Should I Start an LLC for My Horseback Riding Lessons Business?

Starting a limited liability company (LLC) for your horseback riding lessons 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 horseback riding lessons business, lawsuits can arise from things like an instructor accidentally injuring a horse or a customer falling down during a riding lesson and requiring medical treatment.

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

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

Two children on horses being guided by an instructor

Do I Need an LLC for a Horseback Riding Lessons 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 Horseback Riding Lessons Business

By starting an LLC for your horseback riding lessons 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.

Horseback riding lesson businesses will benefit from liability protection because of the risk of injuries to clients, property damage, and other business risks.

Example 1: One of your horses gets loose from the stable and injures a beginner student. The student asks that you cover the resulting medical expenses. Since your business is an LLC, limited liability protects your personal assets from being used to cover medical expenses.

Example 2: A competitor is attempting to sue you, deeming that your advertising is libelous and has caused harm to their business. Should you be found in the wrong, your personal assets can’t be taken in the settlement since they are protected with limited liability from the LLC structure.

Example 3: While moving a horse from the stable, the animal becomes scared and kicks, hitting a student’s vehicle and dealing severe damage. They demand you pay for the repairs. As an LLC, limited liability protects your personal assets so they cannot be used to pay for the repairs.

Example 4: One of your horses gets loose from the stable and injures a beginner student. The student asks that you cover the resulting medical expenses.

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 Horseback Riding Lessons 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 horseback riding lessons 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

Horseback riding 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?

All businesses need insurance to protect their business assets — even LLCs. This is because limited liability protection from being an LLC protects your personal assets, not your business assets.

Since your horses are important to your business, insurance can help protect them and your other assets. If your horses are injured while working, their medical expenses can be covered by having insurance for your business.

Common Situations Business Insurance May Cover for a Horseback Riding Lessons Business

Example 1: One of your horses gets loose from the stable and injures a passerby. The passerby is seeking payment for damages and has named your company in a lawsuit. General liability insurance should cover the cost of their medical bills and your legal expenses.

Example 2: One of your client’s horses suffers an injury during a lesson, and they are blaming your business for the incident. The business owner can turn to their general liability policy for damages awarded by the courts.

Example 3: Your employee was overheard at a dinner party insulting the other horseback riding lessons business in town. They are suing your company for defamation of character, claiming their business has suffered as a result.

Other Types of Coverage Horseback Riding Lessons 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 horseback riding lessons businesses should obtain.

Professional Liability Insurance

Both humans and horses are unpredictable, leaving much room for unexpected incidents. If a client claims your company did not deliver the agreed-upon services, they could hold you liable. Professional liability insurance offers protection against these claims.

Due to the significant liability exposure, businesses should address any potential coverage gaps with their insurance professional and inquire if a policy is claims-based or occurrence-based.

Commercial Umbrella Liability Insurance

There are so many factors that are out of your control. Horseback riding lessons businesses can add another layer of protection against liability claims with a commercial umbrella policy. This policy picks up if you exhaust the underlying general liability policy limits.

Commercial Auto Insurance

This business venture will likely take you on the road from time to time. When you use a vehicle for business purposes, insurance carriers require a commercial auto policy, excluding business-related accidents on a personal auto policy. This policy covers damage to your auto, as well as other damaged vehicles and injured parties, should you cause an accident. Most states regulate the minimum coverage required, leaving many underinsured and exposed to potential lawsuits. Your insurance professional can assist in determining the best coverage limits for your needs.

You can purchase commercial auto insurance as part of a business owner’s policy (BOP) or as a standalone policy.

Workers’ Compensation Insurance

Most of these policies cover your assets and clients but not your employees. The state requires carrying workers' compensation insurance for staff, which covers medical bills and lost wages if they experience an on-the-job injury or illness. Due to a higher risk for injury, business owners should carry coverage limits higher than their state’s legal minimum requirements.

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.

Read our Business Insurance for Horseback Riding Instructors article for more info.

Opening a horseback riding lessons business is a costly venture. You'll have to buy land if you don't have it, and you’ll have to build stables if you don't have them. You could expect to spend $3,000+ per acre for good flat land and about $100 per square foot for stables and indoor arenas, depending on your location.

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

The ongoing expenses of running a horseback riding lessons business include maintenance of the horses, stables, barns, and equipment, veterinary care, marketing, insurance, permits, and labor.

Learn more about running a horseback riding lessons business.

Horseback riding lessons businesses make money from giving horseback riding lessons to their customers. They can also diversify their income by offering extension services such as boarding and training horses for other horse owners.

Learn more about starting a horseback riding lessons business.

The global market for the equine industry, valued at $30 billion, is “one of the biggest industries that is hidden in plain sight,” with the US market accounting for 34% of the industry.

Horseback riding lessons are on an upward trend. Business insiders attribute this upward trend to several factors including the fact that compared to other physical activities, there are few limits to the types of people who can participate in it.

A horseback riding lessons business is typically an extension business for a horse stable. A profit margin of at least 25% is considered a healthy margin for horse businesses.

Learn more about starting a horseback riding lessons business.