How to Open an LLC or S Corporation: A Step-by-Step Guide for Travel Agents

Also refer to - So you think you want to open a Travel Agency? What you need to know first
Should Travel Agents Form an LLC?

Introduction: Why Structure matters before you grow

At Antravia, we often speak with travel agents who’ve already built real businesses, think steady bookings, repeat clients, and supplier partnerships, yet they’re still operating under their own name. The common reason? “I’m not sure where to start.”

Forming an LLC or S Corporation isn’t complicated, but it needs to be done properly. The structure you choose affects your tax, liability, accounting systems, and how suppliers perceive your professionalism. Here’s how to get it right, step by step.

Step 1: Decide Between an LLC, S Corp, or C Corp

Before filing any forms, you need to decide what you’re actually creating.

LLC (Limited Liability Company)

Best for most small travel agencies and independent advisors. It offers limited liability protection, flexibility in taxation (default sole proprietorship or elect S Corp later), and relatively low compliance.

Why it suits travel agents:

• Simple to form and manage.

• Allows single ownership.

• Keeps personal and business assets separate.

• Easy to convert later into S Corp for tax efficiency.

S Corporation (Tax Election)

Not a different entity type, but a tax election made after forming an LLC or Corporation. The S Corp setup can save self-employment tax once profits rise above roughly $50,000–$70,000.

Why it suits growing agents:

• Owners pay themselves a reasonable salary.

• Remaining profits pass through as distributions, saving 15.3% self-employment tax.

• Requires payroll and more accounting discipline.

C Corporation

Usually for large agencies or those seeking investors. Profits are taxed at the corporate level (21%) and again when distributed to shareholders. Not common for travel advisors but may suit tech or franchise-style expansion.

Step 2: Choose your State and understand the Costs

LLCs and corporations are formed at the state level, not federal. Costs, annual fees, and compliance requirements vary widely.

Some examples of States and info:

In Delaware, the initial filing fee is ninety dollars, and the annual franchise tax is three hundred dollars. Delaware is popular with businesses because of its privacy, simple compliance rules, and strong legal system. It’s an ideal choice if you expect investors or operate across multiple states.

In Florida, the filing fee is one hundred twenty-five dollars, and you’ll pay one hundred thirty-eight dollars and seventy-five cents each year for your annual report. Florida offers straightforward filing and has no state income tax, which makes it attractive for small travel businesses.

In Texas, the filing fee is three hundred dollars, and there is a franchise tax that only applies when profits rise above a certain threshold. This makes Texas a practical choice for agencies with clients nationwide, as many small businesses remain below that tax threshold.

In California, the initial filing fee is seventy dollars, and there is a mandatory annual minimum franchise tax of eight hundred dollars, regardless of profit. It’s one of the higher-cost states but required for California residents or anyone with significant operations there.

In New York, the filing fee is two hundred dollars, and there’s a publication requirement that usually costs between six hundred and twelve hundred dollars, because you must publish your business formation notice in two local newspapers.

In Arizona, the filing fee is fifty dollars, and there are no annual report fees. It’s a low-cost, fast setup option that suits smaller U.S. travel consultancies.

In Nevada, the filing cost is four hundred twenty-five dollars, which includes a business license, and the annual renewal cost is three hundred fifty dollars. Nevada has no state income tax, though its registration fees are higher than average.

In Wyoming, the filing fee is one hundred dollars, and the annual report fee is sixty dollars. Wyoming is often used by non-U.S. business owners because it offers strong privacy protections and simple ongoing compliance.

💡 Tip: If you primarily serve U.S. clients online, you can register in any state, but you may need to file as a “foreign entity” in your home state if you live elsewhere.

Step 3: Name Your Business and Check Availability

• Search your state’s Secretary of State business name database.

• Check domain name availability (ideally matching your brand).

• Verify trademark availability through the U.S. Patent and Trademark Office (USPTO) if you plan to build a brand.

• Avoid names implying government affiliation (“Agency of Travel USA”) or restricted words like “bank,” “trust,” or “insurance.”

Once confirmed, file your Articles of Organization (LLC) or Articles of Incorporation (Corp) online.

Step 4: Appoint a Registered Agent

Every U.S. LLC or Corporation must have a registered agent so an individual or company with a physical address in the state to receive legal and tax correspondence.

Options:

• Be your own agent if you live in the state.

• Use a service such as Northwest Registered Agent, Incfile, or LegalZoom (typically $100–$150/year).

For privacy and reliability, most advisors use a professional service.

Step 5: File for an EIN (Employer Identification Number)

An EIN is the business equivalent of a Social Security Number.

You’ll need it for:

• Opening a business bank account.

• Filing taxes.

• Paying contractors or employees.

• Registering with host agencies and merchant accounts.

Apply free via the IRS online EIN portal:
👉 IRS EIN Application

If you’re not a U.S. citizen, you can still apply by fax or mail using Form SS-4, listing “Foreign” as your legal residence.

Step 6: File Form 2553 (If Choosing S Corp Tax Status)

Once your LLC or Corporation is formed, you can elect to be taxed as an S Corporation.

You must file IRS Form 2553 within 2 months and 15 days of forming the entity or within the first 2½ months of a new tax year.
This election allows pass-through taxation and the ability to pay yourself a salary while avoiding full self-employment tax on profits.

