In this video, you get answers to these questions:
- Would sports and fitness trainers benefit from an LLC?
- Does an LLC limit the liability of the person doing the work?
- How would an LLC limit your liability as a trainer?
- When is an LLC helpful?
- What else should you consider when deciding between an LLC and an S-corp?
- Does an LLC limit the liability of your own acts and the injuries that occur should you be negligent as a trainer?
Would sports and fitness trainers benefit from an LLC? That’s the question I’m answering today. I’m Aaron Hall, a business attorney in Minnesota. Treadstone0132 left a comment on YouTube. It says, “Would sports trainers or fitness trainers working for themselves benefit more from an LLC? For example, training for track and field. It’s possible that an athlete can be injured during training. Would an LLC protect me being that I work alone? I do appreciate the info and will greatly appreciate your feedback. This is the best type of information, the useful type. Thanks.” Well Treadstone, thank you for the question. I have to give everybody a disclaimer. I do these educational videos so that you can spot issues and talk with your attorney, not as a replacement for an attorney, but let me help you understand how to look at this issue and figure out would an LLC makes sense.
So an LLC, or a corporation, limits your liability as a shareholder, but it doesn’t limit your liability as the person doing work. So if you’re a trainer and you’re doing work and you’re negligent, you’re going to be liable for that. How would it limit your liability? Well, let’s say for example, you had an LLC and that LLC entered into a contract. You didn’t personally guarantee it. Just the LLC entered the contract, maybe it’s to rent some equipment. And then the LLC breached that agreement due to no fault of your own. There you’d have limited liability. Or let’s say, for example, your LLC hired another fitness trainer and they were negligent. There, you wouldn’t personally be liable. But in a scenario where you’re actually personally providing that service, if it’s determined that you are personally negligent as a fitness trainer, then an LLC isn’t going to help you because you’re the one that provided the service. You are personally going to be liable.
Now that is dealing with the issue of limited liability and whether an LLC or corporation would help you. The other analysis is tax. An S corporation can save money on taxes. As a rule of thumb, that’s typically when you have substantially over $50,000 in profit in a year. I have another video on figuring that issue out. So in just as a rule of thumb, I think, for a fitness trainer, who’s working on their own and is concerned about limiting their liability for the services they provide, I don’t think an LLC is going to help you that much. Again, if you’re going to get taxed as an S corp, there might be a tax benefit, but an LLC is not really limiting your liability for your own acts and the injuries that could occur should you be negligent as a trainer. If you find this video helpful and you’re interested in other educational videos, feel free to subscribe. And you’re welcome to leave questions and comments down below. I’m Aaron Hall, a business attorney in Minnesota.