Last Updated: June 6, 2024, 12:42 pm by TRUiC Team


Do I Need an LLC for My Wedding Planning Business?

Starting a limited liability company (LLC) for your wedding planning 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 wedding planning business, lawsuits can arise from things like professional negligence (e.g. if the wedding is supplied with an insufficient number of seats for guests) and personal injury (e.g. if contaminated food was served that caused the guests to get sick).

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

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

A couple kissing at their wedding

Should I Start an LLC for a Wedding Planning 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 Wedding Planning Business

By starting an LLC for your wedding planning 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.

Wedding planning businesses will benefit from liability protection because of the risk of contract breaches, bodily injury, property damage, and other mistakes that can affect the outcome of the wedding. 

Example 1: A couple hires your wedding planning business. On the day of the wedding, everything looks poorly managed, and the couple is forced to take on several of the responsibilities that your business agreed to oversee. After the wedding, the couples ask for a partial refund due to the “poor performance of your employees.” When you refuse, they threaten to file a lawsuit against your LLC. Here, your business’s assets may be used to compensate the claimants (depending on how the claim progresses), but your personal assets will not be.  

Example 2: A couple tells you that they are expecting 150 wedding guests. On the day of the wedding, they find out that there is an insufficient number of seats. Your employee has also ordered too many meals, which your client has been charged for. As a result, the couple files a compensation lawsuit against your LLC in order to get reimbursed. As an LLC owner, your business may be required to compensate the claimants, but your personal assets will remain 100% protected. 

Example 3: A lady visits your office to discuss her wedding plans. While your receptionist serves her coffee, he accidentally spills a coffee mug on her, causing several mild burn wounds. A few weeks later, the lady files a lawsuit against your LLC in order to seek damages, as well as get her medical bills covered. As a result of your business’s LLC classification, your personal assets will remain protected from the claimant, even if your business is unable to compensate them. 

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 Wedding Planning 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 wedding planning 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

Wedding planning 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 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.

Step 2: Name Your LLC

When you file your LLC's formation documents, you'll need to give your wedding planning business a unique name. 

Need help naming your business? Use our free Business Name Generator and our How to Name a Business guide to get started.

Once you find a business name, check if your name is available as a web domain with GoDaddy.

Find a Domain Now

Once you've secured your domain name, take the next steps. Learn how to create a website and then create a logo using our free logo maker.

 

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 wedding planning business owner, getting insurance can protect your business’s assets (e.g., computer, office furniture, etc.) from a variety of different lawsuits, including those that relate to:

  • Copyright infringement allegations
  • Breach of contract disputes
  • Employee and/or customer injuries

Common Situations Business Insurance May Cover for a Wedding Planning Business

Example 1: You run a wedding planning business from home and invite a client to come over for a consultation. The client trips down your basement stairs, breaking her arm on the hard wooden steps in the process. If found liable, general liability insurance could assist in covering court-mandated damage payments or any settlements.

Example 2: During her ceremony, a bride trips on the carpet you selected and had professionally installed in the center of the aisle. Her ankle breaks, and she has a panic attack in the middle of the aisle. If found liable for the incident, general liability insurance would likely assist in covering some of the damages, both physical and psychological, as ordered by the court. Any settlement reached would probably be similarly covered.

Example 3: Your scheduled caterers provide spoiled food to wedding guests, resulting in some serious food poisoning among many people. If found liable for damages, general liability insurance would probably help to cover anything your business ultimately owed.

Other Types of Coverage Wedding Planning 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 wedding planners should obtain:

Professional Liability Insurance

This policy is for businesses that thrive on, among other things, professional advice or carefully rendered services of great import. Wedding planners make a living out of crafting important events and providing professional advice. If something goes wrong and your services end up compromising the value of the wedding, your business could find itself in hot water. Keep your planning business covered with professional liability insurance, which is designed to handle damages owed from professional negligence or the failure to provide promised services.

Commercial Property Insurance

If your wedding planning business wants to succeed, you will undoubtedly operate from a location containing various supplies, computers, and more. Losing these assets to disasters like fire or violent weather can be crippling to a business. Commercial property insurance keeps you covered for incidents just like these, protecting business-related property that you own as well as any affected owned real estate.

Commercial Umbrella Insurance

Commercial umbrella insurance represents a special policy that is taken in tandem with other policies. When your coverage for certain assets is maximized, but you would like to extend that coverage even further, consider a policy like this one. Given the huge number of variables involved in executing a wedding, planning businesses may encounter scenarios that are particularly unpredictable. Umbrella policies go above and beyond normal coverage to protect your business from these risks.

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, professional liability insurance, and possibly commercial auto insurance.

Read our Business Insurance article for more info.

To start, you will need to lease or purchase an office, as well as get a business website. You will also need to establish a social media presence on sites such as Facebook and other social media platforms in order to advertise your services online. We recommend allocating a monthly advertising budget that’s between $1,000 and $5,000.

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

The ongoing expenses of running a wedding planning business include utilities, marketing, advertising, fees to attend bridal shows, and insurance.

Learn more about running a wedding planning business.

Wedding planning businesses make money from fees for their services. There are various fee options from charging an hourly rate, to charging a percentage of the total wedding budget, to charging a flat fee.

Learn more about starting a wedding planning business.

Planning a wedding can be very stressful. Many people hire wedding planners to help them plan, organize, and manage their weddings.

The average profit margin for a wedding planning business needs to be at least 15% to be sustainable, but profit margins can be as high as 40%. 

Learn more about starting a wedding planning business.

Related Articles

Article Sources

IRS: Limited Liability Company

IRS: S Corporations

IRS: EIN

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