Should I Start an LLC for My Summer Camp?

Starting a limited liability company (LLC) for your summer camp 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 summer camp, lawsuits can arise from things like campers injuring themselves on faulty equipment the camp refused to fix or misleading exaggerations about employees’ qualifications.

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

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

Do I Need an LLC for a Summer Camp?

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 Summer Camp

By starting an LLC for your summer camp, 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.

Summer camps will benefit from liability protection because of the risk of being sued for personal injuries, property damage, and libel.

Example 1: A more senior employee at your summer camp business made intentionally false representations about both the qualifications of your staff and the business’s safety protocols in order to entice more customers. Upon discovery of this, your business was sued for fraud. In this instance, your personal assets would be protected from any obligation to pay damages the court may impose on the business.

Example 2: A camper claimed they had been unfairly treated as a result of their sexual orientation at the hands of your staff. As such, they brought a discrimination lawsuit against your business as a whole. Limited liability would protect the business owner from being held personally liable for any damages the plaintiff is awarded in this case.

Example 3: A member of staff employed by your summer camp injured themselves with a faulty piece of equipment they claim the camp was aware of but refused to fix. This prompted the staff member to bring a negligence lawsuit against your business. If the court awards damages to the plaintiff, these cannot be imposed on your personal assets.

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 Summer Camp

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 summer camp 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

Summer camps 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 the limited liability protection from an LLC protects your personal assets, not your business assets.

Insurance provides summer camp businesses with financial protection in the event that an unforeseeable circumstance causes some monetary loss. For example, if an employee were to injure themself on the job, insurance helps pay for medical bills.

Common Situations Business Insurance May Cover for a Summer Camp

Example 1: A visiting parent slips on the pool deck and needs stitches on his forehead. General liability insurance would cover the parent’s trip to the emergency room and any resulting medical bills.

Example 2: On a canoe trip, one of your counselors drops a cooler in a rented canoe and dents the bottom. The canoe company asks you to replace the damaged canoe. A general liability policy would cover the canoe repair or replacement costs.

Example 3: During a small fireworks display on the last night of camp, a falling flame burns a local homeowner as they walk by the property. General liability insurance would cover damage to the homeowner’s clothing and any medical bills resulting from the incident.

Other Types of Coverage Summer Camps 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 summer camps should obtain.

Commercial Property Insurance

If your camp owns the buildings in which it operates, you need commercial property insurance to cover the buildings and business property stored there in the event of a fire, burglary, or natural disaster. Be sure to carefully consider any build-outs and renovations to your buildings—as well as replacement costs for your business property—when securing coverage.

Workers’ Compensation Insurance

Most states require businesses to carry workers’ compensation insurance for their part-time and full-time employees. This coverage protects your employees if they become injured at work or fall ill after a work-related accident. It not only covers an employee’s medical bills and lost wages if they need time to recover but also any disability benefits stemming from a work-related accident. While your state may allow exemptions for business owners, consider including yourself in your workers’ compensation policy if you engage in the daily operation of the business.

In addition to the policies outlined above, there are a few other types of coverage your summer camp 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.

Commercial Auto Insurance

If your camp owns a van to transport campers or to conduct other business, state law requires you to carry at least state-mandated minimum levels of commercial auto insurance. Since the minimum requirement only offers basic protection, consider purchasing limits greater than those required by state law.

Commercial Umbrella Insurance

Summer camps often face sizable risks, and while your general liability 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, and commercial property insurance.

Read our Summer Camp Business Insurance article for more info.

A substantial amount of startup capital is required in order to launch your summer camp business. Note that if you intend to open a sleepaway camp, these initial costs will be even higher. The primary costs of starting your summer camp include buying all the necessary liability and medical insurance, licensing, utilities, and transportation.

Visit our How to Start a Summer Camp guide to learn more about the costs of starting and maintaining this business.

Ongoing expenses include rent or grounds maintenance, payroll, insurance costs, and marketing. Sleepaway camps also need to pay for food and overnight staff.

Learn more about running a summer camp.

Summer camps charge parents in order for their children to attend camp.

Learn more about starting a summer camp.

Summer camps provide a variety of fun activities for children to keep them occupied and help them develop. Some have a theme focused on different interests such as sports, crafts, or outdoor activities.

A well-run summer camp can see profits of between 25% and 40%.

Learn more about starting a summer camp.