Do you have an LLC or Corporation (Inc)? If not, stop reading and go file for one.
A Limited Liability Company (LLC) is the most basic form of a company. It is the easiest to set up and run. Any beginner can do it. A corporation is similar, but a little more challenging. The purpose of filing for an LLC with your state government is to provide you ”limited liability.”
It surprises us each time we talk with a gym owner who has an LLC, but isn’t using it. For example, they have an LLC, but the commercial lease is in their name. Or, they have an LLC, but they are still using a personal bank account. Even worse, they have an LLC, they are operating the gym under a fictitious name, and the commercial insurance policy is in the name of the individual owner.
When you file for an LLC, plan to use it. Otherwise, it isn’t providing you any limited liability protection. Put another way, you personal assets are still exposed. Therefore, if the worst happens, and a member sues your gym, you are personally liable. Or, if the commercial lease is in your name, and you breach the lease, your personal assets (like your bank account) is on the hook.
The point of the LLC is so you can keep the hard earned money you’ve made. Don’t be afraid to use it. Don’t sign any legal contracts on your own behalf. If someone hands you a legal contract for your gym, and it names you as an individual, don’t sign. Demand that they change the ”party” of the contract to be your LLC.
If this is still confusing, or if you have any questions, please reach out.