Should I Start an LLC for My Paintball Field?

Starting a limited liability company (LLC) for your paintball field 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 paintball field, lawsuits can arise from things like a customer experiencing an eye injury after their goggles were not checked properly or making misleading claims about the overall safety of playing paintball.

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

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

Do I Need an LLC for a Paintball Field?

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 Paintball Field

By starting an LLC for your paintball field, 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.

Paintball fields will benefit from liability protection because of the risk of injuries, either through the use of potentially hazardous equipment or through exposure to potential safety hazards while being on the premises.

Example 1: While in the midst of a game of paintball at your arena, a customer suffers a serious eye injury after their goggles break when hit with a paintball. As a result, the customer brought a lawsuit for bodily injury against your business. If it is found liable to pay the plaintiff compensation, your personal assets are precluded from being used to satisfy this.

Example 2: As part of a recent marketing campaign, your paintball field decided to include a meme poking fun at one of your competitors. However, the competitor alleged that this meme had greatly negatively affected its reputation and thus sued for libel. In the following lawsuit, only your business assets could be used to satisfy any compensation you could be required to pay.

Example 3: A customer attempted to sue your business for damaging his phone after not being asked to remove it from his pocket before entering the arena. As a result, the phone was irreparably destroyed after the customer was shot in the leg with a paintball gun. Limited liability would ensure that your personal assets are protected in this lawsuit.

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 Paintball Field

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 paintball field 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

Paintball fields 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.

Due to the sheer value of the assets owned by your paintball field (such as the guns and business property), insurance is an operational requirement.

Common Situations Business Insurance May Cover for a Paintball Field

Example 1: During a match, a wall falls on a player, and they are taken to the hospital for evaluation. General liability insurance would likely cover medical treatment associated with any injuries sustained in the accident.

Example 2: When setting up a paintball gun for a customer, an employee accidentally punctures a carbon dioxide cylinder’s seal without properly securing the cylinder. The cylinder takes off like a missile and strikes a customer in the back of the head, knocking them to become unconscious. General liability insurance would likely cover any medical bills or a lawsuit filed over the accident.

Example 3: A team of paintballers drives some distance and books a hotel for a special tournament, only to find that the tournament has been canceled on the day of. They file a false advertising lawsuit seeking compensation for the travel costs incurred. General liability insurance would probably cover the lawsuit.

Other Types of Coverage Paintball Fields 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 paintball fields should obtain.

Commercial Property Insurance

Paintball arenas need commercial property insurance to protect their buildings and other physical assets. The insurance can be used to insure buildings, secondary structures, equipment, and supplies.

When selecting a commercial property policy, make sure the policy provides coverage for all of your arena’s structures and equipment. This includes any features you’ve built in the combat area as well as any equipment that’s rented or supplies that are sold to customers.

Commercial property insurance is commonly purchased as part of a business owner’s policy (BOP).

Workers Compensation Insurance

Most paintball arenas have employees and therefore need workers' compensation insurance. Workers' compensation insures against job-related injuries, which employees who participate in paintball competitions are at an increased risk for. Most states require businesses that have employees to carry the coverage.

Product Liability Insurance

Assuming your paintball arena sells or rents paintball guns, paintballs, and safety equipment, the business should have product liability coverage. This coverage protects against lawsuits arising from accidents caused by malfunctioning equipment that a business sells or rents.

Commercial Umbrella Insurance

Commercial umbrella insurance gives businesses additional liability protection. The coverage acts as a secondary form of liability coverage, covering claims after any underlying policies’ limits have been reached.

Because paintball is a potentially dangerous activity that can result in severe injury or death, commercial umbrella insurance is a coverage that you may want. If your business ever faces a major lawsuit as a result of a terrible accident, the coverage could help with legal and other costs.

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 Paintball Arenas article for more info.

It is estimated that you will need a minimum of $50,000 in order to open your paintball field. This figure should cover the costs of obtaining the operating license and permits you need (which vary by state), the construction of the paintball arena, and the purchase of the guns themselves.

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

Ongoing costs will include replacement material costs (paint, CO2 tanks, etc.), safety equipment replacements, salaries, utilities, as well as space rental fees.

Learn more about running a paintball field.

Entrance and equipment rental fees are charged in order to make a profit. Promotional events such as tournaments are sometimes held as well to generate revenue.

Learn more about starting a paintball field.

Paintball fields offer the equipment, environment, training, and guidance for those looking to engage in paintball competitions or tournaments.

Most paintball field owners profit between $20,000 and $30,000 in a year. Even more income can be made for individuals who own multiple fields and increase community engagement with the facility through special events.

Learn more about starting a paintball field.