Last Updated: May 13, 2024, 8:46 am by TRUiC Team

Should I Start an LLC for My Voice-Over Service?

Starting a limited liability company (LLC) for your voice-over service 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 voice-over service business, lawsuits can arise from things like copyright disputes, confidential information leaks, and data breaches. 

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

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

A voice actor in front of a microphone

Do I Need an LLC for a Voice-Over Service?

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 Voice-Over Service

By starting an LLC for your voice-over service, 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.

Voice-over services will benefit from liability protection because of the risk of premises liability, personal injury, property damage, and breach of contract. 

Example 1: When your secretary accidentally forwards a response to the wrong email, they leak a client’s confidential script. Even though you immediately fire your secretary, a lawsuit is brought against your LLC. Regardless of the validity of the lawsuit, your limited liability protection will shield your personal assets from the claimant.

Example 2: One of your employees agrees to do a voice-over for a client’s book. Unbeknown to the employee, the rights of that book have been purchased by another party, meaning that they are infringing on a competitor’s copyrighted work. If a lawsuit was to be filed against your LLC, you would not be responsible for personally compensating the claiming party since you didn’t personally act negligently.

Example 3: After a steady financial year, you decide to apply for a small business loan in order to rent out a larger office and upgrade your studio equipment. As an LLC owner, you will not be personally liable for paying the lending party back, even if your business is unable to. Of course, this would not be the case if you personally guaranteed the loan during its application.

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 Voice-Over Service

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 voice-over service 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

Voice-over services 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 the limited liability protection from an LLC protects your personal assets, not your business assets.

As a voice-over service owner, business insurance can protect your business’s assets (e.g., studio equipment, office, etc.) from trademark or copyright infringements, classified information leaks, and property damage.

Business insurance can also protect your personal assets against tort or negligence claims (e.g., slander, etc.), since these are not covered by an LLC structure’s limited liability protection. 

Common Situations Business Insurance May Cover for a Voice-Over Service

Example 1: You record a voice-over session for one movie but release the wrong soundtrack to a different film. Your client is unable to meet their deadline and sues for breach of contract. General liability insurance would cover the costs associated with the lawsuit.

Example 2: Your employee damages one of your client’s vehicles when they’re trying to maneuver a bulky package to the door. General liability insurance would pay for the costs to fix your client’s car.

Other Types of Coverage Voice-Over Services 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 voice-over services should obtain:

Commercial Property Insurance

If you own your own studio, you’ll need commercial property insurance to cover the equipment and the structure. Every policy will differ based on your state and business needs, but most commercial property insurance covers damage from events like fire, criminal activity, and extreme weather.

Professional Liability Insurance

If your business advises clients on how to structure their voice-over content, then professional liability insurance is available in case an employee omits a crucial piece of information. For example, if you give a disclosure statement at the end of a commercial and the client leaves out an important detail based on your advice, this insurance would cover any legal costs associated with the fallout. 

Workers’ Compensation Insurance

This insurance needs to be made available to all employees, regardless of whether they work from home or in the studio. Workers’ compensation insurance provides financial compensation in the event a worker is injured while on the job.

Commercial Umbrella Liability Insurance

Umbrella insurance covers a voice-over service if its general liability policy reaches its maximum limits. A single lawsuit can quickly exceed the financial threshold of a general liability policy, but umbrella insurance can help cover additional expenses to keep your business afloat.

Home-Based Business Insurance

If you operate your voice-over services from home, home-based business insurance covers your equipment as well as the space used for your business. A general homeowner’s policy may not cover commercial expenses, such as recording tools and administrative equipment.

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 Voice-Over Service Insurance article for more info.

You should be able to start a voice-over service with a relatively small budget, especially if you do so via a home studio — which can be created for $5,000 or less. You will also want to allocate a few thousand dollars for advertising, purchasing a business website, and getting a business license. 

Visit our How to Start a Voice-Over Service guide to learn more about the costs of starting and maintaining this business.

The ongoing expenses of running a voice-over service include coaching, equipment, marketing, and insurance.

Learn more about running a voice-over service.

Voice-over services make money from fees for recording voice-over materials for their clients.

Learn more about starting a voice-over service.

Voice-over services can be very lucrative. Some voice-over actors earn over six figures in annual revenue. 

Projects in the entertainment industry account for more than half of the voice-over market. With the expanding digital market, growth is expected in this industry. One report puts the value of the global voice-over market at $4 billion.

Learn more about starting a voice-over service.

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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