Should Travel Agents Form an LLC?

Should Travel Agents Be an LLC?
Understanding business structures and why it matters for your travel agency

If you’re a travel agent running your own travel business, and whether you are full-time or part-time , you’ve probably come across the term LLC and wondered whether you need one.

We get this question a lot at Antravia. Of course, you can operate without forming a legal entity. Many agents do. But whether you should is a different question. And as your income grows or you take on more clients, your legal and accounting risks grow too. So it’s worth understanding the difference.

This guide walks through what an LLC is, when it makes sense, and what it means for your tax and accounting setup.

So at Antravia, we are going to try and answer this question - Do I need to register a company? Or can I just keep operating under my own name?

At Antravia, we focus on helping travel professionals get their business foundations right and with practical, international-minded advice that keeps your growth and compliance finance goals aligned.

Why structure matters

Your business structure is more than just a legal formality. It affects everything from how you get paid to how much risk you carry.

• Legal protection – An LLC (Limited Liability Company) separates your personal and business finances. If something goes wrong — a client dispute, refund request, or supplier issue — your personal assets aren’t exposed.

• Tax efficiency – A clear structure helps you claim the right deductions, manage your income cleanly, and avoid overpaying tax. Sole proprietors often leave money on the table without realizing it.

• Professional image – Having a proper business entity builds trust. Whether you’re dealing with B2B suppliers or trying to access better payment systems, being formally set up helps.

• Scalability – Want to grow your team, take payments in multiple currencies, or expand into new markets? It’s much easier with the right structure in place.
  
  

What is an LLC?

An LLC (Limited Liability Company) is a U.S. legal structure that separates your personal assets from your business. It’s not a tax classification but it is a legal form of "wrapper" that protects your personal finances if something goes wrong in the business. Think of it like a waterproof jacket: you can operate without one, but if it rains, you’re going to feel it.

Under an LLC, you can still file taxes using your personal return (as a sole proprietorship), or you can elect to be taxed as an S Corporation or even C Corporation, depending on your business needs.

LLC vs Sole Proprietor vs S Corp – What’s the Difference?

If you're based in the U.S. or selling to U.S. clients, these are the three most common structures:

Sole Proprietor
This is the default setup when you operate under your own name without registering a company. It’s simple, but you have no liability protection and you’ll likely pay full self-employment tax on your income. It may work for small or casual setups, but it’s risky as you grow.

LLC (Limited Liability Company)
This is the most flexible and popular option for small businesses. It offers liability protection and a clean separation between personal and business income. LLCs also make it easier to manage finances and work with accountants, banks, and payment platforms.

S Corp (Tax Election)
Once your profits reach a certain level (typically around $75,000+), electing S Corporation tax status can help reduce your self-employment taxes. This structure splits your income between salary and distributions. It requires more admin, as well as including payroll, but can be worth it financially.

For travel professionals outside the U.S.

Even if you're not based in the U.S., your structure still matters and especially if you’re selling to U.S. customers, working with U.S. platforms, or getting paid in USD.

A U.S. LLC can give international travel agents:

• A formal U.S. presence

• Access to U.S. banking and payment gateways

• Clean separation between global income streams

• A more professional setup when working with U.S. suppliers or clients
  

At Antravia, we offer guidance on how to structure your business to support international sales, navigate cross-border tax challenges, and maintain flexibility as you grow.

Do You Need an LLC as a Travel Agent?

The IRS doesn’t require you to have an LLC. You can report your income as a sole proprietor using Schedule C. You can even use your Social Security Number instead of an EIN if you’re operating under your own name.

But the moment you:

• Start using a business name

• Want to open a separate business bank account

• Need contracts or liability protection

• Plan to grow your agency, or take on a team

...you should strongly consider forming an LLC.

Not only does it help limit personal liability, but it also sends a signal to vendors, suppliers, and host agencies that you’re serious. In fact, some host agencies now require you to have an EIN or formal entity before they’ll accept you.

