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Do I need to form a Business Entity?

by John
(Westchester)

Hi. My name is John and I am a personal trainer from Westchester, NY. I already have personal training liability insurance up to $2,000,000 per occurrence and $3,000,000 aggregate. I work for myself as a personal trainer and do the majority of my business as a cash operation and would prefer to limit the amount of taxes I pay. I do own a home and have a wife and two children.

With all that information, do you feel it is necessary to incorporate as an L.L.C. or other business entity in order to protect my assets and family from being sued; or do you feel that the insurance which I already possess is adequate.
Thanks.

John

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LLC yes
by: Anonymous

If you want to insulate yourself from personal liability, you will have to go LLC/S corp etc. The insurance itself will not protect you from all liability.

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Absolutely!!
by: Mike

At no time should anyone run a business without the tax benefits and protection of a corporation - either s-corp or LLC. You are giving away 25 -40% of your revenue depending on your income from other sources. There is some work involved, but an attorney can help you get set up for about 2k in most places.

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form an LLC
by: Gustavo

Yes, you should form an LLC especially if you own your own home and other property. I also live in westchester and if you deal with clients from upper westchester then I would highly recommened it. you can go to www.dos.state.ny.us for more information this is where you would go to form the LLC.

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Sole Proprietor , LLC or S Corp

by Mike O'Donohoe
(Northport, NY, USA)

I'm starting a peronal training business. It will be just me, on my own. I'm not sure if I should simply set it up as a Sole Proprietorship, LLC or S Corp. What is typically done?

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LLC is the simplest form that provide protection
by: Anonymous

A sole proprietorship is basic to set up, costs nothing but puts all your assets at risk.

An LLC is a little more expensive to setup but will shield your personal assets (house, bank accounts, retirement savings) in case you get sued.

An S-Corp will do all the same as the LLC but is significantly more complex to set up and manage (you have to file corporate tax returns).

Legalzoom seems to be the cheapest way to set up a company.

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Is sole proprietor the best way to from a business with a home gym for the location?

by Judy A
(Victor, NY, USA)

If I am forming a personal training business, and the location will be my home gym and possibly parks, and clients' homes, is a Sole Proprietorship the ideal way to go or not?

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What do you have to lose
by: Katie - Admin

While sole proprietorship is the easiest business to start, it is not necessarily the best even for a simple home business. The question you have to ask is 'what do i have to lose' as in what assets will I lose if somebody gets hurt and sues me. A SP provides no asset protection. They can take your house, your car, your retirement savings.

Depending on your financial situation and assets owned you may want to consider a business entity with some asset protection like and LLC or Corp.

- Katie

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Things you need to know when you set up your business structure
by: Machelle Lee The Invisible Gym

Your local SBDC Small Business Development Center http://www.sba.gov/localresources/index.html is a great resource to help you make this decision. We can’t say enough how helpful this organization is for anyone looking to start a business or for help with an existing business.

The other resource I would recommend is:
NOLO Press Guides www.nolo.com
Law forms and do-it-yourself legal kits and books for consumers and small businesses

Good luck and I hope this information is helpful!

Choosing Your Business Legal Structure
A business may be conducted through a variety of organizational structures. Generally, a business structure is chosen for liability and/or tax reasons.

Sole proprietor
Limited Liability Company
S-Corporation
C-Corporation

Sole Proprietorship
One person operating a business as an individual
1. Easy to set up and maintain
2. Profits are taxed as income to the owner
3. Owner is personally responsible for all business debt

Limited Liability Company
Combines selected corporate and partnership characteristics while still maintaining status as a legal entity distinct from the owners. As a separate entity, the business/company can acquire assets, incur liabilities and conduct business.
1. Provides the benefits of a corporation, but less complicated to set up and maintain.
2. The business investment is the only risk – personal assets of the owners are not at risk.

S-Corporation
A corporation that can be taxed as a partnership or sole proprietorship with the profits being taxed at the individual (not at the corporate) rate. Check with IRS www.irs.gov for qualifications.

1. Benefits corporations that want a simpler tax structure that passes income to owner(s).
2. Many of the tax benefits now are available through Limited Liability Corporations with fewer restrictions

C-Corporation (living, breathing entity, not attached to owners) Legal entity made up of persons who have received a charter legally recognizing the corporation as a separate entity having it’s own rights, privileges and liabilities apart from the individuals forming the corporation. It is the most complex business structure.
1. Made up of three groups of people – shareholders, directors and officers.
2. The corporation can own assets, borrow money and perform business functions without directly involving the owners of the corporation.
3. Subject to more government regulation than proprietorships or partnerships.
4. Corporate earnings are subject to double taxation when the corporation is taxed and when passed through as stockholder dividends.
5. Can be complicated and expensive to establish and maintain.

