Should I Start an LLC for My Nutritionist Business?

Starting a limited liability company (LLC) for your nutritionist 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 nutritionist business, lawsuits can arise from things like negligently recommending a meal plan to a customer that exacerbates an underlying medical condition.

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

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

vegetables on a table in front of a Nutritionist

Do I Need an LLC for a Nutritionist 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 Nutritionist Business

By starting an LLC for your nutritionist 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.

Nutritionist businesses will benefit from liability protection because of the risk of professional liability, trademark infringement, and general business risks.

Example 1: An employee of your nutritionist business negligently misreads the file of a client and ends up recommending them a food that they are extremely allergic to. As a result, the client suffered a serious allergic reaction that sent them to the hospital and prompted them to sue your business for medical malpractice. In this scenario, your personal assets would be protected from a business liability to pay damages by limited liability.

Example 2: While visiting a customer in their home, an employee of your nutritionist business spills a bottle of red wine on the customer’s cream carpet, irreparably staining it. Consequently, the customer brings a lawsuit for this property damages against your business, alleging your business’s negligence caused it. Limited liability would ensure your personal assets are protected.

Example 3: In order to help get your nutritionist business off the ground, you decide to take out a loan. However, following a significant downturn in the economy, your business struggles and is not able to pay back this loan. As such, the creditor decides to bring a lawsuit against your business for defaulting on this debt. Your personal assets would remain protected by limited liability if your business is found liable to pay damages to the plaintiff.

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 Nutritionist 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 nutritionist 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

Nutritionist 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. For nutritionist businesses, this is particularly imperative due to the sheer value of the assets they own.

Common Situations Business Insurance May Cover for a Nutritionist Business

Example 1: A client is visiting your place of business for nutrition advice when she slips and falls on some ice outside your door. She breaks her hip and requires immediate medical care. She asks that you pay for her treatment. Your general liability insurance policy would likely cover this cost.

Example 2: Your receptionist is stocking shelves in your store with supplements when she accidentally bumps into a client. The client falls down and hits his head, sustaining a concussion. He decides to sue your business. The general liability insurance policy you carry will pay for your legal defense, including the cost of hiring an attorney and the cost of a settlement if one is required.

Example 3: You have just started using a new logo when you get a letter from an attorney stating that it is too similar to the one used by another business. The other business is suing your company for damages. Your general liability insurance will pay for your legal fees, including the cost of an attorney and the cost of a settlement if you settle out of court.

Other Types of Coverage Nutritionist 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 nutritionist businesses should obtain.

Professional Liability Insurance

As a nutritionist, you give professional advice to all of your clients. There is always the possibility that one of those clients could claim they were harmed by your advice and recommendations. If they decide to sue your business, professional liability insurance will pay for your legal defense as well as any settlement costs.

Product Liability Insurance

The supplements and other products you sell to your clients are supposed to help them lead healthy lives, but there is always the possibility that one of your products could cause harm—or perceived harm. If a client decides that your product caused him or her harm and sues your business, your product liability policy will pay for your legal fees and cover the cost of a settlement if you settle out of court.

Workers’ Compensation Insurance

If you have employees, chances are your state requires that you carry workers’ compensation insurance. If an employee is injured performing work-related duties, they can get medical treatment for the injury through workers’ comp. The policy will also help to pay for lost wages if the employee cannot work due to the injury.

Commercial Umbrella Insurance

An umbrella policy is designed to pick up where a general liability insurance policy leaves off. There are circumstances where the policy limits of general liability insurance can be exceeded—like if you lose a big lawsuit and must pay significant damages. Instead of having to pay the remaining damages out of pocket, you can rely on your umbrella policy to cover them until the limits of the policy are reached.

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 and professional liability insurance.

Read our Business Insurance article for more info.

The startup costs of a nutritionist business are extremely manageable. While you can pay extra for an office, this cost can be completely eliminated by using a space in your home for this purpose. Additionally, some of the initial capital will need to be reserved for buying a website, computer, and phone.

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

Ongoing expenses of running a nutritionist business include utilities, office supplies, marketing, professional body membership, and insurance.

Learn more about running a nutritionist business.

Nutritionists make money by charging their clients for consulting sessions. They also make money by offering group sessions through subscriptions and memberships.

Learn more about starting a nutritionist business.

The nutritionist and dietitian market in the United States is worth $472 million. The prospects for a nutritionist business are good, as people are increasingly conscious of the role of food in disease prevention. The focus on preventive medicine is also expected to drive demand for nutritionists.

The average profit margin for a nutritionist business can be as high as 60% to 70% because of the low overhead costs.

Learn more about starting a nutritionist business