Starting a limited liability company (LLC) for your mobile DJ 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 mobile DJ business, lawsuits can arise from things like your DJ arriving late to a wedding reception, a fire at a client’s property caused by the negligent positioning of your equipment, or a power surge caused by your equipment forcing a festival to shut down early.
LLCs are also affordable, highly flexible (from a tax point-of-view), and can make your mobile DJ business seem more credible.
Recommended: Use Northwest to form an LLC for $29 (plus state fees).
Do I Need an LLC for a Mobile DJ 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 Mobile DJ Business
By starting an LLC for your mobile DJ 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.
Mobile DJ businesses will benefit from liability protection because of the risk of being sued for personal injuries, property damage, libel, and more.
Example 1: A mobile DJ business is hired to provide music for a wedding reception, but the DJ arrives late and the reception is delayed as a result. In the event of a lawsuit, limited liability protection will help to safeguard the owner's personal assets from any associated fees if the business is found to be liable.
Example 2: A mobile DJ business is hired to provide music for a school dance, but the DJ sets up the equipment improperly and an electrical fire breaks out. As a result, the school sues the business for damages. If found liable, limited liability protection will help ensure that only the business’s assets will be used to cover any compensation awarded in the lawsuit.
Example 3: A mobile DJ business is hired to provide music for a music festival, but their equipment malfunctions and the event is forced to shut down early. As a result, the event organizers sue the business for damages. Regardless of the court’s ruling, limited liability protection will help ensure that the owner's personal assets remain unaffected.
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 Mobile DJ Business
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 mobile DJ 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
Mobile DJ 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.
How to Form an LLC
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 limited liability protection from being an LLC protects your personal assets, not your business assets.
Insurance can help a mobile DJ business mitigate financial risks associated with liability for accidents or injuries at events, as well as damage to or loss of equipment.
Common Situations Business Insurance May Cover for a Mobile DJ Business
Example 1: As you welcome a potential customer into your showroom, they accidentally trip over a cord and break their arm. General liability insurance coverage would cover the customer’s medical costs and any other damages in the event of a lawsuit.
Example 2: You’re unloading your equipment from a pallet jack and accidentally drop it on an uneven surface. The fall smashes a huge amp into the stage and breaks through the floorboards. Not only is the stage damaged, but the amp also rips through the venue’s existing setup. General liability insurance would cover the cost of repairs to the venue as well as replace any damaged, third-party equipment.
Example 3: You often rent equipment to other DJs as well as customers hosting their own events. While a customer reviews your inventory, a set of decks falls from a display unit onto their shoulder. General liability coverage would cover the customer’s medical costs and any other damages in the event of a lawsuit.
Other Types of Coverage Mobile DJ 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 mobile DJs should obtain:
Commercial Auto Insurance
Whether you have a regular gig at the coolest club in town or you work more private events, you’ll need to regularly transfer your expensive equipment between venues. Even if you use your personal vehicle, you’ll need to invest in commercial auto insurance to ensure protection in the event of an accident. Personal auto insurance does not cover damages from accidents that occur while using your car for business purposes.
Commercial Umbrella Insurance
This insurance option provides coverage beyond your current policy limits in the event of an expensive accident or lawsuit. While an umbrella coverage policy helps cover costs if you cause an accident or damage a venue, it may require you to set your other insurance policy limits at their maximum levels.
Workers’ Compensation Insurance
If you employ part-time or full-time workers, you may be required to carry workers’ compensation insurance by state law. This insurance option covers medical expenses and other costs if an employee becomes injured on the job. Workers’ compensation insurance also covers disability and death benefits stemming from work-related accidents.
Data Breach Insurance
If you keep any customer data on file – including credit card numbers and addresses – this sensitive information may be vulnerable to cyber attacks. Data breach insurance offers peace of mind with an extra layer of protection in the event of a system breach.
Should I Start an LLC FAQ
Which is better for my mobile DJ business — an LLC or sole proprietorship?
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.
What are the costs to start and maintain a mobile DJ business?
To start a Mobile DJ Business, you will need a laptop, music, PA equipment, lights, a microphone, uniforms, marketing materials, legal and accounting assistance, a vehicle, and insurance. The costs for sound and light equipment may range between $20,000 - $40,000.
Visit our How to Start a Mobile DJ Business guide to learn more about the costs of starting and maintaining this business.
What are the ongoing expenses of running a mobile DJ business?
Ongoing expenses for a mobile DJ business include:
- Purchasing new music regularly
- Advertising and website maintenance
- Travel time and fuel costs
- Maintenance of sound/lighting equipment and purchase of new equipment as needed
Learn more about running a mobile DJ business.
How do mobile DJ businesses make money?
A mobile DJ business charges clients for each booking.
Learn more about starting a mobile DJ business.
What is a mobile DJ business and is it lucrative?
Most people like hearing music at parties and other social events. Some event planners hire musicians to play live, but this option is relatively expensive. A mobile DJ is often a cheaper alternative. Other advantages of mobile DJs include that they require less space than a band and can play a much broader variety of music.
Profits depend on how many bookings you have, how much you charge per booking, and your overhead costs.
Learn more about starting a mobile DJ business.