LLC or sole proprietor

[Justin Gross]

When training out of your garage, do you have a llc or a sole proprietor?

[Sean Dunston]

Justin-
What type of protection are you looking for?
A sole proprietorship gives you none.
An LLC limits your liability (as the name implies) to a certain extent.
Corporations give you some personal liability protection as well.

This is not legal advice, and I am not licensed in California... but I would GUESS that if you are training people out of your garage, attempting to limit your liability might be a losing endeavor because if a person were to get injured there, s/he would be able to sue you under other theories of liability beyond the scope of your training waiver... Think about it - it is your house... you invited a person over and s/he got injured on your premises. Any PI attorney worth his salt is going to find a way to get through the LLC (or corporation - or whatever) and attach the house.

I don't mean to be a downer - but that is definitely a risk of training people from your home.

Also - for LLCs in California, I understand that there is an annual tax on receipts of some kind that may be rather costly if you end up earning a decent amount of money through the business.

So - IMHO - of the two you suggest, I would think a sole proprietorship would suffice, given the above potential issues. But there are a lot of different things to consider when choosing a form of entity for your business. I would talk to a professional in your area to discuss the options (especially certain options that you may not have already considered). Remember - you get what you pay for.

Perhaps more learned members (and those situated in california) will chime in for you.

All the best-

Sean

[Chris Drewry]

I am a sole proprietor.

As Sean stated... due tot he fact that they are in your house, it nulls the liability protection of an LLC.

Once we move out of the garage I will be forming an LLC

[Damon Stewart]

This is a complex question in some ways and extremely simple in others. I'd google it, everything you can think of has probably been asked there.

[Ray Anderson]

Justin,

We own & operate here in California (CROSSFIT MURRIETA) We are an S-Corp.(ELITE FITNESS COMPLEX, INC.) Crossfit is one of three components that we have (Sports Performance Training / Personal Training / CrossFit).
We currently operate out of our home & are covered by two insurance companies. One for our home & one for our business. It covers the gray area of a client who parks his/her car in front of our home & who happens to slip & fall on the way up our driveway/sidewalk. It wasn't easy to find, but once we did it's worked out well for us.

Any questions, feel free to call or e-mail us. OFFICE# (951) 698-1558
e-mail: elitefitness@peoplepc.com

Ray Anderson
ELITE FITNESS COMPLEX, INC. / CROSSFIT MURRIETA

[Justin Gross]

Thanks for the responses. My deal is that I rent a house, and over the last few years I put together a decent XF gym in the garage. During that time I also learned how much I love training people. I'm getting ACE certified asap and will get things rolling then, in May I'll be attend the XF cert in SD. I've been taking groups of friends out for field classes, but come spring the parks and beaches will get extremely crowded, and in summer, too hot for some.

I understand that there is a worst case scenario, but at the same time there appear to be lots of people who train out of their garages. I just want to figure out what resources I have. It will be a while before I could afford to get a box.