with the lawsuit.

Example 2: A client suffers a severe rash after having her makeup done by one of your employees. You later discover that your employee didn't confirm any allergic reactions before selecting which products to use, and you sanction them accordingly. Still, your high-profile client has filed a lawsuit against your business. Your LLC structure will help to safeguard your personal assets even if the business is found to be guilty.

Example 3: An eyebrow waxing session with client results in painful burns and blisters. Outraged, your client presses charges, and your business faces a corresponding lawsuit. In this scenario, your personal assets will be protected from any damages for which the business is found to be responsible.

Example 4: A client has an allergic reaction to one of your products. The reaction is severe, and they must spend the night in the hospital.

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 Makeup Artist 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 makeup artist 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

Makeup artists 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 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.

Makeup artist businesses need insurance to protect their financial accounts from lawsuits arising from bodily injury, property damage, and allergic reactions, to mention a few.

Common Situations Business Insurance May Cover for a Makeup Artist Business

Example 1: While discussing cosmetics with a client, you unknowingly recommend a mixture to which the client is allergic, triggering a reaction that requires some medical attention. If this incident went to court, general liability insurance would likely cover any medical expenses incurred by the client’s allergy treatments, as well as any settlements.

Example 2: Your business films an advertisement that is aired on TV. In the ad, a pair of actors play happy customers who refer to another local makeup artist’s business, at which point the ad shows an image of a clown. The other business learns of your ad and takes legal action against you, claiming that your ad’s clown image is a slanderous misrepresentation of their services. General liability insurance would probably cover your business in a resulting settlement or court-mandated payment.

Example 3: A busy employee drops an open bottle of conditioner, spilling it on the floor. As he runs to find a mop, an elderly customer walks over the spill and slips, sustaining a minor hip fracture. If your business were sued as a result, any hip injury compensation or settlement would likely be covered by general liability insurance.

Other Types of Coverage Makeup Artist 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 makeup artists should obtain:

Professional Liability Insurance

All varieties of makeup artists work with clients who look to them for recommendations and advice in the world of cosmetics. Clients may rely on their makeup artists to help them cultivate the right appearance for professional events or personal endeavors. Your business should be confident in its provided services, but if a client believes they have lost an important professional opportunity due to your cosmetic advice or a professional error, you do not want to be held liable without a professional liability policy. This is a key policy to take out for any business that makes important recommendations or conducts sensitive personal modifications for its clientele.

Business Interruption Insurance

Ideally, a business can persist through the toughest of times. In reality, many successful businesses suffer temporary lulls or shutdowns due to possible disasters like fires, flooding, illness, or extended power outages. Depending on how your makeup artistry business operates, interruptions may leave you unable to access your crucial business supplies or prevent you from personally fulfilling scheduled sessions with clients.

If your business is interrupted for a significant amount of time, this policy can help to make up for estimated losses during the covered interruption. Business interruption insurance is frequently offered in business owners’ policies laid out by insurance companies.

Workers’ Compensation Insurance

If you manage a business with employees working under you, workers’ compensation insurance may become mandatory, depending on state requirements. However, no business is perfectly safe from on-the-job accidents, and this policy can come in handy for something as simple as an employee falling off a ladder while reaching toward a high shelf. Employee health, disability, and death are all covered under this policy.

Product Liability Insurance

You may choose to expand your makeup artistry business with the sale of a product line. This can be a patented product of your company’s own manufacture or your sale of a third party’s product. Either way, cosmetic products are generally purchased under the assumption that they are safe for use on a customer’s body.

If a product from your shelf is misused or found to contain ingredients that demand a recall, product liability coverage can protect your business from serious customer health claims. This type of policy will be customized to your business, focusing on the type of product you are selling as well as anything that might go awry through the products’ use.

Commercial Umbrella Insurance

This insurance is a secondary measure that works to enhance certain existing policies your business may have taken out. As long as your other policies are upgraded to the highest limits offered, commercial umbrella insurance can extend its functionality even further. This is a measure for business owners who like to have every last base covered. If you are concerned that the limits of your existing policies will not quite leave you feeling secure, an umbrella policy may be the way to go.

For instance, if your makeup artistry business is located in an area where crime has begun to rise, your insurance company’s provided policy for break-in protection may be based on an earlier estimation of lower risk. An umbrella policy could be a way to gain extra protection by acting as a supplementary provision where your original policy stops its coverage.

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.

Read our Makeup Artist Business Insurance article for more info.

The beauty of starting a makeup artist business is the absence of high starting costs. If you are willing to skip paying for a business lease, you can start with $8,000 or less. This sum can then be spent on things such as the design of a professional website, traditional advertising, and purchasing new makeup and makeup supplies.

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

Ongoing expenses to consider will be the price of advertising, the cost of additional supplies as you continue, and the cost of gas associated with your travels.

Learn more about running a makeup artist business.

Primarily, makeup artists make money by charging fixed prices for a variety of different makeup services that they provide.

Learn more about starting a makeup artist business.

Whether selling makeup services or actual products to clients, makeup artists are important for special occasions. While the primary audience of makeup artists is young to middle-aged women, trends in professional and personal photoshoots have ultimately opened up the opportunity to a whole new population.

As a high face-to-face contact service, makeup artist businesses stand to gain from new client opportunities by word of mouth and social media advertising. The average profit margin for a makeup artist business needs to be at least 40% to be sustainable.

Learn more about starting a makeup artist business.

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