Should I Start an LLC for My Meditation Business?

Starting a limited liability company (LLC) for your professional meditation 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 professional meditation business, lawsuits can arise from things like clients claiming your guidance made them more stressed and physical injury.

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

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

Do I Need an LLC for a Professional Meditation 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 Professional Meditation Business

By starting an LLC for your professional meditation 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.

Professional meditation businesses will benefit from liability protection because of the risk of injuries on business property and other general business risks.

Example 1: A client is attempting to sue you, stating that your meditation lead to them being more stressed than before, resulting in lost income. Since your business is an LLC, your personal assets are covered by limited liability so they could not be taken in the settlement if the court rules against you.

Example 2: While waiting for their session to begin, some decorative art falls on a client and they suffer a concussion. They sue for medical expenses and lost wages. Your personal assets could not be used to pay for this since they are protected under limited liability as an LLC.

Example 3: You take out a small business loan to expand your business but miss several payments. The bank is seeking collateral. Limited liability as an LLC protects your personal assets so they could not be repossessed to cover this cost.

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 Professional Meditation 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 professional meditation 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

Professional meditation 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.

Common Situations Business Insurance May Cover for a Professional Meditation Business

Example 1: You’ve decided to see an important VIP client before regular business hours to help accommodate her schedule. She arrives at her appointment while your cleaners are still in the building and slips on the wet lobby floor, seriously injuring herself. Your general liability insurance will likely cover her medical bills and your legal fees if there is a lawsuit.

Example 2: Your loading dock door is damaged, making it necessary to receive shipments through an alternate entrance. An employee unloads the van through the front lobby but loses control of the dolly and sends it slamming into a customer. The customer is seriously injured and threatens to take you to court. General liability insurance will likely pay for their medical expenses and any settlement payouts.

Example 3: After successfully launching a new advertising campaign for your business, you receive an influx of new clients. Unfortunately, a competitor has also seen the new television commercials and believes you’ve libeled their business. Your general liability policy will likely pay for your legal fees and any damages if you settle the claim out of court.

Other Types of Coverage Professional Meditation 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 professional meditation businesses should obtain.

Workers’ Compensation Insurance

Most states require any business with part-time or full-time employees to carry workers’ compensation insurance. This coverage will help to cover an employee’s medical bills if they are injured at work or become ill following a work-related accident. Additionally, if they are unable to return to work, they may be eligible to receive disability benefits.

Professional Liability Insurance

If a client believes that your advice has resulted in an injury or other issues, they may seek damages. In this case, professional liability insurance will pay for your legal fees and, any settlement payments.

Commercial Property Insurance

To create a tranquil and welcoming atmosphere at your office, you’ve probably invested a great deal of time and money into your equipment, furniture, and other tools of the trade. If any of these items are damaged or destroyed in a fire or other disaster, it’s likely that it would be very costly to replace them out-of-pocket. Commercial property insurance will cover the cost to replace or repair these items.

Data Breach Insurance

Offering a rewards program for your returning clients is a great way to thank them for their loyalty. But to do so, you must keep some of their important personal and financial information on file. If your computer system is ever breached by cyber attackers, this insurance policy will help to protect your business from potential lawsuits.

Read more about cyber liability insurance.

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 for Professional Meditation Businesses article for more info.

Startup costs vary greatly. While professional meditation sessions can be run out of your home, a 1,000 square foot studio can cost between $30,000-$500,000 depending on location, region, and interior decoration. Though not necessary, it is wise to invest $1,000-$2,000 in advertising.

Ongoing costs are minimal, only rent and continued advertising.

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

Typical ongoing expenses include rent, utilities, employee wages, and advertising.

Learn more about running a professional meditation business.

These businesses make money by charging clients a fixed rate for each session they attend.

Learn more about starting a professional meditation business.

Meditation businesses provide a space in which individuals can practice different forms of meditation for increased relaxation and focus. The average professional meditation business has the potential to earn nearly $47,000 in annual profits.

Learn more about starting a professional meditation business.