Do I Need an LLC for My Window Tinting Business?
Starting a limited liability company (LLC) for your window tinting 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 window tinting business, lawsuits can arise from things like personal injuries (such as chemical burns from touching the tinting solution), negligence for poorly applied tinting film, or defamation for negative comments about rival businesses.
LLCs are also affordable, highly flexible (from a tax point-of-view), and can make your window tinting business seem more credible.
Recommended: Use Northwest to form an LLC for $29 (plus state fees).
Should I Start an LLC for a Window Tinting 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 Window Tinting Business
By starting an LLC for your window tinting 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.
Window tinting businesses will benefit from liability protection because of the risk of being sued for personal injuries or damage to someone else’s property. You could also be sued for things like libel and trademark infringement.
Example 1: Your window tinting business failed to apply tinting film appropriately, which caused it to later start bubbling and peeling. Seeking compensation for these damages, your customer files a negligence lawsuit against your business. Here, limited liability will prevent you from being held personally responsible for compensating the claimant.
Example 2: After your window tinting business became the subject of a devastating hack, the personal information and addresses of numerous important clients were made publicly available. As a result, one of the affected clients filed a data breach lawsuit against your LLC. In this example, any liability to pay the plaintiff damages will be carried exclusively by your business.
Example 3: One of your employees failed to warn a customer to be careful around a newly tinted window, causing him to suffer serious chemical burns after touching the tinting solution. This prompted the customer to bring a lawsuit against your business for this personal injury. In this lawsuit, any damages that may be awarded by the court will not extend to your personal assets as a result of your limited liability.
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 Window Tinting 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 window tinting 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
Window tinting 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).
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
- Alabama LLC
- Alaska LLC
- Arizona LLC
- Arkansas LLC
- California LLC
- Colorado LLC
- Connecticut LLC
- Delaware LLC
- Florida LLC
- Georgia LLC
- Hawaii LLC
- Idaho LLC
- Illinois LLC
- Indiana LLC
- Iowa LLC
- Kansas LLC
- Kentucky LLC
- Louisiana LLC
- Maine LLC
- Maryland LLC
- Massachusetts LLC
- Michigan LLC
- Minnesota LLC
- Mississippi LLC
- Missouri LLC
- Montana LLC
- Nebraska LLC
- Nevada LLC
- New Hampshire LLC
- New Jersey LLC
- New Mexico LLC
- New York LLC
- North Carolina LLC
- North Dakota LLC
- Ohio LLC
- Oklahoma LLC
- Oregon LLC
- Pennsylvania LLC
- Rhode Island LLC
- South Carolina LLC
- South Dakota LLC
- Tennessee LLC
- Texas LLC
- Utah LLC
- Vermont LLC
- Virginia LLC
- Washington LLC
- Washington D.C. LLC
- West Virginia LLC
- Wisconsin LLC
- Wyoming LLC
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.
If you are the owner of a window tinting business, insurance is generally a necessity. Not just because it provides your business with financial stability due to its protection from various risks, but because it also permits it to remain compliant with your state’s local regulations.
Common Situations Business Insurance May Cover for a Window Tinting Business
Example 1: While moving a customer’s vehicle from the service bay to the parking lot, one of your technicians causes damage to a parked vehicle. General liability insurance should cover the damage to the parked vehicle. The customer’s vehicle would be covered under a different insurance policy.
Example 2: One of your social media posts mentions how many customers of XYZ Tinting have started using your services after their tinting from XYZ started peeling. XYZ Tinting is suing your business for compensatory damages, claiming they lost customers as a result of your ad. This advertising injury claim would be covered under your general liability policy.
Example 3: A customer is brought into the workshop so they can see an issue the technician has run into. While walking through, the technician drops a tool on the customer’s foot. General liability insurance would likely cover the cost of treating their injuries.
Other Types of Coverage Window Tinting 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 tow truck companies should obtain.
Commercial Property Insurance
If you own the building you run your window tinting business out of, you should consider purchasing commercial property insurance. This would cover the brick-and-mortar structure as well as the business property kept on site.
When considering your coverage amount, it’s important to include any build-outs done to the building and any specialized tools purchased for the business. You should purchase enough coverage to replace all equipment/tools and to rebuild the building in the event of a loss.
This coverage is frequently available as part of a business owner’s policy (BOP).
Workers’ Compensation Insurance
If your window tinting business has employees, the business is likely required by state law to carry workers’ compensation insurance. Workers’ compensation insurance typically covers injuries that employees suffer while on the job.
Workers' compensation is generally purchased as a standalone policy.
Business Interruption Insurance
If you depend upon the business’s revenue to support your household, consider purchasing business interruption insurance. If a major event occurs that forces the business to shut down for an extended period of time, this coverage will help make up some of the lost revenue.
Business interruption insurance is typically available as part of a business owner's policy (BOP).
Commercial Umbrella Liability Insurance
Working around and on automobiles puts you at greater risk than other types of businesses, with liability expenses often exceeding the limits of primary policies. Commercial umbrella liability insurance adds an extra layer of liability coverage, protecting you against sizable covered lawsuits.
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, workers’ compensation insurance, and commercial property insurance.
Read our Window Tinting Business Insurance article for more info.
It is recommended that owners of window tinting businesses acquire around $4000 in initial capital before starting their business. If you decide to follow a franchising route, however, this cost can easily rise to over $100,000.
Regardless, there are a number of essential costs that you will need to bear in mind in order to get started, including purchasing a window tinting course, a box of tint, and a business vehicle.
Visit our How to Start a Window Tinting Business guide to learn more about the costs of starting and maintaining this business.
The ongoing expenses for a window tinting business are fairly reasonable and often include:
- Fuel and maintenance costs for a vehicle (for mobile businesses)
- Lease payments and utilities (for businesses with a fixed location)
- Tinting supplies
- Payroll
Learn more about running a window tinting business.
A window tinting business makes money by charging customers to tint their vehicle’s windows. Customers often can choose from different levels of tinting, depending on their needs and budget.
Learn more about starting a window tinting business.
The profits of a window tinting business will depend on how many customers it serves per day and what it charges per customer. Offering to tint other types of windows, such as those on buildings, can increase profits. Some businesses will also provide an at-home service, which is an added convenience for customers.
Learn more about starting a window tinting business.
