Should I Start an LLC for My Skateboarding Lessons Business?

Starting a limited liability company (LLC) for your skateboarding lessons 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 skateboarding lessons business, lawsuits can arise from things like student injury as a result of not being provided with adequate safety equipment or instruction.

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

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

A person receiving skateboarding lessons

Do I Need an LLC for a Skateboarding Lessons 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 Skateboarding Lessons Business

By starting an LLC for your skateboarding lessons 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.

Skateboarding lessons businesses will benefit from liability protection because of the relatively high risk of personal injury.

Example 1: You take out a loan to expand your skateboarding business. Unfortunately, the new equipment and your new marketing campaign fail to bring in more students and you default on the loan. Because your business is an LLC, the bank could be prevent from using your personal assets to satisfy the debt.

Example 2: A parent brings her son for skateboard lessons. She is happy to sit and watch him practice in the open field. As she turns to find a seat, she trips over your personal skateboard and falls. She decides to sue for an injury sustained, lost wages, and pain and suffering. LLC will protect you as the owner, and only your business may be affected.

Example 3: You take your students on a skateboarding practice. As they skate, one student bumps into another, and they both fall and sustain an injury. Their parents accuse you of poor coordination and decide to sue for compensation. If they sue, your business may pay compensation, but you will personally not be affected.

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 Skateboarding Lessons 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 skateboarding lessons 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

Skateboarding lessons 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.

Skateboarding lessons businesses need insurance to cover skateboard theft, equipment damage, client injury, lawsuits, and situations that could result in bankruptcy.

Common Situations Business Insurance May Cover for a Skateboarding Lessons Business

Example 1: While teaching a lesson, you stumble and knock over the parent of your student. She breaks her arm in the fall and sues your business. Your general liability insurance policy will pay for your legal defense costs. It will pay for your attorney and for a settlement if necessary.

Example 2: A competing business has sued your company for libel. You know you need a lawyer to defend your interests. Your general liability insurance policy will pay for your lawyer if someone sues you for libel.

Example 3: Your employee steps on the bag of a client and breaks the expensive camera equipment inside. The general liability insurance policy you have will cover damage to customer property. You can file a claim and get help replacing the equipment.

Other Types of Coverage Skateboarding Lessons 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 skateboarding lessons businesses should obtain:

Professional Liability Insurance

You do your best to teach your students well. But, even with your hard work, there is always a chance you'll make mistakes and face lawsuits for them. Professional liability insurance will pay your legal defense costs in such circumstances. It will cover the cost of your attorney and a settlement if necessary.

Commercial Property Insurance

The various skateboarding equipment, supplies, computers, software, furnishings, and other items you invested in to establish your business were costly. It would be difficult to replace them if they get lost in an unexpected event like a fire. Commercial property insurance can help with those replacements. You can file a claim and get money to help you get new property lost in a covered event.

Workers’ Compensation Insurance

If you have hired employees to help with your skateboarding instruction business, chances are state law requires you to have workers’ compensation insurance. A policy will pay for your employees to get medical treatment if they get injured doing their jobs. It will also help cover their lost wages while they are away from work.

Commercial Umbrella Insurance

A commercial umbrella policy picks up where a general liability insurance policy leaves off. It will start paying when you exceed the limits of your general liability insurance policy—which can happen if you lose a big lawsuit.

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 Skateboarding Lessons Business Insurance article for more info.

Starting this business can cost as low as $2500 if you already have your personal skateboards and your area has a public skate park. You will need this money to create a professional website that costs $500, while the remaining $2000 will be spent on advertising.

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

The ongoing expenses of running a skateboarding lessons business include skateboard equipment maintenance, marketing, and insurance.

Learn more about running a skateboarding lessons business.

Skateboarding lessons businesses make money by charging a fee for private lessons or group events.

Learn more about starting a skateboarding lessons business.

With minimal overhead costs required, a skateboarding lessons business can be very profitable. With skateboarding making its Olympic debut in 2024, interest in the sport will likely increase. Skateboarding lessons businesses can target customers for private lessons, children’s birthday parties, or afterschool programs.

Learn more about starting a skateboarding lessons business.