Should I Start an LLC for My Self-Defense Training Business?

Starting a limited liability company (LLC) for your self-defense training 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 self-defense training business, lawsuits can arise from things like instructors using excessive force during lessons or misrepresentations surrounding the instructors’ level of expertise and the effectiveness of their techniques.

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

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

Four women in a self-defense training class

Do I Need an LLC for a Self-Defense Training 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 Self-Defense Training Business

By starting an LLC for your self-defense training 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.

Self-defense training businesses will benefit from liability protection because of the risk of personal injury and general business risks.

Example 1: A client sustains a severe injury while training in your facility. He blames your business for negligence and has sued you for damages. If you have liability protection, your private assets will not be in jeopardy in the event of a guilty verdict.

Example 2: You took out a loan to expand your self-defense training business. But, you could not repay the loan due to some business difficulties. If you have liability protection and did not personally guarantee the loan, your private assets will be protected from creditors.

Example 3: One of your workers files a lawsuit against you because he feels his recent firing was unjustified. If the court finds you guilty and orders you to compensate him, liability protection will limit the effects of the incident to only your business assets.

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 Self-Defense Training 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 self-defense training 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

Self-defense training 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.

Self-defense training businesses must have insurance in order to protect themselves against liability for personal injuries and property damage.

Common Situations Business Insurance May Cover for a Self-Defense Training Business

Example 1: One of your students slips and falls in the restroom on wet flooring. She breaks her arm and decides to sue your business. Your general liability insurance policy will pay for your legal fees, including the cost of hiring an attorney.

Example 2: Another self-defense training business in your town has sued your business for slander and libel. You do not believe their accusations are true, but you know you need a lawyer. The general liability insurance policy you have will cover your legal costs if someone accuses you of slander and libel.

Example 3: While walking into your studio from the parking lot, a student trips over broken pavement and breaks his wrist. He asks that you pay for his medical treatment. Your general liability insurance policy will likely cover the cost of his treatment if you file a claim.

Other Types of Coverage Self-Defense 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 self-defense training businesses should obtain:

Professional Liability Insurance

You strive to teach your students how to defend themselves in a confrontation. But no matter how good your teaching is, it is possible that you'll make mistakes that cause students to get injured and sue your business. Professional liability insurance will pay for your legal defense costs in such situations.

Commercial Property Insurance

You have invested a lot of money in the training equipment, supplies, and other items you use to run your self-defense training business. If you were to lose your property in an unexpected event like a fire, it would be costly to replace. However, if you have commercial property coverage, you can file a claim with your insurer to get help with replacements.

Workers’ Compensation Insurance

If you have employees at your training studio, chances are that state law requires you to have workers’ compensation coverage. If employees get hurt performing job-related duties, the policy will pay for their medical care. It will also help pay their lost wages while they are away from work.

Commercial Umbrella Insurance

An umbrella policy will provide the extra layer of protection you need in the event that you exceed the limits of your general liability insurance policy—which can happen if you lose a big lawsuit. It will start paying when the general liability insurance policy stops, so you can avoid needing to pay damages out of pocket.

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 article for more info.

The location where your classes will take place will significantly impact your overall startup costs. At first, many people who teach self-defense do it in private settings, such as their own homes, the homes of their trainees, or even public places like gyms and campuses. If you choose this path, you can launch your company with less than $2,000.

Visit our How to Start a Self-Defense Training Business guide to learn more about the costs of starting and maintaining this business.

The ongoing expenses of running a self-defense training business include marketing, insurance, and general overhead.

Learn more about running a self-defense training business.

Self-defense training businesses make money from fees for their training sessions.

Learn more about starting a self-defense training business.

Self-defense training businesses help people learn how to defend themselves. There are different areas of self-defense training, from martial arts to firearms training.

Self-defense training businesses can earn over $80,000 a year.

Learn more about starting a self-defense training business.