How To Start An LLC For Gym Business 2023? Free Guide
As a gym owner, you work hard to keep your fitness center as inviting as possible to your customers. Or maybe you run a personal training business in the fitness industry, and you want to make sure you’re using the right business structure.
Regardless, forming a gym LLC could be just what you need. When you form an LLC, you get access to enhanced liability protection to keep your personal assets safe. Plus, as a business owner, you may be able to save money on taxes so you can spend more on gym equipment, a new personal trainer, or a gym-related vending machine business.
But how do you form an LLC? How does it compare to S corp status? And what else should gym owners know about this type of corporation structure and its benefits? We created this guide to answer those questions and tell business owners more about how to form a gym LLC.
So let’s get started.
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What Is An LLC For A Gym Business?
Any new business can become a Limited Liability Company (LLC). It’s a type of legal structure, similar to an S corporation and sole proprietorships. If you’ve been running a sole proprietorship and have a successful gym business, you may wish to form an LLC in order to protect the owner’s personal assets and to keep them separate from the brand’s business assets.
Do I Need An LLC For My Gym?
So if you have your own gym, why do you need to worry about creating a separate legal entity or business entity? You may or may not. It depends on what you care about as a small business owner and what your business objectives are.
For example, LLCs allow you to avoid personal liability in the event that your fitness services go out of business one day. But they also cost money to start. The question is whether you as a gym owner think it’s worth paying the amount of money it costs to start an LLC in your state to gain access to the liability protection benefits.
We’ll provide further information on the pros and cons of turning your fitness business into an LLC in the following sections. But as a gym owner, this is the main cost-benefit analysis you will need to perform to determine whether your fitness industry company should become an LLC.
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LLC Benefits For A Gym Business
As touched on previously, the biggest LLC benefits for a gym business are liability protection. When you form an LLC or get S corp status, your personal finances will no longer be at risk if you run out of money one day and can’t pay state fees or rental properties or meet financial projections.
That means when you have an LLC, C corporation, or S corporation, you can pursue your business plan wholeheartedly without having to worry as much about losing your home or personal assets as you would if you were a sole proprietor.
There are some other potential benefits as well. For example, your fitness business may appear more legitimate if it’s a fully formed LLC. That can be beneficial for things like a stand-alone personal training business.
LLC Tax Benefits And Tax Options For Gym Business
Another major potential benefit of turning your fitness business into an LLC comes in the realm of taxation. When you form an LLC the income your business generates still functions as a pass-through entity and will be taxed based on the bracket for your personal taxes.
However, the state that you form your LLC in may have more tax benefits that can help you with self-employment taxes, avoid double taxation, and receive other benefits when you pay taxes. This varies based on your state’s policies, but it’s worth looking into as you make this decision – especially if you’re interested in potentially improving your self-employment tax outlook.
Basic Steps To Start An LLC For Gym Business
If you’ve decided that you want the limited liability protection of a gym LLC, the next step is figuring out how other gym owners have created one. That process is easier than you might expect. However, it does vary from state to state.
So with that in mind, here are the general steps for turning a personal training business or fitness center into an LLC:
- Visit your secretary of state’s website and find out what forms they request from business owners looking to start an LLC.
- Fill out the forms by listing your personal information, gym’s assets, business plan, and whatever other additional resources are requested by your state.
- Pay any state fees you’re required to pay when submitting your paperwork (these can vary widely from state to state).
- Allow the state to process your paperwork and submit further documentation covering an owner’s personal assets or some other aspect of your personal training business as requested.
That’s basically it. You may also want to take out a general liability insurance policy at some point or consider an S corp if you have other fitness businesses. But if you have your own gym, this is the general process you need to follow to start an LLC and enjoy their limited liability protection.
You may even have an easier time taking out a new business credit card when gym owners choose this business structure. But be sure to do your own research so that when you pay tax or set up a bank account and social media accounts for your personal training business, you don’t run into any issues.
Top 2 LLC Services
If you’ve decided to turn that personal training or gym business into an LLC, you can fill out all the paperwork yourself. But you have fitness equipment maintenance responsibilities, personal training sessions to lead, and fitness trends to research. It may be easier to hire a company to guide you through the process to speed things up.
If you’re interested in partnering with a company that specializes in creating LLCs and S corp businesses, here are two of our favorite options for personal trainers and gym business owners.
|ZenBusiness||Northwest Registered Agent|
|Award||Best Overall||Most Affordable|
|Price||$0 – $299 + state filing fees||$0 – $225 + state filing fees|
|Detail||Read Review||Read Review|
ZenBusiness can help you reach your business goals by guiding you through the LLC formation process. Like a personal trainer helping you reach your fitness goals, Zen Business does it all so you don’t have to. They can also form an S corp or provide ongoing support with business growth, taxation, and account services so you can focus on fitness classes and personal training instead of S corp details and LLCs.
Northwest Registered Agent
Northwest Registered Agent is very similar to Zen Business and offers many of the same services. However, it’s slightly more affordable while providing slightly fewer service options and slightly less customer service support. It’s a cost-saving option that’s very solid, but not quite as good as Zen Business based on our research.
Turning your gym into an LLC can keep your personal assets protected in the event that your company fails one day. It can also open the door to some nice tax savings and management benefits.
If you’re ready to form an LLC, you can do so by following the information included throughout this guide. Or you can hire a professional service provider, such as ZenBusiness or Northwest if you want to simplify the process for yourself. Either way, we wish you the best of luck moving forward.
Frequently Asked Questions (FAQs)
You have to fill out the paperwork requested by the secretary of state where your business is located. They will also typically have a one-time filing fee. The process is easy enough to do on your own, but you can also hire a professional service provider if you want more personalized guidance.
The biggest benefit of turning your gym into an LLC is personal liability protection. If your company goes under one day, your personal assets will be safe from seizure. There are also some potential taxation benefits that are worth exploring, but these can vary by state.
The biggest disadvantage to the LLC structure is needing to pay a filing fee to set it up and potentially paying ongoing annual fees to keep it running. These costs vary by state but can add up.
You can typically turn your gym into an LLC for several hundred dollars or less. It depends on the filing fee that your state charges and whether there are any other fees you have to pay in order to have your paperwork processed.
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- Irs.gov. (2017). Limited Liability Company (LLC) | Internal Revenue Service. [online] Available at: https://www.irs.gov/businesses/small-businesses-self-employed/limited-liability-company-llc.
- Irs.gov. (2017). LLC Filing as a Corporation or Partnership | Internal Revenue Service. [online] Available at: https://www.irs.gov/businesses/small-businesses-self-employed/llc-filing-as-a-corporation-or-partnership.
- Mass.gov. (2021). Limited Liability Companies and Limited Liability Partnerships. [online] Available at: https://www.mass.gov/service-details/limited-liability-companies-and-limited-liability-partnerships.
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