Do I Need an LLC for My Mural Painting Business?

Starting a limited liability company (LLC) for your mural 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 mural painting business, lawsuits can arise from things like property damage (e.g., to neighboring properties as a result of an employee not doing proper clean-up) or employee injury.

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

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

a mural of Stonehenge on a wall behind a couch

Should I Start an LLC for a Mural 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 Mural Painting Business

By starting an LLC for your mural 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.

Mural painting businesses will benefit from liability protection because of the risk of property damage, copyright and trademark infringement, and other general business risks.

Example 1: Your mural painting business is sued by a paint vendor for discontinuing a supply contract. You have refused to go ahead with your obligations, believing the terms of the contract are unfair. If the court decision goes against you, judgment must be restricted to your business assets. Your personal assets would be protected.

Example 2: Your mural painting business is sued by a finance company when you pay off the loan early, alleging you incurred an early payment fee. If it wins the case, the finance company has recourse against your business assets, but not your personal assets, which are protected.

Example 3: A precipitous drop in demand forces you to close your mural painting business. Alas, business assets are not enough to pay off all creditors. Despite that regrettable circumstance, unpaid creditors are prohibited from forcing you to pay from your personal assets, which are protected by the limited liability shield of the 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 Mural 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 mural 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

Mural painting 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.

A mural painting business should protect itself against claims of copyright violation, as well as the risk of personal injury and damage to property. All of these risks are covered by general liability insurance.

Common Situations Business Insurance May Cover for a Mural Painting Business

Example 1: As you set up your painting equipment on the side of a client’s building, he comes over to discuss the mural, trips on your supplies, breaks a wrist, and demands you pay for his medical treatment. General liability insurance would cover his medical expenses.

Example 2: While you work at a client site, a wind storm knocks over your paint can and paint spills all over a nearby luxury vehicle. General liability insurance covers damage to property during the course of doing business and would pay to fix the damaged car.

Example 3: Another mural company sues your business for libel. While you disagree with the claim, you know you need to hire an attorney right away. General liability insurance would cover your legal defense costs.

Other Types of Coverage Mural 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 mural painting businesses 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. If your business is based out of your home, your homeowners' insurance will not cover the home when it is being used for commercial purposes. Property insurance also covers items owned by your business.

Mural painting businesses invest heavily in the paraphernalia that are used to complete their work. Be sure that you have enough coverage to replace all of your apparatus in case of 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 mural painting business 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 mural painting business 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.

Read our Mural Painting Business Insurance article for more info.

One thousand dollars ($1,000) can be enough to get your mural painting business up and running. Paint supplies may cost $200; a website and marketing materials $750. The main recurring expenses would be paint materials, travel and commercial insurance.

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

The ongoing expenses of a mural painting business include insurance, marketing equipment, paints, and supplies.

Learn more about running a mural painting business.

Mural painting businesses make money by charging for the murals that they create. They can charge by the hour, and others charge by the square foot.

Learn more about starting a mural painting business.

Mural painting businesses paint pieces of art on large surfaces like walls and ceilings. Local storefronts and public establishments are common clients, but private individuals may also commission mural works.

A mural painting business can be very profitable for muralists with steady work.

Learn more about starting a mural painting business.