When you’re building your business—whether you’re a fitness entrepreneur, content creator, or product-based founder—one of the most important (yet confusing) decisions you’ll make early on is how to structure your business.
Should you be a Sole Proprietor?
An LLC? Should you elect S-Corp status?
Or should you go write into being a C-corp?
Your choice can impact your taxes, your liability, and how much money ends up in your pocket.
Let’s break it down in simple terms so you can make the best decision based on where your business is today—and where intend to take it in the future. (because we all know you have big dreams you are chasing!!!)
Sole Proprietorship: The Simplest Start
What it is:
A sole proprietorship is the default structure when you start earning money and haven’t formed a legal entity.
Pros:
- Super simple to set up (you technically don’t need to do anything to start).
- Minimal cost and paperwork.
- Great for side hustlers and brand-new entrepreneurs testing the waters.
Cons:
- No legal separation between you and your business.
- That means your personal assets (home, car, savings) are at risk if your business is sued or goes into debt.
- You pay self-employment taxes (15.3%) on 100% of your profits.
Bottom Line:
Sole Props are fine for getting started, but as your income grows, they offer zero liability protection and no real tax planning opportunities.
LLC: Legal Protection & Flexibility
What it is:
A Limited Liability Company (LLC) creates a legal separation between you and your business. It’s like putting a safety bubble around your personal assets.
Pros:
- Protects your personal assets from business liabilities.
- Gives you flexibility in how you’re taxed (you can stay taxed as a Sole Prop or choose to be taxed as an S-Corp).
- Adds credibility to your brand.
- Relatively easy to set up and maintain (especially if we do it for you).
Cons:
- You still pay self-employment taxes on all profits if you don’t elect S-Corp status.
- Slightly more paperwork and cost upfront compared to a Sole Prop.
Bottom Line:
This is the most popular starting point for fitness pros and creators. You get protection and can layer in tax benefits later without needing to set up a whole new business.
S-Corporation: Tax Savings (If You’re Earning Enough)
What it is:
An S-Corp is not a type of business entity—it’s a tax election you make once you’ve formed an LLC (or a corporation). It allows you to split how you pay yourself between a reasonable salary and profit distributions.
Pros:
- Huge tax-saving potential once your net income exceeds $50,000+ per year.
- Instead of paying 15.3% self-employment tax on everything, you pay it only on your salary.
- Profit distributions are not subject to self-employment tax.
Cons:
- You’re required to run payroll and file extra tax forms.
- Higher admin and bookkeeping complexity (but that’s what we’re here for).
- You must pay yourself a “reasonable salary,” which the IRS watches closely.
Bottom Line:
When your business is consistently netting $50k+ per year, talk to your accountant about switching your LLC to an S-Corp. It’s one of the most powerful (and IRS-compliant) tax-saving moves available.
Pro Tip from J&S Accounting:
A lot of our clients in the fitness, content, and creator economy space start with an LLC and switch to an S-Corp once their net income consistently exceeds $50K. It’s the sweet spot where tax strategy becomes a game-changer.
We help you not only choose the right structure—but also evolve it as your business scales. From new business formation to bookkeeping, payroll, and CFO-level strategy, our goal is to make sure you sweat your workouts, not your taxes.
C-Corporation: Built for Scale (But Not Always Needed Early On)
What it is:
A C-Corporation (C-Corp) is a legal entity completely separate from its owners. It’s the standard corporation type in the U.S. and is often used by startups planning to raise money from investors or issue shares.
Pros:
- Strong legal protection for owners and shareholders.
- Can issue multiple classes of stock, which is a must for raising venture capital.
- Easier to attract investors and scale with a traditional corporate structure.
- Can retain earnings in the business (instead of distributing everything to owners).
- Potential tax benefits for reinvesting profits into growth.
Cons:
- Subject to double taxation: the company pays taxes on profits, and then shareholders pay taxes again on dividends.
- More complex compliance and record-keeping requirements.
- Generally unnecessary unless you’re raising capital or planning to scale aggressively.
Bottom Line:
C-Corps are a fit for businesses looking to raise funds, go public, or build a corporate team. If you’re a solo creator, fitness entrepreneur, or small service-based business, a C-Corp is usually overkill. But for the right kind of business model, it offers unmatched growth potential and credibility.
Quick Comparison Chart
| Structure | Liability Protection | Tax Complexity | Best For |
| Sole Prop | ❌ None | ✅ Very Low | Brand new business, side hustlers |
| LLC | ✅ Yes | ✅ Low | Small business owners, service pros |
| S-Corp (LLC) | ✅ Yes | ⚠️ Moderate | Profitable businesses (>$50k/year) |
| C-Corp | ✅ Yes | 🔥 High | Startups, fundraising, equity plans |
Want to set up your LLC or make the S-Corp switch?
We offer a one-time business formation package for just $595, which includes:
- LLC creation & state filing
- IRS EIN registration
- Beneficial Ownership filing
Or, if you’re ready to go all-in with monthly support, check out our Basic, Pro, and Elite packages tailored to businesses at every stage.
Let’s build your financial foundation the right way.
If you want expert eyes on your tax strategy or need help setting up systems that make tracking easier, our team at J&S Accounting is here to help.Fill out an intro questionnaire, we can chat on an intro call, and let’s make sure your fitness business is financially fit too.