Do I Need an LLC for My Technical Writing Business?

Starting a limited liability company (LLC) for your technical 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 technical writing business, lawsuits can arise from things like using incorrect information in a client’s white paper, using a copyrighted photo on your website, and a breach of a customer’s sensitive information after a hack.

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

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

Should I Start an LLC for My Technical Writing Business?

LLCs are a simple and inexpensive way to protect your personal assets and save money on taxes.

You should form 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 Technical Writing Business

By starting an LLC for your technical 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.

Technical writing businesses will benefit from liability protection because of the risk of being sued for negligence, and data breaches.

Example 1: Your company is hired to create a white paper for an upcoming tech conference. During the process, a negligent employee uses incorrect information in the white paper and your company is sued. Should the court find the business guilty, only the business’s assets will be used in providing compensation.

Example 2: While attending to some clients in your office, one of them trips over a wire and breaks their ankle. If they decide to file a lawsuit against your LLC, limited liability will ensure that your personal assets remain protected regardless of how the claim progresses.

Example 3: Your company's database is hacked, and sensitive client information is stolen. Following this, several lawsuits are filed against you. If found liable, only the business assets will be used to provide compensation for any damage awarded by the court.

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 Technical 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 technical 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

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

Technical writing businesses need insurance to protect their assets, employees, and clients in case of an unforeseen event. Coverage can include property damage, injury liability, and personal protection for business owners.

Common Situations Business Insurance May Cover for a Technical Writing Business

Example 1: A client slips and falls on ice in your parking lot and is rushed to the hospital. He is suing your business for $76,000 to cover medical bills and other related damages. General liability insurance would pay for your legal representation in court, as well as any damages awarded.

Example 2: Your client has asked for help with a technical issue. While their laptop is in your possession, you drop it, damaging it beyond repair. Your general liability policy would help cover the cost to repair the $3,800 laptop.

Example 3: Your new website features a photo that is protected under copyright law. If named in a copyright infringement lawsuit, your general liability insurance would help cover related attorney’s fees and/or a court-ordered judgment.

Other Types of Coverage Technical 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.

Professional Liability Insurance

Lawsuits stemming from your work, including failure to deliver promised services, oversights and mistakes, and professional negligence, are specifically excluded without a professional liability insurance policy. Also known as Errors and Omissions (E & O) insurance, this policy helps reduce the potential for coverage gaps, covering resulting legal costs and court-awarded damages.

Home-Based business insurance

Business property and business-related losses are specifically excluded on most standard homeowners insurance policies. To ensure proper coverage, a home-based business insurance policy may be necessary to protect your property in the case of damage or loss to commercial property in a covered event.

Commercial Property Insurance

If you choose to work outside the home, a commercial property policy may be a necessary part of your insurance portfolio. This policy covers the cost to repair and/or replace damaged property, including owned real estate and business-owned property, should a covered loss occur on your business premises.

Data Breach Insurance (aka Cyber Attack insurance)

Your profession requires you to work with technology regularly. Unfortunately, this can make you a target for online hackers, an loss that is specifically excluded on a general liability insurance policy. Data breach insurance helps fill that coverage gap, paying damages from a data breach that results in stolen user data.

Workers’ Compensation Insurance

Once your business has grown enough to hire a team, you will be required by the state to carry workers’ compensation insurance. This policy covers an employee if they are injured or fall ill while on the job. In addition to their medical bills, it can cover lost wages and legal representation for the business owner, if a lawsuit is filed.

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 professional liability insurance.

Read our Business Insurance article for more info.

Starting a technical writing business requires minimal investment as long as you dont need to register for any additional training. You can start this business from your home with a laptop and an internet connection. You’ll also need to set up a website for your business for about $200 a year.

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

Internet access, computer maintenance, utilities, website maintenance, and marketing are the primary ongoing expenses.

Learn more about running a technical writing business.

Technical writers charge clients per word or with a flat rate for a document.

Learn more about starting a technical writing business.

A technical writing business specializes in projects like instruction manuals, official documents, and how-to guides. Technical writers may write for a technical or lay audience, depending on the project.

A technical writer’s profits depend on their rates and total volume of work.

Learn more about starting a technical writing business.