Last Updated: May 10, 2024, 8:04 am by TRUiC Team

Should I Start an LLC for My Notary Business?

Starting a limited liability company (LLC) for your notary public 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 notary public business, lawsuits can arise from things like incorrectly verifying the signee of a document, not notarizing a document before its stipulated deadline, and false claims of experience in order to justify higher fees.

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

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

A notary public stamp

Do I Need an LLC for an Notary 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 an Notary Business

By starting an LLC for your notary 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.

Notary businesses will benefit from liability protection because of the risks that come with owning almost any business, including things like trademark infringement and workplace injuries. Notaries act as witnesses to the signing of legal documents, meaning there is a lot of personal interaction with clients. This could be in the notary’s office or even in the home of the client or notary.

Example 1: Your notary public business failed to properly verify the identity of the person signing a document, which led to it later being challenged in court. As a result, your business was sued for negligence. In the lawsuit that follows, you are prevented from being held personally responsible for this as a result of your limited liability protection.

Example 2: An employee at your notary public business falsely claimed to a client that they possessed special experience that warranted higher fees. After discovering this deception, the client sued your business for fraud. Limited liability prevents the court from seizing your assets to pay any damages.

Example 3: Your notary public business agrees to notarize a document for a client before a specified date. However, after being overwhelmed with work, your business was unable to notarize the document before the deadline, which led the client to sue your business for breach of contract. In this instance, any liability to pay the plaintiff damages will be limited to your business’s assets, not your own. 

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 an Notary 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 notary 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

Notary 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 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.

All LLCs are posed with the possibility of suffering financial losses by unexpected risks, and this remains true for notary public businesses. 

As a result, getting business insurance is generally recommended because it can help you nullify the threat of your business’s assets becoming seized by the court as a result of:

  • Employee injuries
  • Misleading advertising
  • Fraud
  • Slander
  • Intellectual property right disputes

Common Situations Business Insurance May Cover for a Notary Public Business

Example 1: Your redesigned business logo is similar to a logo already under copyright by a competitor. If they decide to sue for copyright infringement, general liability insurance would cover your legal costs and any payouts awarded in a settlement.

Example 2: During a meeting in your office, one of your clients accidentally trips on a vacuum cord and severely injures their head. If the client takes you to court, general liability insurance would cover your legal costs and any awarded damages.

Example 3: As you move large boxes of paper into your building with a dolly, a client arrives early for an appointment and heads into your side entrance. You don’t see the client ahead of you and accidentally run over their foot with the heavy dolly, causing significant injury. General liability insurance would cover your client’s medical costs and any related legal fees.

Other Types of Coverage Notary Public 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 notary businesses should obtain.

Workers’ Compensation Insurance

Most states require businesses to carry workers’ compensation insurance for their part-time and full-time employees. This coverage protects your employees if they become injured at work or fall ill after a work-related accident. It not only covers an employee’s medical bills and lost wages if they need time to recover, but also any disability benefits stemming from a work-related accident.

Commercial Property Insurance

You’ve made a major investment in the equipment, supplies, and other tools necessary to run your business. If a fire, severe weather, or other incident damages your business property, commercial property insurance would cover the cost of repairing or replacing your equipment.

Commercial Umbrella Insurance

Even the most responsible business owners can sometimes face a lawsuit that threatens to exhaust the limits of their primary insurance coverage. Commercial umbrella insurance protects you from paying out-of-pocket for any legal fees and awarded damages that exceed your primary policy.

Home-Based Business Insurance

If you operate from your home, you can't rely on your homeowner’s insurance policy to protect your business in the event of an accident. Consider adding a home-based business insurance policy to your existing homeowner’s policy or business owner's policy (BOP) to ensure adequate coverage for your business equipment.

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 Business Insurance article for more info.

The exact cost of starting up your notary public business is highly dependent on whether you intend to own a physical storefront. Without one, startup costs are unlikely to be higher than $5000.

This figure should be sufficient to cover the relevant licensing and training fees, a professional business website, and a notary mentor (if this is required in your state).

Visit our How to Start an Notary Business guide to learn more about the costs of starting and maintaining this business.

Monthly expenses for a notary business include:

  • Fuel costs — mobile notaries spend much of their time traveling from customer to customer
  • Website maintenance
  • Marketing materials
  • Fees for local and national associations
  • Insurance
  • Payroll and taxes
  • Continuing education requirements vary from state to state — the standard is every four years

Learn more about running a notary business.

Notary businesses charge customers to act as a witness and notarize documents.

Learn more about starting a notary business.

A notary public acts as a legal witness when people sign legal documents. These can include contracts, property deeds, mortgages, and other types of documents.

Notary publics often visit people in their homes. Alternatively, they can have a physical office.

A notary business can be very profitable with a good-size client base, in part because they have low overhead costs.

Learn more about starting a notary 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