Should I Start an LLC for My Air Duct Cleaning Business?

Starting a limited liability company (LLC) for your air duct cleaning 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 an air duct cleaning business, lawsuits can arise from things like injuries as a result of inhaling contaminated dust, or an employee accidentally damaging your client’s home while working.

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

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

Do I Need an LLC for an Air Duct Cleaning 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 an Air Duct Cleaning Business

By starting an LLC for your air duct cleaning 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.

Air duct cleaning businesses will benefit from liability protection because of the risk of personal injuries, property damage, and even defamation of other companies.

Example 1: After carrying out a cleaning in a client’s domestic home, the client alleges that one of your employees stole a valuable belonging, which is now missing. The client seeks compensation in a small claims court by suing your LLC. Since you benefit from limited liability, the client may be compensated from your business’s assets, but not from your own.

Example 2: Your employee inhales dust while cleaning an air duct in a client’s office without a dust mask, which leads to a serious respiratory infection. Since they did not wear a mask (as mandated by company policy), you refuse to cover their medical bills. If they decide to bring a legal case against your LLC, limited liability will protect your personal assets from being put at financial risk.

Example 3: One of your self-employed contractors tells you that he has been operating in a scope that is identical to an employee, and as such believes that you have misclassified his employment status to avoid paying employee-related benefits. After bringing a lawsuit against your LLC, you realize that your limited liability will prevent you from having to personally compensate the other side, regardless of how the case goes in court.

Example: 4 While cleaning a customer’s air ducts, one of your employees accidentally causes damage to the ducts, requiring significant repairs. The customer sues you for the damages.

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 an Air Duct Cleaning 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 an air duct cleaning 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

Air duct cleaning 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?

Yes, all LLCs need business insurance in order to safeguard their assets against foreseeable financial harm.

Having said that, the nature of your business and industry can significantly affect how important business insurance is, as this will depend on your overall risk.

Common Situations Business Insurance May Cover for an Air Duct Cleaning Business

Example 1: When one of your salespeople makes inaccurate and unfavorable comments about a competitor, the company files a defamation lawsuit. General liability insurance would cover your legal fees and any damages awarded in a settlement.

Example 2: A customer injures their head after tripping over your equipment and falling down the stairs at a job site. General liability insurance would cover the customer’s medical bills.

Example 3: As a vendor drops off supplies, he accidentally knocks a large stack of HVAC supplies onto his head and needs immediate medical care. General liability insurance would cover the vendor’s medical bills and your legal fees in the event of a lawsuit.

Other Types Of Coverage Air Duct Cleaning 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 air duct cleaning companies should obtain:

Commercial Auto Insurance

Any truck or van you use primarily for business requires commercial auto insurance to protect the vehicle, driver and others on the road in the event of an accident. Be sure to select a policy that covers not only accident-related vehicle repair costs and medical treatment for anyone injured, but also sufficient protection for any special equipment you carry to job sites in your vehicles.

Professional Liability Insurance

If a customer decides your services caused them injury and files a lawsuit, professional liability insurance would cover your legal fees as well as any damages awarded in a settlement.

Commercial Property Insurance

If you own the building in which you operate, you’re responsible for all business-related property housed there in the event of a fire, burglary, or natural disaster. Commercial property insurance would cover the cost of replacing your equipment and supplies after an accident so you can recover quickly.

Home-Based Business Insurance

If you operate out of a home office or garage, check with your homeowners insurance provider to ensure your policy protects you against liability from business-related accidents. If not, consider adding home-based business coverage to your business owner policy (BOP) or your existing home insurance policy.

Commercial Umbrella Insurance

While your general liability insurance policy covers most claims, some accidents or lawsuits may be so catastrophic that they threaten to exhaust the limits of your primary coverage. Commercial umbrella insurance protects you from paying out-of-pocket for any legal fees and awarded damages that exceed your primary policy.

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, commercial auto insurance, and commercial property insurance.

Read our Air Duct Cleaning Business Insurance article for more info.

How much it will cost to start an air duct cleaning business will depend on whether it is residential (around $5,600), or commercial (around $10,000).

Most of your ongoing costs will go towards re-stocking the equipment needed to clean air ducts (e.g., air compressor, cleaning tools, personal safety equipment, etc.).

If you do not already have one, you will also need to purchase or lease a large vehicle, which will increase your total startup cost significantly.

Visit our How to Start an Air Duct Cleaning Business guide to learn more about the costs of starting and maintaining this business.

An air duct cleaning business must pay for fuel to get to and from customers’ buildings. It also must maintain a trailer or truck, and purchase supplies and equipment.

Learn more about running an air duct cleaning business.

An air duct cleaning business charges customers to clean their air ducts, typically for a flat rate.

Learn more about starting an air duct cleaning business.

An air duct cleaning business performs cleaning and occasionally maintenance on customers’ HVAC air ducts. This is done for both residential and commercial customers.

The amount of profit an air duct cleaning business can make depends on how many cleanings it does and what it charges per cleaning, along with its overhead costs.

Learn more about starting an air duct cleaning business.