How To Start An LLC For Personal Trainer 2023?

Turning your personal training business into a limited liability company (LLC) could help you protect your personal assets and save money on taxes. But if you’re interested in this business structure, it’s not always clear where you should begin as a business owner.

That’s why we’re here. This article covers everything you need to know in order to set up a separate legal entity for your new personal training business LLC. Keep reading to learn more about forming an LLC in the fitness industry as an independent contractor, S corp business owner, or sole proprietor.

What Is An LLC For Personal Trainer?

An LLC for a personal training business is a type of business structure that you can use to operate as a personal training business owner. It’s an alternative to a C corporation, S Corp, sole proprietorship, and unincorporated business structure.

Every type of business structure has its own pros and cons in relation to liability protection, self-employment taxes, and business formation costs. That’s why it’s important to choose the right business structure for your goals as a new business owner in the fitness business.

The Benefits And Drawbacks Of Using An LLC For Personal Trainer

Benefits

Of all the business structures available to personal training businesses, none offer quite the same mix of pros and cons as forming a limited liability company. That’s why this structure is popular amongst personal trainers.

The biggest benefit of LLCs for personal training businesses is the reduction in personal liability. If your personal trainer business ends up being sued or goes under, your LLC’s limited liability protection will keep your personal assets safe from seizure. The same isn’t true for a sole proprietor and may not be true for an S corporation or C Corp either.

Turning your personal training business into an LLC can also make it appear more legitimate to your target market. You may have an easier time finding personal training clients than you did as an independent personal trainer without an LLC or sole proprietorship.

Drawbacks

On the downside, the LLC entity structure costs money to form and maintain. Filing fees can be as high as several hundred dollars initially and annually. But it varies based on where your business entity is formed, as each state has its own rules and regulations related to filing taxes, business license charges, and other fees for tax purposes.

What Are The Tax Benefits For An LLC Personal Trainer?

There is also a significant benefit related to taxes for business entities that become LLCs. The biggest is that you can avoid double taxation. That way, when you pay taxes, you save money.

There are also various LLC tax benefits tied to the state that you operate in. Some states have more tax benefits than others, so it will be important to research your tax options as an LLC in your state as you decide whether this tax structure is right for your personal training business.

How To Form An LLC For a Personal Trainer? Steps By Steps

If you think an LLC is right for your personal training business, the next step is researching how to do it. These instructions should help. Below, you’ll find step-by-step guidance for forming a limited liability company (LLC) that can protect your personal assets while continuing to allow you to be your own boss as you see potential clients in training sessions.

Research LLC formation requirements in your state

First, take the time to look up the LLC formation requirements for a personal training business in your state. They can vary substantially and it will be important to have clarity about what you need before getting started. 

For example, you might have specific requirements for professional liability insurance, setting up a business bank account, and business name requirements. You may even need to share some business plan details or information about a general partnership you have with the gyms where you conduct your training sessions. It all varies based on the state you’re in.

Fill out the required forms

Once you know which forms your personal training business needs to fill out, you can begin completing them. To do so, you may need to state where your business assets are being held, whether you own any exercise equipment, and other details about your business model and training session process. But this varies by state, whether you’re forming an anonymous LLC or sole proprietorships.

Pay the filing fees

Next up – pay the filing fees your personal training business incurs while putting together its LLC paperwork. There will typically be one for your LLC operating agreement, which personal trainers will almost always need to fill out.

Filing fees can be as little as $50 or as high as several hundred. It just depends on where your personal training business and your personal assets are located. You may also have an ongoing annual filing fee, unlike your sole proprietorship. This can be between $50 and several hundred dollars as well. It will be one of your new ongoing business expenses to keep track of as you plan out your business finances and work towards becoming a successful business with your training session, physical exercise, and general partnership goals.

Prepare your personal training business to function as an LLC

Once you submit your paperwork, you can start preparing your personal training business to function as an LLC. That means separating your personal assets from your business bank account, making sure you have the right limited liability protection in place before running another personal training session, and nominating a registered agent.

Your registered agent doesn’t have to be a business attorney. It could be you, a partner, or a professional service provider if you want to spend more time focusing on running your personal training business and overseeing personal trainers and less time on paperwork and administrative tasks.

Fix any errors identified on your original formation paperwork

Within a few weeks, your state should get back to you and let you know if any additional information is needed before your personal training company can become an LLC. If so, be sure to fix those problems in a timely manner so that you can begin overseeing your personal trainers with the LLC structure instead of a sole proprietorship as soon as possible.

Top 2 LLC Services

Even if you know that an LLC is the right entity structure for you, you may still want some support with the formation process. Each of the following companies can provide that support so that you can focus more on your business plan and business name than the fine points of limited liability protection.

ZenBusiness

ZenBusiness can guide you through the full formation process from start to finish. The company also offers ongoing support with accounting, taxes, marketing, and growth. Whether you need help verifying that you qualify for pass-through taxation or choosing a business name and setting up a business plan, ZenBusiness can help you do it better.

Northwest Registered Agent

Northwest offers similar services to ZenBusiness but prices them slightly lower. It also lacks after-hours customer support, which ZenBusiness offers. If you need help forming a pass-through entity and aren’t sure where to begin with liability insurance, Northwest can be a great partner as well.

Tips To Maximize Benefits For An LLC Personal Trainer

If you run a solo LLC as a personal trainer, it can be easy to merge your personal and business finances together. But the first tip you should know is that it’s really important to avoid the temptation. Otherwise, you could offset some of the asset protection and taxation benefits of the LLC business structure.

Another tip is that it may be a smart move to work with a professional service provider – at least at the beginning of your LLC. They can help you identify the best tax-saving opportunities in your state and ensure that you don’t miss any details that could carry fines or penalties.

Final Thoughts

The bottom line is that forming an LLC can be a smart move for a personal trainer looking to take their business to the next level. It can keep you protected in the event that the business faces financial challenges and help you save on taxes. It can also be relatively affordable to set up an LLC, depending on the state you live in.

You can either use this guide to create the LLC on your own or hire one of the services we referenced above. Either way, forming an LLC could be the first step toward taking your business to the next level.

Frequently Asked Questions (FAQs)