Setting up a vending machine business isn’t as easy as sitting a machine somewhere and calling it a day. There are business licenses to consider, and one question tends to come up frequently: Do you need to make your vending machine business an LLC? Let’s take a closer look at this issue.
What is an LLC, exactly?
An LLC is a Limited Liability Company. It’s a legal entity that can be formed to own and operate a business. They’re quite popular, especially among small business owners, because they provide the same benefits that you’d get with a corporation, but they’re less formal and are generally easier and less expensive to form and run. They’re recommended for many people starting their own business, especially if you’re concerned with limiting your personal legal liability.
Should my vending business be designated as an LLC?
You don’t necessarily have to designate your vending machine business as an LLC, but it’s usually recommended. The great thing about an LLC is that your personal finances and property is protected in case of any legal action against you, and the profits from your business become your personal income rather than your company’s money, thereby saving you from getting taxed twice on that income.
LLCs are flexible and scalable, which is great for the vending machine operator as the business grows. And it’s simple — unlike a corporation, you won’t need to have a board, shareholders, officers, or other bureaucratic entities. Plus, it makes tax time a breeze. The profits or losses your business incurs pass through the business to the owner’s personal tax return. (This is called “pass-through” taxation.)
What about other licenses and permits?
Be aware that depending on your state or local municipality’s requirements, there may be other licensing and permit requirements to consider. Examples include a beverage license (if your machines sell beverages), food service license, inspection certification by the local health department, and more. Your best course of action is to get in contact with your city or state’s licenses, permits, and tax board to learn more.
Red Tape Making Your Head Spin?
That’s okay — we’re here to help. Get in touch with Naturals2Go, your partner in your vending machine journey. We’ll walk you through the red tape and help you get set up with everything you need to become a successful vending operator.