What are the Accounting and Tax Implications?

From a tax and accounting standpoint, here’s what changes when you go from sole proprietor to LLC:

• LLC as Sole Proprietor (Default)
  You’ll file using Schedule C, just like you would have done before. You’ll pay income tax and self-employment tax (Social Security and Medicare) on your net profit. You must keep good records of all income, commissions, and deductible expenses. This includes client meals, advertising, business travel, and home office expenses.
  

• LLC as S Corporation (By Election)
  This is where it gets more advanced. You must pay yourself a reasonable salary through payroll, and the rest of your profit can be distributed as owner’s draw and this would avoid self-employment tax. But you’ll need proper accounting, a payroll system, and regular IRS filings. Many agents switch to this structure once their net profits exceed ~$50,000 a year, where the tax savings can outweigh the extra admin.
  

IRS Form 2553 is required to make the S Corp election. If you don’t file this in time, you’ll remain taxed as a sole proprietorship.

💡 Tip: The IRS explains the differences here:
https://www.irs.gov/businesses/small-businesses-self-employed/business-structures

So.. when to make the change?

There’s no single threshold, but here are signs it’s time to form an LLC:

• You’ve earned more than $10,000 in commission or trip fees this year

• You’re starting to book groups, tours, or handle supplier payments

• You want to grow or build a recognizable brand

• You’re opening a business bank account or taking on business credit

• You want more professional credibility when working with vendors or host agencies

• You’re starting to worry about liability or protecting your personal savings

Costs and Setup - what are they?

Setting up an LLC varies by state. Some charge under $100. Others, like California, have a mandatory $800 minimum franchise tax. You’ll also need:

• An EIN (Employer Identification Number) — free from the IRS

• A business license depending on your city or county

• Accounting software to track income and expenses

• A registered agent (required in most states, can be yourself or a service)
  

You may also need to file an annual report and pay ongoing fees, depending on the state.

What About a DBA?

A DBA (Doing Business As) lets you use a business name without forming an LLC. But it doesn’t give you legal protection. It’s a naming permission and not a business entity. Some agents use this to operate under a brand name while remaining sole proprietors, especially in the early days as they grow their business.

But keep in mind: you’ll still be personally liable for any business issues, client disputes, or debts.

So, Should You Form an LLC?

If you’re just starting and keeping things small, working part-time with only a few clients, you might not need one right away. But once your business has income, bookings, or obligations, even if modest ones, an LLC is worth considering.

It’s not just just about taxes. It’s about professionalism, how you are seen by others in your travel business, liability protection, and being ready to grow.

We’ve worked with hundreds of travel agents and small agencies. What we have seen is actually clear: those who treat their business like a business, and think about proper accounting, structure, and finance systems, are more likely to succeed and scale.

What Antravia Offers

Antravia specializes in U.S. finance, accouting and tax consultancy focused on the travel and hospitality space. Our advisory services help travel agents choose the right structure - whether you're just getting started or preparing to scale.

We provide practical insights to:

• Understand the pros and cons of different business types

• Align your setup with your business goals

• Avoid common financial mistakes that cost time and money
  

We work with businesses that need clarity, strategy, and compliance.

Not sure if you should set up a U.S. entity?
Read our full guide on expanding into the U.S. as a travel agent.

Not sure if you need an LLC?

There’s no one-size-fits-all answer - but it’s worth thinking about early as you grow your travel business. Your structure can help protect your earnings, simplify your tax situation, and support your long-term goals.

If you're unsure what setup fits your travel business, we can help.

👉 Contact Antravia

References

• IRS – Business Structures:
  https://www.irs.gov/businesses/small-businesses-self-employed/business-structures

• IRS – Applying for an EIN:
  https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online

• U.S. Small Business Administration – Business Guide:
  https://www.sba.gov/business-guide/launch-your-business/choose-business-structure