Complying with government licensing and permit requirements is a very important factor in running a business. In the United States, we have Federal, State and sometimes even local governments that regulate and ask to license certain types of businesses.
It is important to know that not all business are considered the same. A restaurant needs different licenses and have more compliance requirements than a coaching business would.
Life Coaching and Health Coaching business are growing in popularity, however are still considered fairly new industries and not many regulations or compliance requirements are out there for health and life coaches yet. In fact, one of the advantages of being a life, health or business coach operating your business from home or online, without having a physical office, is that you do not have to be subject to all sorts of regulations from the local Health Department, especially when it’s about dealing with food and nutrition.
In many states and probably different countries, you have to be very careful when giving nutritional advice. In many places, you have to have a nutritionist license, or be a registered dietitian in order to tell people what they can or cannot eat.
In Florida for example, this used to be the case until a few years ago when the law was modified with a long list of exceptions. In Florida, you may now offer coaching services, courses, webinars and seminars, in person or online, about life, nutrition, business or fitness without having to be a nutritionist nor a dietitian, nor a fitness professional. You can just be a certified coach. The differentiation here has to do with medical nutrition such as managing someone’s diabetes or other serious medical condition. Only a licensed nutritionist or registered dietician can provide nutritional counseling as part of a medical treatment program. Certified Nutrition and Health Coaches can share recipes, hold support groups, can provide exercise classes or cooking classes, helping people to make healthy lifestyle changes.
The only things that you clearly cannot do is to diagnose a client and/or provide a medical treatment plan.
I am saying this to emphasize that it is very important to check with your local agencies and see what the rules in your state or your country are and be sure to follow those guidelines when teaching your students.
When registering your business in the United States, as a sole proprietor or a partner in a partnership, you are normally not required to file any licensing paperwork. You can actively exist and coach however, all your profits or losses will be considered as individual income and taxed accordingly.
If you have another type of business entity like an LLC or a corporation, those must be registered with the state department, in your particular state. We created a list of the regulatory authorities responsible for licensing and registration requirements for LLCs and Corporation, for each of the 50 states and Puerto Rico. Please keep in mind that rule and regulations change all the time and advise your students as well, to double check everything before starting the registration process.
In Florida for example, we have sunbiz.org which is the website of the State Division of Corporations, where businesses have to be registered. In Florida, a business does not exist in the eyes of the Division of Corporations, if it’s not listed as active or inactive, on the division’s website. Active means that the business has paid the annual fee in order to operate in the state. Inactive means that the business is not up to date with the appropriate documentation or in making the required payments, and therefore should not be operating until the documents are filed and/or payments are made. Once a business is compliant the status will return to Active. Being on the business list means that the business has been formed and active at some point in time. Once a business is registered with the state, it is public information so if you click on the business name itself, you can see if and when the last time was that the business operated legally in the state.
In the US, you have to register your business at a state level and for mostes business you will also have to register the company at the federal level. If you live in a big city that has a city tax, you will probably be required to get a local city or county license as well.
Let’s talk about the federal requirements.
- When you register a business at a federal level you receive a federal ID number.
- Why is this important? It’s important for tax purposes when you file federal taxes at the end of the year. You cannot file federal taxes without this EIN number.
- An EIN is also important because you cannot open a business bank account without this number. The EIN is like the social security number, or the identification number for your newly formed entity and the bank needs it to report to various government agencies and credit agencies. When you open a corporation or an LLC it’s much like a baby being assigned a social security number when the birth certificate is filed. Just like a newborn, your business baby is getting a federal ID number.
So, these are details pertaining to the US and specifically Florida, however each state has similar requirements, some may have even more. Please feel free to use the list we provided, however also do your homework and see what the best options for you are to operate legally in your state and country as well.
In addition to your jurisdictions primary authority for business registration, here is a list of a few associations and agencies that you can check on as well in your area.
- Trade associations in your industry in your area, where existing members can share histories and offer advice and information about regulation, taxes, insurance, etc.
- There are also other peers in your field that you can reach out to and ask questions. Those who have been where you are and have already done most of the hard work and with whom you might want to develop a relationship with. A book can teach you a lot, however you can learn more practical applications from experienced people in your field.
- There are also state and federal agencies like the Small Business Administration in the US which oversee corporations and small businesses. Here you might have to deal with bureaucracy at some level, but it’s worth mentioning them as a source of information for you. Due to the COVID-19 pandemic, many of these agencies can now be reached through email, online chat with a representative, or give them a call.
- There are also other relevant sources for you to use: local government agencies, local tax collectors’ offices, trade publications, the local Chamber of Commerce, Small Business Development Centers in your area, business coaches Etc.
So, keep in mind that you are not alone and there is plenty of support available to you out there.
I always try to get at least 2 or 3 answers from different sources, to each question as questions arise in the course of developing my business. That way, I can verify my sources and see which one is reliable and which I can use again in the future. Please advise your clients who are looking to start their own businesses to do the same.
Author: Sanda Kruger
Sanda is an entrepreneur, real estate investor, health coach and professional dancer. Sanda is an entrepreneur with more than 20-year experience in business development and project management in the fields of life, health and fitness coaching. She is also a real estate investor and a banker, who learned outstanding adapted business strategies, sales and marketing techniques, communication, and goal setting skills, hands-on, through life and work experiences. She is a certified fitness professional and is the creator of two original fitness programs, called BellyCore® Fitness and AquaCor®.