If you miss the deadline, you remain taxed as a sole proprietorship (LLC) or C Corp until the next filing year.

Step 7: Open a Business Bank Account and Merchant Setup

To maintain liability protection, your finances must stay separate from your personal accounts.

• Open a business checking account under the LLC or S Corp name.

• Deposit all client funds and commissions there.

• Use accounting software (QuickBooks Online, Xero, or Wave) to track every transaction.

• Set up a payment processor (Stripe, Adyen, or travel-specific gateways) under your EIN, not your SSN.

Never mix personal and business funds, doing so can pierce your liability protection.

Step 8: Register for Local Licenses and Permits

Depending on your location, you may need:

• A business license (city or county level).

• A sales tax permit (if selling taxable items, e.g., travel merchandise).

• A Seller of Travel license (required in California, Florida, Hawaii, Iowa, and Washington).

💡 Example: California’s Seller of Travel Program requires registration with the Attorney General and a $100 fee.

Step 9: Understand Accounting and Tax Compliance

LLC Default (Schedule C)

• File using Form 1040 + Schedule C.

• Pay income tax and self-employment tax (15.3%) on net earnings.

• Keep records of deductible expenses (advertising, booking software, professional fees, client meals).

S Corporation

• File Form 1120-S annually.

• Pay yourself a reasonable salary (subject to payroll tax).

• Distribute remaining profits as dividends (no self-employment tax).

• Use payroll software (Gusto, ADP, or QuickBooks Payroll) to manage filings.

Multi-State and Foreign Considerations

• If you operate in several states, you may owe franchise tax or annual report fees in each.

• Non-U.S. owners must file Form 5472 and pro-forma 1120 annually to report related-party transactions.

Step 10: Maintain Compliance each Year

Once established, you’ll need to keep your entity in good standing:

• File annual report or statement of information (fee varies by state).

• Renew registered agent and pay annual fees.

• Keep meeting minutes if a corporation (LLCs don’t require them but should maintain records).

• Pay estimated quarterly taxes to the IRS and state revenue agency.

Failure to file can result in administrative dissolution, so set calendar reminders or use your accountant to manage renewals.

Which State is best for Travel Agents?

If you live and operate in one U.S. state, the best place to register your business is your home state. This is the simplest option and avoids the need for what’s called “foreign registration,” which means registering your company again in the state where you actually live.

If you’re based outside the United States but serve U.S. clients, Delaware or Wyoming are usually the most practical choices. Both have flexible rules, strong privacy protections, and straightforward compliance processes that make them easy for non-residents to manage.

If you’re based in California or Florida, you should register in your home state. These states have specific Seller of Travel regulations, and local registration is required before you can sell travel to consumers there.

If you plan to raise capital or scale your agency, Delaware is the preferred state because investors, banks, and corporate lawyers are most familiar with its legal system and company structure.

💡 Example: Many travel tech startups incorporate in Delaware even if they operate elsewhere, because it offers predictable corporate law and privacy.

How Long does it take?

The first step, searching for your business name and filing your formation documents, usually takes one to two business days when done online.

Applying for your EIN (Employer Identification Number) is immediate, it can be completed the same day through the IRS website.

If you’re filing Form 2553 to elect S Corporation tax status, approval from the IRS can take up to thirty days.

Setting up your business bank account typically takes one to five days, depending on your bank’s verification process.

Altogether, the total setup time to open an LLC or S Corporation is usually between one and three weeks, depending on the state where you register and how quickly you prepare your documents.

How much does it cost to open an LLC or S Corp?

The state filing fee to open an LLC or S Corporation usually ranges from fifty to three hundred dollars, depending on where you register your business.

Hiring a registered agent typically costs between one hundred and one hundred fifty dollars per year, though some states allow you to act as your own agent if you live there.

Applying for an EIN with the IRS is completely free, and the same applies to making an S Corporation election using Form 2553.

Your annual report or franchise tax varies widely by state and in some states there is no charge at all, while others, like California, impose a minimum of eight hundred dollars per year regardless of profit.

If you use an accountant or professional formation service to help you set up the business, expect to pay an additional three hundred to eight hundred dollars depending on the level of support you need.

For most U.S. travel agents, expect total first-year setup cost of $300–$1,000 depending on your state.

Final Thoughts: Build it right from day one

An LLC or S Corporation is the foundation of a professional, resilient travel business. It protects your personal assets, opens access to better banking and payment systems, and gives suppliers confidence that you’re serious.

At Antravia, we’ve seen a clear pattern: the agents who formalize early build stronger financial systems, cleaner books, and ultimately higher profits.

If you’re unsure where to start or which state to choose, we can help you evaluate cost, compliance, and growth potential before you file.

👉 Contact Antravia to learn how to structure your travel business for long-term success.

References

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

• IRS – Form 2553: Election by a Small Business Corporation: https://www.irs.gov/forms-pubs/about-form-2553

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

• California Attorney General – Seller of Travel Program: https://oag.ca.gov/travel

• Delaware Division of Corporations – Franchise Tax and Fees: https://corp.delaware.gov/frtax/

Disclaimer:
Content published by Antravia is provided for informational purposes only and reflects research, industry analysis, and our professional perspective. It does not constitute legal, tax, or accounting advice. Regulations vary by jurisdiction, and individual circumstances differ. Readers should seek advice from a qualified professional before making decisions that could affect their business.
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