Should I Start an LLC for My Photography Business?

Starting a limited liability company (LLC) for your professional photography 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 photography business, lawsuits can arise from things like failing to conduct a client’s photoshoot before an agreed-upon date and personal injury suffered by a client on set.

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

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

Do I Need an LLC for a Photography 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 Photography Business

By starting an LLC for your professional photography 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 photography businesses will benefit from liability protection because of the risks associated with inviting clients into their studios and visiting the various venues they’re hired to photograph.

Example 1: While in your photography studio, an employee bumps into a client and spills boiling hot coffee on them. Due to the severity of the burns, this client filed a personal injury lawsuit against your business. Limited liability would protect your personal assets from being used by the court to satisfy any awards of damages granted to the plaintiff.

Example 2: A photographer working for your business lied to a customer about having qualifications he did not possess. After seeing the poor quality of this photographer’s work, and believing your business to be complicit in his deceit, the client sued your business for fraud. In the ensuing litigation, the court can only use your business’s assets to award the plaintiff damages.

Example 3: Your photography business arranged with a client to conduct a photo shoot before a specific date. However, due to timetabling issues, your business was unable to fit them in beforehand and missed the agreed-upon date. As a consequence, this client suffered significant financial loss which motivated him to sue your business for breach of contract. In this instance, the court is prevented by limited liability from seizing your personal assets to satisfy this claim.

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 Photography 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 photography 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 photography 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 Photography Business

Example 1: During a meeting in a client’s home to discuss an upcoming photo shoot, you walk through the living room, trip, and fall into her entertainment center. Your fall breaks a large television and some other equipment. General liability insurance would pay to replace her damaged property.

Example 2: One of your assistants accidentally knocks a client to the ground during a shoot. The client suffers a concussion and decides to sue your business. The general liability insurance you carry will pay for your legal defense fees. It will also cover payouts or settlements if they are required to resolve the case.

Example 3: A local photographer has sent you a letter to inform you that you are being sued for slander. Although you are not certain how or when you might have slandered the competitor, you know that you need to hire an attorney to defend yourself. Your general liability insurance policy will pay for your legal fees as well as the cost of a settlement if you need to settle the case out of court.

Other Types of Coverage Professional Photography 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 tow truck companies should obtain.

Professional Liability Insurance

While you strive to deliver the highest level of service to your clients, there’s always a chance someone might decide you made a mistake that caused them harm. If a client sues your business for negligence, professional liability insurance would cover your legal fees and any required settlement.

Commercial Property Insurance

You made a major investment in the photography equipment, supplies, furnishings, hardware, software, and real estate needed 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.

Commercial Auto Insurance

If you have a car, truck, or van that you use primarily for business, your state most likely requires you to carry commercial auto insurance. With a commercial auto policy, you can get help with repair or replacement costs if you are involved in an accident. If you cause the accident, the policy will help pay for damages to other vehicles as well, along with medical treatment for anyone injured.

Workers’ Compensation Insurance

If you have employees, chances are your state requires you to carry workers’ compensation insurance. Workers’ comp provides protection for your employees if they are injured performing job-related duties. If they are hurt on the job, they can get medical treatment through your policy. The policy will also help to cover lost wages if they are unable to work while they recover from their injuries.

Home-Based Business Insurance

If you run your business from your home, you may need this insurance to safeguard your equipment and the space in your home devoted to your business. A typical homeowners 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. You can typically purchase this coverage as part of a business owners policy (BOP).

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 Small Business Insurance article for more info.

Many professionals recommend preparing to spend between $10,000-$15,000 on necessary equipment alone. Double this amount if you are planning to work from your own studio space.

You will also need to consider the costs of insurance, a professional-looking website, and some accounting software.

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

The main ongoing expenses include costs associated with updating and maintaining equipment, licensing photo-editing software, and traveling to photo shoots.

Learn more about running a professional photography business.

Professional photographers make money by charging clients an hourly, event, or special package rate for their services.

Learn more about starting a professional photography business.

Professional photographers provide photography services for a wide variety of markets, from weddings and special events to magazine freelance work.

Your profitability as a professional photographer will largely depend on the number of photo shoots you can conduct in a day and how often clients hire you.

Learn more about starting a professional photography business.