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Is it necessary to form a business entity?

by John
(New Rochelle, NY, USA)

Hi. My name is John and I am a personal trainer ready to launch my own part-time home business. I will be training clients at their homes, parks, rented space in gyms and my own personal home. I already have personal training liability insurance for $1,000,000 per each occurence and $2,000,000 aggregate. For the majority of my business I would like to receive payment by cash or check. With all this information, would you still feel it would be necessary to create my business as an L.L.C. this way my personal assets would not be at risk if I were sued? Thanks.
John

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Online Training Services - Legal Requirements?

by Jason
(Pembroke Pines, FL)

I have just started an online fitness and nutrition coaching website and wanted some clarification on a couple of very important issues. The first being insurance. Although I am not doing any hands-on work with clients and have a good disclaimer that reiterates the services provided are informational only, do I need to have insurance and if so what kind and how much?

The second issue is in relation to the entity. Should I set up an actual organization or corporation? If so, should it be an LLC?

Thank you in advance. I would truly appreciate any advice or assistance.

Jason

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Insurance and Entity Selection
by: Charles C. Weller -- Fitness Lawyer

Even though you have clients sign liability waivers, this does not preclude the filing of a lawsuit against you. Without an applicable insurance policy, you are obligated to pay out of pocket all defense costs associated with the lawsuit.

Forming a corporation often is a good idea. Also, doing business as a corporation may help insulate you from certain personal liabilities in your business (please note that it does not eliminate all liability). I prefer to set up corporations versus LLCs for my clients in the fitness industry (especially personal trainers). If you are a one-person business and there are no investors involved, I find the corporation to be the best choice. Please feel free to contact me directly for more information.

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Best Business Entity

by Lydia Myhren
(Sparta, NJ, USA)

I am looking forward to starting my a "in-home" personal training business specific to young moms and moms to be in Sparta, NJ. I've just begun my research into business considerations, policies, marketing, insurance, etc. I have read that it is best to incorporate your business to keep personal funds and business funds separate. I am wondering if you agree with this and could offer any advice on how to go about doing this? And if you could recommend an attorney in this area? Thank you!

Sincerely,
Lydia Myhren

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Best Business Entity
by: Charles Weller - FITNESS LAWYER

Incorporating your "in home" personal training business offers you the same advantages as any other personal trainer who decides to incorporate. Some of these benefits include protecting your personal assets from potential business liabilities, tax advantages (corporations have more favorable tax treatment and get to use pre-tax dollars for business expenses, and additional business deductions (medical reimbursement plans, disability insurance, health insurance premiums, retirement plans, etc.) While it is a good idea for any business to segregate personal and business funds, it is a requirement for all corporations. It is a good idea to have an experienced attorney familiar with your type of business set up your corporation. You do not need to use a local attorney in order to do so. Please let me know if I can be of further assistance.

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best business model for each entity
by: Gary

I am providing fitness training as an independent contractor. I work in a studio setting and also provide training in the home.

Would it be possible to give a review of the business models that would be the best fit for each entity? Thanks for your help.

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Fitness Business Entity

by tonny nelson
(texas)

Hello,

I am looking to start my own fitness boot camp in Texas. I am ready to roll but have questions on legal issues. I have been told that I need to set myself up as an llc due to the liability issues involved. I was also ready to head down to the local tax office to get my business license and fill out a dba(doing business as) but I thought I read on the internet that these steps are included when setting up the llc. Where would I go to have all of these issues handled....fitness attourney like yourself, accountant?

Would love to hear from you.

Thanks.
Tonya Nelson

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Fitness Business Entity
by: Charles C. Weller -- FITNESS LAWYER

In terms of liability protection, a corporation and an LLC are very similar. The choice between an LLC and corporation should be selected carefully as you want to make sure you have the appropriate entity moving forward. Find a lawyer (such as myself) who has experience with fitness businesses in forming your business entity. You cannot obtain a d/b/a until after your business entity has been created. If you are advised to do business as a corporation (as most of my clients do), then you will need to make a tax election between an s-corp or a c-corp. Feel free to contact me if you like more information.

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sole proprietoship and liability

I am currently living with my parents in Illinois and have $7000.00 to my name which is in a checking account. Otherwise I have no assests in my name. I want to start a business training clients in their homes. I am thinking of starting as a sole proprietor to keep the startup cost down and see if the business becomes successful enough. Then if it does I will switch to an S Corp. I know I will have personal liability for now, but I don't don't need to take out any loans or incur any debt. And I will purchase liability insurance before starting. Does this plan sound ok or is it foolish to start out without first starting an LLC or S Corp?

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