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What Licenses Does A Gym Need?

What Licenses Does A Gym Need?

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What Licenses Does A Gym Need?

Starting a successful gym business takes more than knowing how to help people get in shape. Starting a new business requires completing several steps, and obtaining licensing is an important one as it may impact your ability to operate legally.

If you also plan to offer personal training services, be sure to research those requirements as well.

The question, “what business license do I need to start my gym” is a common one, but challenging to answer as the regulations in every location is different. Your business will likely need multiple licenses, permits, and registrations from federal, state, and local agencies.

Let’s look at which licenses to consider when starting a gym.

Related: Guide to starting a gym

While we have researched what licenses and permits your business may need, please be aware that there is no way for us to have uncovered every state and local requirement.

To not miss any important licenses and permits, we recommend also checking with your local Chamber of Commerce, economic development agency, or use a business license service like Incfile or LegalZoom.

What Licenses Do You Need to Start a Gym?

State Licensing

It’s important to realize each state defines what a gym, health club, or fitness facility can do. Researching the correct terminology is essential, getting the correct licenses.  Perhaps the most surprising regulations for your gym will revolve around membership contracts and fees that can be charged.

In the state of Washington, for instance, most health clubs are required to allow customers to cancel memberships at any time and for any reason. This presents challenges for profitability as many people sign up for a year-long contract as a part of their New Year’s resolutions but only use the gym for a month or so.

Gyms in Illinois are required to limit the length and cost of memberships. Additionally, there must be at least one person who holds a valid certificate in CPR during staffed business hours.

Under Florida’s Health Studio Act, health studios are required to register with the Florida Department of Agriculture and Consumer Services (FDACS). There are regulations around the types of memberships sold and requirements for communications with customers.

In Wisconsin, the Department of Agriculture, Trade and Consumer Protection enforces fitness centers and weight reduction centers.

In addition to licensing for a gym/fitness center, special licensing may be needed if personal trainer services are offered.

Each state has different requirements, so it’s important to research the laws in your state before starting.

Local Licensing

In some locations, licensing or regulations may be required at the state level, in addition to the local level.

For instance, in Chicago, Illinois, health clubs and fitness centers are required to register with the city. One requirement for this license includes having off-street parking for members.

Health clubs and gyms in New York City must obtain a Special Permit from the NYC Board of Standards and Appeals to operate.

In Santa Monica, California, health clubs must follow certain requirements, particularly around the property and parking.

There are several licensing requirements for starting a gym at the federal, state, and local levels.  While licensing requirements vary by location, there are also a few common business licenses and permits all businesses may need:

One of the first registrations to do when starting a business is selecting a legal structure. A legal structure refers to how a business is organized to operate. The four main types include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC).

Each type of entity has different pros and cons, from protecting the owner’s personal assets, cost to form, and administrative requirements.

Related: What is the difference between a sole proprietorship, partnership, corporation, or LLC?

Business Name Registration

While not necessarily a business license, it’s worth noting that to use a name for a business, many states require the registration of that name. Making matters more complicated, the process of name registration is different by state and the type of business entity.

For instance, sole proprietorships and partnerships generally need to register a business name (also referred to as a Doing Business As, DBA, fictitious business name, trade name, or assumed name).

Learn: How to register a DBA

Corporations and LLCs register are a little easier because the name is registered when the entity is formed with the state.

General Business License or Permit

Depending on where the business is located, a general business license or permit may be required. A few states require a business license; however, they are more commonly found at the city level.

Learn more: Business license requirements by state

Federal Employer Identification Number

The Federal Employer Identification Number (also referred to as a FEIN, Employer Identification Number, EIN, or Federal Tax ID Number) is a unique nine-digit number that identifies a business with the Internal Revenue Service (IRS).

Any business with employees or those that form as a partnership, Corporation, and in many cases an LLC, the business will need to get an EIN.

Sole proprietors and single-owner LLCs without employees can instead use the owner’s social security number.

The FEIN or owner’s social security number is used to open a business bank account, apply for a credit card or hire employees.

Learn: How to get an EIN 

Sales Tax Permit or Business Number

In order to sell products and/or offer certain services, a state sales tax permit (also referred to as a sales tax registration, business tax number, or tax ID number) may be needed.  This permit creates an account number with the state’s Department of Revenue (or similarly named state taxing agency) to collect and remit sales tax.

Learn: How to get a sales tax permit in each state

Resale Certificate

When buying inventory that is being resold to customers, such as apparel, supplements, and other items, the business can purchase these items tax-free. A resale certificate (sometimes referred to as a seller’s permit) allows a business to purchase inventory, and instead of paying the sales tax to their vendor, they charge the sales tax to the end-user of the product.

A resale certificate only allows a business to not pay sales tax for items being resold, and sales tax will still need to be paid for supplies or equipment.

Learn: How to get a resale certificate

Certificate of Occupancy

In most communities, a gym will likely need to secure a Certificate of Occupancy (CO) before operating in a commercial building.  This certificate is typically obtained from the city and/or the county and allows a business to occupy and operate from a building. Before the certificate is issued, the building will need to comply with zoning regulations, building codes, and any other local requirements.

If the gym will be operated as a home-based business, a home occupation permit may be required.

Before deciding to purchase or rent a location for your gym, be sure to check with the local zoning department first to ensure the business can legally operate out of the chosen location.

Music License

If you plan to play music in the gym, whether it’s live, recorded, or streamed, a Public Performance License (PPL) will be needed. A blanket license can be obtained through the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music Inc. (BMI), and the Society of European Stage Authors and Composers (SESAC).

Fines from playing unlicensed music can be pretty high, so be sure to get the licensing before playing in your facility.

Certifications

While not a license, obtaining certifications may be important in demonstrating your gym’s credibility and being able to charge more. The American Council on Exercise (ACE), National Academy of Sports Medicine (NASM), International Sports Sciences Association (ISSA), American College of Sports Medicine (ACSM), and National Strength and Conditioning Association (NSCA) have certification and business certifications and business courses.

The process of identifying all the licenses and permits necessary to start a gym may feel confusing and overwhelming, but it is critical to get the proper paperwork filled out so you can open without breaking a sweat!

These are some of the most common business licenses, but there may be specific licensing that isn't listed. Before starting your business, be sure to check with the City Clerk, County Clerk, Chamber of Commerce, and/or Economic Developer in your area to get more information regarding business licensing.

For some additional peace of mind, companies like Incfile or Legalzoom can do the research and ensure you have all of the proper federal, state, and local licenses to start your business.

What Licenses Does A Gym Need?

What Licenses Does A Gym Need?

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