Do I Need an LLC for My Football Bowling Business?
Starting a limited liability company (LLC) for your football bowling 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 football bowling business, lawsuits can arise from things like vendor disputes (e.g., over refund-related demands, etc), breach of contract claims, and accruing debt that cannot be paid back.
LLCs are also affordable, highly flexible (from a tax point-of-view), and can make your football bowling business seem more credible.
Recommended: Use Northwest to form an LLC for $29 (plus state fees).
Should I Start an LLC for My Football Bowling Business?
LLCs are a simple and inexpensive way to protect your personal assets and save money on taxes.
You should start 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 Football Bowling Business
By starting an LLC for your football bowling 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.
Football bowling businesses will benefit from liability protection because of the risk of being sued for personal injuries, property damage, trademark infringement, and more.
Example 1: You order pins embossed with your logo for your football bowling business. The vendor botches the design, so you refuse delivery. The vendor sues to recover his price. Even if you lose the case, your personal assets will be shielded from the judgment.
Example 2: You receive two acceptances that arrive at the same time for the used equipment you offered for sale, one is by email, and the other is by mail. You read the email before opening the letter containing the other offer, and so accept the email offer. The other party claims a contract was formed when he posted the letter, and sues. Despite an adverse outcome, your personal assets are protected.
Example 3: Traffic to your football bowling business slows considerably because of major construction work on the main access road and you decide to shut up shop. However, business assets are not enough to pay off all creditors. Unfortunately, some creditors will go unpaid. Your personal assets are shielded from them because as a member of an LLC, you enjoy 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 Football Bowling 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 football bowling 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
Football bowling 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 dependable 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.
A football bowling business will find liability insurance useful, particularly since it offers protection against damage to property. General liability insurance also covers compensation awarded by a court to someone who is injured on your premises, as well as legal fees to contest the action in court.
Common Situations Business Insurance May Cover for a Football Bowling Business
Example 1: A customer trips over a pin carelessly left lying in the corridor by an employee of your football bowling business. She falls, injuring her shoulder. General liability insurance would reimburse her for medical expenses related to her treatment.
Example 2: Workers transporting equipment for your football bowling business damage a customer’s car, causing extensive damage. General liability insurance would cover such an eventuality, paying compensation to the owner of the damaged vehicle for repairs, and possibility for loss of use of the car.
Example 3: A customer hurls a pin carelessly and hits a child in your football bowling business. The parents of the child sue your LLC, claiming it had a duty to protect the child from such harm. If their claim succeeds, your general liability policy would cover the costs of compensation.
Other Types of Coverage Football Bowling 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 football bowling businesses should obtain.
Commercial Auto Insurance
Since you will be driving your business truck on public roadways, you are mandated by the state to carry a commercial auto policy. Auto insurance protects not only your vehicle but any liability you may have in an accident. Your personal car insurance will not cover you if you are driving the company truck, even if you are off duty.
Commercial Property Insurance
You also need commercial property insurance to protect the building housing your football bowling business. Property insurance also covers equipment and other items owned by your business.
Football bowling businesses invest heavily in the equipment that is used to provide their service. Be sure that you have enough coverage to replace all your equipment in the case of a loss.
This coverage is generally offered in a Business Owner Policy (BOP).
In addition to the policies outlined above, there are a few other types of coverage your football bowling business may require depending on certain aspects of your operations. Some of these might not apply to you, so be sure to ask your agent which policies are right for your business.
Workers' Compensation Insurance
If your football bowling business has any employees (full-time or part-time), you are legally required to carry workers’ compensation insurance. This type of coverage will help compensate your employees in the case that they get injured on the job.
Read more about workers’ compensation insurance.
Business Interruption Insurance
In the event of a fire, flood, or other catastrophes, there is a good chance your business operations will be halted for some time. Business interruption coverage is designed to help you recoup a portion of the revenue your business would lose due to the inability to operate.
This type of insurance is typically included in a business owner’s policy.
Commercial Umbrella Insurance
Umbrella coverage allows you to extend above and beyond the standard limits of your other business insurance policies. If you are faced with a large lawsuit or other claim situation, there’s a possibility that the coverage limits of your standard policies will be insufficient. In this case, your umbrella policy will allow you to surpass these limits.
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 Small Business Insurance article for more info.
The chief startup cost of a football bowling business is the purchase or lease of premises, a cost that can vary considerably depending on size and location. A conservative estimate puts startup capital required at $250,000. Major running costs are rent, salaries, power, and commercial insurance.
Visit our How to Start a Football Bowling Business guide to learn more about the costs of starting and maintaining this business.
Rent, insurance, payroll, and utilities are the primary ongoing expenses.
Learn more about running a football bowling business.
This type of business charges customers to play football bowling, either by the hour or on a per-game basis.
Learn more about starting a football bowling business.
Football bowling combines certain aspects of both football and bowling. A football bowling business allows people to engage in football bowling by providing the necessary equipment and space.
Profits depend on customer volume and location.
Learn more about starting a football bowling business.