Should I Start an LLC for My Antique Store?

Starting a limited liability company (LLC) for your antique store 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 antique store, lawsuits can arise from things like a customer or employee getting injured within your store, selling inauthentic antiques, or accidently violating a competitor’s trademark.

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

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

brass items and figurines at an antique store

Do I Need an LLC for an Antique Store?

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 Antique Store

By starting an LLC for your antique store, 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.

Antique stores will benefit from liability protection because resale and retail businesses, including antique stores, face a variety of risks associated with customers visiting the physical store location and engaging with potential valuable and expensive antiques.

Example 1: Unbeknownst to you and your employees, an antique you have just sold to a customer is inauthentic. As a result, the customer suffered significant financial loss by greatly overpaying for the counterfeit. Hence, he sues your antique store for misrepresentation, believing he has been intentionally deceived. In this instance, limited liability would prevent any damages you might be liable for from being imposed on your personal assets.

Example 2: The logo you have designed for your antique store is extremely similar to that of a more successful competitor in the area. So much so that your competitor decides to sue on the grounds that your store had not acquired approval from them to use a critical aspect of their trademark. In the lawsuit that follows, your personal assets would be protected from any compensation you may be liable to pay.

Example 3: One of the short legs under a large wooden wardrobe in your store has a broken leg, but the team in your antique store has not yet put up a sign warning customers of this danger. Consequently, the wardrobe toppled over onto a customer when he inspected the antique. If the customer were to sue your business for the bodily harm he suffered, any compensation you might be required to pay could only be levied against business assets.

Example 4: After a customer brings a particularly valuable vase to your store for a valuation estimate, you accidentally drop the vase and it shatters. The customer asks you to cover the repair costs.

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 Antique Store

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 antique store 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

Antique stores 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, your LLC (and every other) will need insurance. It is easy to confuse the limited liability protection of this business structure with insurance, but these are not the same.

Business insurance provides protection for business assets, whereas limited liability protection ensures that an owner’s personal assets are protected from business debts and responsibilities. As such, your antique store may need a variety of business insurance policies.

Common Situations Business Insurance May Cover for an Antique Store

Example 1: In your shop, a freelance antique consultant/dealer is working on her laptop as an intermediary, working out a deal between you and a remote customer. An employee accidentally spills his coffee on her laptop, which is worth several thousand dollars. If you were found liable, general liability insurance would probably help cover some of the damages.

Example 2: A customer brings a very valuable vase into your store for an estimate. You accidentally drop it on the floor, and it shatters. If liable, your business would probably be covered for some of the estimated damages or a settlement reached between you and the customer.

Example 3: One of your employees, who manages the antique business’s online presence, jokingly tweets about another local antique shop being “run by crooks.” He retracts the tweet, but it becomes a popular meme featuring an image of the other antique business’ storefront. Your business is sued for slander. General liability insurance would likely cover some of what your business owes in damages or any settlement reached.

Other Types of Coverage Antique Stores 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 antique stores should obtain.

Commercial Property Insurance

An antique store business absolutely cannot do without a commercial property policy to cover its inventory. Antiques are often irreplaceable vestiges of the past. Only in a colloquial sense are these objects “priceless” — to your business, they are worth a great deal. In the event of disasters like fire or violent weather, your inventory can be covered under a commercial property policy for any damages incurred.

Crime Insurance

Many valuable antiques are small enough to be carried off in the blink of an eye. Crime insurance covers instances of employee theft of business or client property, as well as losses resulting from a forgery. So if a customer asks you to estimate the value of his antique collection and it is stolen overnight by an employee, crime insurance can provide coverage.

Alternatively, if a valuable signed document is purchased by your business, and it turns out to be a worthless forgery, this too can be covered by a good crime insurance policy. Other coverage includes digital fraud and the theft of actual money on your premises.

Home-Based Business Insurance

If you prefer to save on rent and operate out of your own house, this can be a wise choice. Don’t assume that your standard home insurance will act as coverage for issues that arise in the context of your business operation. You may be found liable for damages incurred on the premises of your house during business hours.

This policy can be purchased as part of a business owner’s policy or as an extension (known as a rider) to your existing homeowner’s insurance 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 and commercial property insurance.

Read our Business Insurance for Antique Stores article for more info.

The startup cost really depends on your intention for your antique store. If you are only looking to become a part-time dealer, the startup cost could be as low as a few thousand dollars since all that is really necessary is an online shop (i.e., eBay or Etsy) and a way to receive payments.

However, if you intend to open up a large antique store, you could easily face up to $500,000 in leasing costs.

Visit our How to Start an Antique Store guide to learn more about the costs of starting and maintaining this business.

Since you will continually be buying and selling antiques, you will need to cover these costs in addition to store rent and maintenance costs.

Learn more about running an antique store.

Antique stores profit by purchasing antique items and then reselling them at a higher price to their customers.

Learn more about starting an antique store.

Antique stores are a popular destination for those with a knack for unique and nostalgic products from various times and places around the world.

While some antique stores offer a wide variety of product offerings to the customer base, many are also focused on particular product segments, including furniture, jewelry, prints, or media.

Standard antique store owners have an average profit margin of 30%.

Learn more about starting an antique store.