Should I Start an LLC for My Miniature Golf Course?

Starting a limited liability company (LLC) for your mini 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 mini golf course, lawsuits can arise from things like guest injury due to a poorly-maintained course or continually missing rent payments due to a financial issue.

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

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

Do I Need an LLC for a Miniature 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 Miniature Golf Course

By starting an LLC for your miniature 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.

Miniature golf courses will benefit from liability protection because sports and entertainment venues, including miniature golf courses, face a variety of risks associated with guests visiting the location and using equipment.

Example 1: Your mini golf course is sued by the architect that created your course. He claims the invoice was for additional work. But that work was not part of the contract. If he wins in court, any payment to him must be made from business assets. Your personal assets would not be included.

Example 2: Your landlord takes you to court for failing to maintain the property according to the terms of the lease. You assert that you have. Nevertheless, if you lose the case, your personal assets could not be levied upon to satisfy the judgment. They are shielded from such suits.

Example 3: You decide to close your mini golf course because business has fallen off considerably. Sadly, you will not be able to pay off all creditors in full, since business liabilities exceed business assets. Regardless, no creditor will be able to take action against your personal assets, which are protected by the limited liability barrier of your LLC.

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 Miniature 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 miniature 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

Miniature 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 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.

Mini golf courses are especially prone to receiving claims for personal injury. This would be covered by general liability insurance, which also covers damage to property, legal fees, and costs to settle a lawsuit.

Common Situations Business Insurance May Cover for a Mini Golf Course

Example 1: As an employee demonstrates how to swing the putter to a group of guests, he accidentally topples an overhead display shelf. The shelf falls off the wall onto a guest’s foot, breaking several small bones. General liability insurance would pay for the guest’s medical costs and any settlement money awarded in a lawsuit.

Example 2: You’ve been meaning to fix a tear in the AstroTurf near one of your holes, but a busy weekend kept you from closing the area to make repairs. Guest accidentally knocks over the “caution” sign you placed near the tear and a child trips and knocks out two teeth. The child needs stitches and the parents are angry. General liability insurance would cover the child’s medical bills and any legal costs if the parents decide to sue.

Example 3: As a delivery driver stops by with a shipment of golf balls, they seriously injure themselves by slipping on a wet floor. The delivery driver sues not only for their medical costs but also for additional damages. Your general liability policy would pay for your legal defense and any settlements awarded to the delivery driver.

Other Types of Coverage Mini 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 mini golf courses should obtain.

Commercial Auto Insurance

Since you will be driving your business vehicle on public roadways, you are mandated by the state to carry a commercial auto policy. Auto insurance protects not only your vehicle but any liability you may have in an accident. Your personal car insurance will not cover you if you are driving the business vehicle, even if you are off duty.

Commercial Property Insurance

If you own your location instead of renting, you need commercial property insurance to protect the building. Property insurance also covers items owned by your business.

Mini golf courses invest heavily in the infrastructure used to provide their services. Be sure that you have enough coverage to replace and maintain that infrastructure in case of damage or loss. This coverage is generally offered in a Business Owner Policy (BOP).

In addition to the policies outlined above, there are a few other types of coverage your mini golf course may require depending on certain aspects of your operations. Some of these might not apply to you, so be sure to ask your agent which policies are right for your business.

Workers' Compensation Insurance

If your mini golf course has any employees (full-time or part-time), you are legally required to carry workers’ compensation insurance. This type of coverage will help compensate your employees in the case that they get injured on the job.

Read more about workers’ compensation insurance.

Business Interruption Insurance

In the event of a fire, flood, or other catastrophes, there is a good chance your business operations will be halted for some time. Business interruption coverage is designed to help you recoup a portion of the revenue your business would lose due to the inability to operate.

This type of insurance is typically included in a business owner’s policy.

Commercial Umbrella Insurance

Umbrella coverage allows you to extend above and beyond the standard limits of your other business insurance policies. If you are faced with a large lawsuit or other claim situation, there’s a possibility that the coverage limits of your standard policies will be insufficient. In this case, your umbrella policy will allow you to surpass these limits.

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 property insurance.

Read our Business Insurance for Mini Golf Courses article for more info.

Startup costs for a mini golf course can be as high as $500,000. Land development is a costly affair. Chief ongoing expenses will be rent ($6,000+), salaries, utilities ($1,500), and commercial insurance ($500).

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

The main ongoing expenses will include the cost of utilities, insurance, replacement materials and equipment, and worker payroll.

Learn more about running a miniature golf course.

Fees are charged to customers for use of the golf course for a certain period of time or for a set number of rounds.

Learn more about starting a miniature golf course.

Miniature golf courses are a smaller, more family-friendly version of regular golf. Most miniature golf courses are also accompanied by a number of other entertainment attractions such as arcade games, food, or activities such as climbing walls.

Since there are very few ongoing costs associated with maintaining the business, miniature golf courses have the potential to profit upwards of $100,000 a year.

Learn more about starting a miniature golf course.