Do I Need an LLC for My Pet Waste Removal Business?

Starting a limited liability company (LLC) for your pet waste removal 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 pet waste removal business, lawsuits can arise from things like the pet waste removal team damaging a customer’s house, or injuring their pet, while carrying out their job.

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

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

Should I Start an LLC for My Pet Waste Removal 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 Pet Waste Removal Business

By starting an LLC for your pet waste removal 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.

Pet waste removal businesses will benefit from liability protection because of the risk of being sued for personal injury, and property damage.

Example 1: A customer's dog is injured while an employee is working at a client’s house, and the owner sues the business for veterinary bills and damages. In this scenario, limited liability protection would ensure that the owner's personal assets are protected from any costs associated with the lawsuit.

Example 2: An employee is injured while on the job and sues the business for medical expenses and lost wages. Limited liability protection would help to ensure that the owner's personal assets are shielded from any compensation associated with the lawsuit.

Example 3: A customer's property is damaged while the pet waste removal team is on the job, and the customer sues the business for damages. Limited liability protection would ensure that only the business’s assets will be affected if found liable.

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 Pet Waste Removal 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 pet waste removal 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

Pet waste removal 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 a pet waste removal business, insurance can help to protect against risks such as injury to employees or damage to equipment while on the job, as well as liability for any accidents or incidents that may occur on the property of clients.

Common Situations Business Insurance May Cover for a Pet Waste Removal Business

Example 1: During a visit to a potential client’s home, you trip over her cat, fall into her entertainment center, and destroy her large television. General liability insurance would pay to replace her damaged property.

Example 2: A competitor files a lawsuit against your company, claiming you libeled his business in your advertising campaign. While you’re unclear about how your advertising constitutes libel, you know you need to hire a lawyer to protect your business. General liability insurance would pay for your legal defense and any required settlement.

Example 3: While working in a client’s yard, an employee accidentally runs into the client and knocks her to the ground. The client breaks an arm in the fall and decides to sue your business for damages. General liability insurance would pay for your legal defense and any required settlement.

Other Types of Coverage Pet Waste Removal 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 pet waste removal businesses should obtain:

Commercial Auto Insurance

The vehicles you use primarily for your pet waste removal business require commercial auto insurance to protect the vehicle, driver, and others on the road in the event of an accident. Be sure to select a policy that covers not only accident-related vehicle repair costs and medical treatment for anyone injured but also sufficient protection for any business equipment or supplies you carry in your vehicle.

Commercial Property Insurance

You made a major investment to establish your business. In the event of a fire, theft, or natural disaster, commercial property insurance would cover the cost of repairing or replacing your business-related property. This includes structural damage to your building as well as the equipment and supplies you store there.

Workers’ Compensation Insurance

If you have any employees, most states will require you to carry workers’ compensation insurance for your part-time and full-time workers. 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 or death benefits stemming from a workplace accident.

Home-Based Business Insurance

If you run your business from your home, you may need home-based business insurance to safeguard the equipment and space in your home devoted to your business. A typical homeowner’s insurance policy may not cover business-related items or client injuries on your property if you don’t disclose you use your home for business purposes. In the event of a lawsuit, this coverage would pay for your legal fees and other associated 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 and commercial auto insurance.

Read our Business Insurance for Pet Waste Removal Businesses article for more info.

To start a pet waste removal business, you will need a vehicle and waste removal equipment such as shovels, rakes, and pooper scoopers. You may also need a website that outlines your services and rates. Total startup costs can range from $500 to a few thousand dollars.

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

Some of the ongoing expenses will include the cost of utilities, auto upkeep and maintenance, and disposal fees for the collected pet waste.

Learn more about running a pet waste removal business.

Profit is generated by charging clients various rates for the removal of waste, either by the hour, week, month, season, or year.

Learn more about starting a pet waste removal business.

Pet waste removal businesses dispose of pet waste for customers. While most pet waste removal services focus on dog waste, some services may focus on cat litter and other pet waste.

Profit can range from tens of thousands of dollars in your first years, to six figures in later years after establishing your client base.

Learn more about starting a pet waste removal business.