Type of Business 

Sole Proprietorship

Best for: New health coaches, low-risk businesses, solo operations.
📌 Key Features:

• Easiest and cheapest to set up.

• The coach and the business are legally the same entity.

• Profits and losses are reported on the owner’s personal tax return.

• No legal separation = personal assets are at risk if sued.
  💡 Good choice if you are just starting out and testing the waters.

Limited Liability Company (LLC)

Best for: Coaches who want liability protection while keeping things simple.
📌 Key Features:

• Protects personal assets from business liabilities.

• More credibility than a sole proprietorship.

• Can be taxed as a sole proprietorship or S-corp.

• Requires filing with the state and may have annual fees.
  💡 Good choice if you want to grow your business and limit personal liability.

S Corporation (S-Corp)

Best for: Coaches making over ~$50,000+ in profit and wanting tax advantages.
📌 Key Features:

• Reduces self-employment taxes (you pay yourself a salary, and the rest of the profits are taxed at a lower rate).

• Requires payroll and stricter record-keeping.

• More paperwork and regulations than an LLC.
  💡 Good choice if you are making a consistent income and want tax savings.

C Corporation (C-Corp)

Best for: Large-scale wellness brands, product-based businesses, or companies seeking investors.
📌 Key Features:

• A completely separate entity from the owner.

• Can raise money from investors and issue shares.

• Subject to double taxation (corporate and personal income tax).
  💡 Not necessary for most solo health coaches, but useful if you plan to scale big.

Partnership (General or Limited)

Best for: Two or more health coaches working together.
📌 Key Features:

• A general partnership means both partners are equally liable.

• A limited partnership (LP) allows one partner to have limited liability.

• Profits are shared and taxed at individual rates.
  💡 Good choice if you are co-founding a coaching business with someone else.

Which One Should You Choose?

✔ If you’re just starting out and testing the business → Sole Proprietorship
✔ If you want liability protection and flexibility → LLC (most common for health coaches)
✔ If you’re making over ~$50K profit and want tax savings → S-Corp (or LLC taxed as S-Corp)
✔ If you’re growing a big brand and want investors → C-Corp
✔ If you’re partnering with someone else → Partnership or LLC

I worked as a Sole Proprietor until I knew I was definitely going to keep running a business and then I switched to a LLC.  There are many companies that can help you with this but I found it to be a super simple process to do myself.  Here are the steps I took: 

• Looked up How to Start a LLC in Virginia 

• Found the webpage that had the step by step directions 

• Filled out the online application 

NOTE: Part of this process did have me request a EIN, but I could have opted to use my social security number.  I also did use a local registered agent office which is $50 a year to be able to accept legal documents on my behalf because the LLC required you to have someone always available.