Do I Need an LLC for My Personal Training Business?

Starting a limited liability company (LLC) for your personal training business can provide several benefits.

Most importantly, an LLC structure offers limited liability to its owners, which can protect their personal assets from lawsuits and creditors.

For a personal training business, lawsuits can arise from things like a customer injuring themselves during a PT session due to inadequate supervision by their trainer.

LLCs are also affordable, highly flexible (from a tax point-of-view), and can make your personal training business seem more credible.

Recommended: Use Northwest to form an LLC for $29 (plus state fees).

Should I Start an LLC for My Personal Training Business?

LLCs are a simple and inexpensive way to protect your personal assets and save money on taxes.

You should start an LLC when there's any risk involved in your business and/or when your business could benefit from tax options and increased credibility.

LLC Benefits for a Personal Training Business

By starting an LLC for your personal training business, you can:

Protect your savings, car, and house with limited liability protection
Have more tax benefits and options
Increase your business’s credibility

Limited Liability Protection

LLCs provide limited liability protection. This means your personal assets (e.g., car, house, bank account) are protected in the event your business is sued or if it defaults on a debt.

Personal training businesses will benefit from liability protection because of the relatively high risk involved with instructing people in physical activities. Other risks include things like trademark infringement and even data breaches.

Example 1: A middle-aged man who is interested in joining a marathon hires you to train him for the big event. Three days into the marathon, in the course of a training session, he pulls a hamstring and has to be rushed to the hospital. An MRI reveals severe injury, which would take at least six weeks to heal. If he goes on to sue, the lawsuit will only affect your LLC’s assets.

Example 2: You are hired by a group of parents to train their teenage children. One day, you suddenly receive a phone call that an overweight child has been a victim of bullying while attending sessions. You were unaware of this, but the parents intend to sue you for negligence. With an LLC structure in place, your personal assets will remain safe from fines imposed by the court.

Example 3: You are hired to work with stuntmen for a movie trailer. While setting up your equipment for the shoot, one of them is mistakenly injured. He is rushed to the hospital for urgent treatment but has to recuperate for a month. He sues you for lost work. In the ensuing litigation, limited liability shields your personal assets from being used to compensate for damages.

An LLC will also protect your personal assets in the event of commercial bankruptcy or loan default.

To maintain your LLC's limited liability protection, you must maintain your LLC's corporate veil.

LLC Tax Benefits and Options for a Personal Training Business

LLCs, by default, are taxed as a pass-through entity, just like a sole proprietorship or partnership. This means that the business's net income passes through to the owner's individual tax return.

The business’s net income is then subject to income taxes (based on the owner's tax bracket) and self-employment taxes.

Sole proprietorships and partnerships are taxed in a similar way to LLCs, but they do not offer limited liability protection or other tax options.

S Corp Option for LLCs

An S corporation (S corp) is an IRS tax status that an LLC can elect. S corp status allows business owners to be treated as employees of the business (for tax purposes).

S corp tax status can reduce self-employment taxes and will allow business owners to contribute pre-tax dollars to 401k or health insurance premiums.

The S corp status requires that the business pay the employee-owner(s) a reasonable salary for the work they perform.

In addition, the business might need to spend more on accounting, bookkeeping, and payroll services. To offset these costs, you'd need to be saving about $2,000 a year on taxes.

We estimate that if a personal training business owner can pay themselves a reasonable salary and at least $10,000 in distributions each year, they could benefit from S corp status.

You can start an S corp when you form your LLC. Our How to Start an S Corp guide will lead you through the process.

Credibility and Consumer Trust

Personal training business sometimes rely on consumer trust. Credibility plays a key role in creating and maintaining any business.

Businesses gain consumer trust simply by forming an LLC.

A growing business can also benefit from the credibility of an LLC when applying for small business loans, grants, and credit.

Northwest will start an LLC for you for just $29 (plus state fees).

Get Started

How to Form an LLC

Forming an LLC is easy. There are two options for forming your LLC:

You can hire a professional LLC formation service to set up your LLC for a small fee
Or, you can choose your state from the list below to start an LLC yourself

Select Your State

For most new business owners, the best state to form an LLC in is the state where you live and where you plan to conduct your business.

Do LLCs Need Insurance?

All businesses need insurance to protect their business assets — even LLCs. This is because the limited liability protection from an LLC protects your personal assets, not your business assets.

Personal training businesses need insurance because of the liability that comes with working with people on their health (e.g., diets, fitness, etc.).

Common Situations Business Insurance May Cover for a Personal Training Business

Example 1: During a client training session, a dumbbell falls on the client’s foot. He can’t work for the next two weeks and is seeking compensation for lost wages. Your general liability policy should cover any medical bills and damages awarded.

Example 2: After a personal training session, a client makes charges of improprieties and sexual misconduct on your part. Your general liability policy should cover your legal defense against these allegations.

Example 3: You often conduct training sessions in the park, and the city requires you to show proof of liability coverage. A liability policy ensures that you and your staff can smoothly conduct your sessions.

Other Types of Coverage Personal Training Businesses Need

While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all personal trainers should obtain:

Professional Liability Insurance

Also known as errors and omissions insurance (E&O), professional liability insurance is important for any professional offering advice to clients. It covers negligence claims brought on by human misunderstanding or error, offering coverage for legal fees and settlements resulting from lawsuits.

Commercial Umbrella Insurance

Commercial umbrella liability insurance offers an extension of coverage above and beyond the limits of the general liability policy. As with any physical activity, there is the risk of serious injury, which could lead to costly lawsuits. An umbrella policy would kick in and cover costs once the limits of your general liability coverage were reached.

Product Liability Insurance

As an extension of their business, many trainers sell exercise equipment and health and nutrition products. Product liability insurance offers protection should a product you sell lead to injury.

Product liability coverage is tailored to the specifics of your business and the products you sell.

Should I Start an LLC FAQ

Choosing the right business structure depends on your business’s unique circumstances and needs. However, unless your business is very low risk (like a hobby), an LLC is likely the better option.

Visit our LLC vs. Sole Proprietorship guide to learn more.

At a minimum, you’ll need general liability insurance and possibly professional liability insurance.

Read our Personal Training Business Insurance article for more info.

The cost of renting a space for a personal training business can be neglected because you will be meeting clients at their preferred locations most of the time. Aside from any specific equipment required by a particular client, you would probably be able to get going for as low as $5,000.

Visit our How to Start a Personal Training Business guide to learn more about the costs of starting and maintaining this business.

Ongoing expenses for personal training business can be kept quite low. They will include insurance costs, fuel, and equipment costs. If you have a personal training studio, costs will be significantly higher due to rent.

Learn more about running a personal training business.

Money is generated by charging clients rates for sessions. This may be paid as the relationship continues from session to session or paid upfront for a certain number of sessions in the future.

Learn more about starting a personal training business.

Whether clients are looking to reach their diet or fitness goals, personal trainers help individuals to understand and achieve their individual goals related to their personal physical health journey. Some personal trainers might create custom workout or diet plans for their clients, while others may simply help their clients to establish certain health goals in the first place.

Learn more about starting a personal training business.