Last Updated: May 13, 2024, 1:37 pm by TRUiC Team

Should I Start an LLC for My Resume Writing Business?

Starting a limited liability company (LLC) for your resume writing 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 resume writing business, lawsuits can arise from things like false promises about the success rate of your business’s resumes, plagiarizing parts of a client’s resume, and poor resume advice that causes a client to lose a job offer.

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

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

A resume, pencil, glasses, and mug of coffee on a table

Do I Need an LLC for a Resume Writing 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 Resume Writing Business

By starting an LLC for your resume writing 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.

Resume writing businesses will benefit from liability protection because of the risk of being sued for negligence, libel, and trademark infringement. 

Example 1: Your resume writing business has been providing services to many job seekers in your city. One of the clients that you have provided service to claims that the document did not help them secure an interview. If they decide to sue, limited liability protection ensures that your personal assets are protected from any damages resulting from the case.

Example 2: You receive a call from a former client asking for a refund for the resume writing service they had acquired. They claim that you made false promises and did not deliver the expected quality. Should they decide to sue, limited liability protection will ensure that your personal assets are safe from any damages resulting from the lawsuit.

Example 3: One of your clients claims that you have plagiarized parts of their resume and have used it to benefit other clients. They file a lawsuit against you, claiming copyright infringement. If the court finds the business guilty, only the business’s assets will be used in providing compensation.

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 Resume Writing 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 resume writing 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

Resume writing 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 loansgrants, and credit.

Northwest will start an LLC for you for just $29 (plus state fees).

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 limited liability protection from being an LLC protects your personal assets, not your business assets. 

Resume writing businesses need insurance to help protect them from potential losses they may incur as a result of their work. Insurance helps cover any costs associated with claims, such as legal fees or other damages related to mistakes made while creating resumes. 

Common Situations Business Insurance May Cover for a Resume Writing Business

Example 1: During a business meeting in a client’s home, you walk through the living room, trip over his cat, fall into an entertainment center, and smash a large television. General liability insurance would pay to replace your client’s damaged property.

Example 2: A competitor sues your company for libel. While you disagree with the accusation, you know you need to hire a lawyer to protect your interests. General liability insurance would pay for your legal defense.

Example 3: While visiting your place of business, a client slips on some wet flooring in the restroom, breaks a wrist in the fall, and decides to sue your business. General liability insurance would cover your legal defense costs and any required settlement.

Other Types of Coverage Resume Writing 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 resume writing businesses should obtain:

Professional Liability Insurance

While you work hard to produce resumes that meet your clients’ needs, 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.

Product Liability Insurance

While you strive to ensure the products you sell help clients land the jobs they want and need, there’s always a chance someone might decide your product caused them injury. In the event of a lawsuit, product liability insurance would cover your legal fees and any required settlement.

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.

Commercial Umbrella Insurance

While your general liability insurance policy covers most claims, some accidents or lawsuits may be so catastrophic that they threaten to exhaust the limits of your primary coverage. Commercial umbrella insurance protects you from paying out-of-pocket for any legal fees and awarded damages that exceed your primary policy.

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 possibly professional liability insurance.

Read our Resume Writing Business Insurance article for more info.

You can start a resume writing business for as low as $50. Most would-be writers start small by working from home with a computer, a phone, and a website to get their business out there. Other additional costs include a small business license which can vary depending on the location and size of your business.

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

The ongoing expenses of running a resume writing business include marketing, networking, office supplies, office equipment maintenance, utilities, and general business overhead costs.

Learn more about running a resume writing business.

Resume writing businesses make money by charging a fee for a wide range of writing services related to the job search process. Some also offer career coaching and practice interview services.

Learn more about starting a resume writing business.

Resume writers help candidates present themselves in a way that positively highlights their skills and experiences. Resume writing businesses offer a full range of writing services from resumes, cover letters, thank-you letters, and networking letters.

Resume writing businesses with multiple writers are reporting annual revenues as high as $250,000, if not more.

Learn more about starting a resume writing business.

Related Articles

Article Sources

IRS: Limited Liability Company

IRS: S Corporations


SBA: Small Business Guide

SBA: Choose a Business Structure Guide

US Census Bureau: Small Business Statistics

SBA Office of Advocacy: Data on Small Business

FRED: SBA Data for Small Business