Should I Start an LLC for My Roller Skating Rink?

Starting a limited liability company (LLC) for your roller skating rink 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 roller skating rink, lawsuits can arise from things like injuries that occur on the rink due to the negligence of a supervisor or claims that your marketing material defames a rival rink.

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

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

Do I Need an LLC for a Roller Skating Rink?

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 Roller Skating Rink

By starting an LLC for your roller skating rink, 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.

Roller skating rinks will benefit from liability protection because of the risk of product liability, workplace accidents, and trademark infringement.

Example 1: A child is injured by other patrons while leaving your roller skating rink one evening. Her parents sue you, claiming poor lighting in entry/exit areas and lack of proper security. In the ensuing lawsuit, you would be protected from being held personally liable to pay any damages.

Example 2: A customer comes into your roller skating rink for the first time. Despite you requiring all newcomers to take a basic safety course before skating, he steps onto the rink unnoticed, falls, and breaks his arm. If he decides to file a lawsuit, you would be protected from being held personally liable to pay any damages.

Example 3: You release a new batch of publicity materials for your gym. A rival company sues you, claiming that you tarnished the image of their business. As long as your business operates as an LLC, your personal assets will remain protected from being used to pay for any damages or legal fees associated with the lawsuit, even if the business is found to be 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 Roller Skating Rink

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 roller skating rink 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

Roller skating rinks 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.

Roller skating rinks certainly should obtain insurance because of the hazards of the business. If any customers get injured while using your rink, insurance can help cover the medical costs and any potential lawsuits.

Common Situations Business Insurance May Cover for a Roller Skating Rink

Example 1: A customer’s rented skate brakes while skating, causing a fall that results in substantial injuries. Even if your rink isn’t held liable because the customer assumed the risk of falling when they stepped into the rink, the resulting legal fees alone could be expensive. General liability insurance would likely cover the legal fees and any settlement.

Example 2: While walking through a dimly lit area of the rink in skates, a customer trips and is injured. Again, general liability insurance would probably cover the injuries.

Example 3: Employees neglect to tell a customer that strobe lights are used during a Saturday-night skating party. The customer has epilepsy, and the strobe lights cause a seizure. General liability insurance would likely cover any settlements or compensation due to the injured person if the business is sued.

Other Types of Coverage Roller Skating Rinks 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 roller skating rinks should obtain:

Commercial Property Insurance

Roller skating businesses that own the building they’re in normally need property insurance for the structure. Policies usually also cover build-outs and equipment stored in the building.

If your skating rink’s structure is built using an especially affordable technique (e.g., as a steel building), property insurance might be more affordable as well. Regardless of the cost for your particular building, your business’s largest asset isn’t one that should be left uncovered.

Property insurance is widely available through business owner’s policies (BOPs).

Workers’ Compensation Insurance

Assuming your roller skating business has employees, it will need workers’ compensation insurance. Most states require businesses that have employees to carry this coverage, which pays for medical care and lost wages resulting from work-related injuries and illnesses.

Working in the roller skating business can be hazardous for even experienced skaters. Rogue customers can run into employees who are actively monitoring the rink, and anyone could trip over stray equipment on the floor. You’ll need to make sure all employees are covered from the first day they begin working.

Business Interruption Insurance

When a disaster strikes, it sometimes takes businesses weeks or months to recover and reopen. If your roller skating rink wouldn’t be able to pay its bills without revenue coming in, business interruption insurance may be an appropriate coverage. This insurance provides supplemental payments to compensate for revenue losses after a covered incident.

Liquor Liability Insurance

If your roller skating rink has a bar, getting liquor liability insurance is probably both wise and necessary. Liquor liability can cover a range of alcohol-induced incidents, from falls to fights, and many states require businesses to have a policy in place before they can obtain a liquor license.

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 a Roller Skating Rink article for more info.

The startup costs for a roller skating rink can total about $30,000. The cost of leasing a workspace and hiring an engineer to redesign this space to ensure proper safety takes up a portion of this. Other associated costs include equipment, software, insurance, website, and marketing supplies.

Visit our How to Start a Roller Skating Rink guide to learn more about the costs of starting and maintaining this business.

Some of the main operating expenses for a roller skating rink are rent, insurance, payroll, and utilities.

Learn more about running a roller skating rink.

A roller skating rink makes money by charging customers to roller skate and by renting skates. They also often sell concessions, have other entertainment options like video games, and rent out the facility for other events.

Learn more about starting a roller skating rink.

Opening a roller skating rink isn’t cheap. There are significant startup costs to open and run such a large space, but if you add additional revenue streams like concessions and other events, this could be a profitable business.

The potential profitability of a roller skating rink largely depends on its location and on its ability to monetize the large space. The increasing interest in roller skating could mean a steady stream of customers.

Learn more about starting a roller skating rink.