Legal Requirements for your Yoga Business

Yoga class. Credit logan-weaver-lgnwvr-XKhHkbAFyPs-unsplash

Running a yoga business requires more than just teaching skills. The right legal foundation is essential too. Ensure you protect yourself against fallouts from employment disputes and financial loss should your business fold. Whether you go solo or join with a friend, it is essential to be familiar with all legal aspects. With that assurance, you can safely grow your business while focusing on the most important factor – the client’s well-being.

1. Choosing your business structure

In the UK, you have two main options when starting a yoga business. A popular choice is setting up as a sole trader, where you’re in charge of everything. It’s easier to manage, and you get to make all the decisions. However, you’re also personally liable for any debts or legal claims made against you.

On the other hand, if you set up a limited company, your personal and business finances stay separate. You’ll be considered an employee, which gives you more flexibility in how you earn and how your taxes work. That said, running a limited company is more complex and can be costly. If you have partners, it could lead to conflicts. A partnership is a more straightforward alternative.

Once you’ve chosen your business structure, take care of the financial side. As a sole trader, you’ll need to register for self-assessment with HMRC. If you go for a limited company, you’ll need to go for corporation tax and VAT. Hiring an accountant early on and keeping clear records could save you a lot of headaches in the future.

2. Selecting appropriate insurance

Although not required by law, having public liability insurance can provide vital financial protection should a claim be made against you. Even the most experienced instructor can face unexpected damage to property or a student injury during class. Legal battles can be costly – not to mention damaging to your reputation. You could also consider well-being insurance for yoga practitioners for tailored protection and benefits.

If you hire staff, even as a sole trader (which is different from being self-employed), you’ll need the employer’s liability insurance. This is a legal must-have.

3. Creating employee contracts

In the UK, employment law requires you to provide a written contract by or before your employee’s first working day. Failing to provide a proper contract could lead to disputes or expensive tribunal claims. A written statement of employment particulars should include:

  • Job title and/or description
  • Length of the contract and any notice period
  • How much and how often the employee will be paid
  • Working hours and whether they vary
  • Where the employee will be working
  • Holiday entitlement and other benefits

If you hire freelancers instead of employees, their contracts should reflect their self-employed status. Otherwise, HMRC may classify them as employees, which would mean you’d have to meet additional obligations like holiday pay and pension contributions.

4. Getting premises/lease agreements

Once you’ve secured a place to work, get a copy of the lease agreement and review it carefully to understand your legal obligations – from rent payments to repairs. Remember, unlike residential leases, commercial leases are negotiable. If you’re setting up in a new area, try to get flexible terms for subletting or ending the lease early, just in case your business needs to change.

If you’re unsure about anything, it’s worth hiring a solicitor to review the lease and ensure you’re not taking on unreasonable costs. You’ll also need to consider business rates, which apply to most commercial properties, though you may be eligible for small business rate relief, which can save you money.

Operating from home? Don’t forget to check whether you need planning permission to run classes.