Legal Hypothetical - Opening a Gym (Not Really Going to Happen)

[alfred russel]

Is the idea that you are willing to expose yourself to unlimited tort liability but you want to protect Dad?

Yes.

[MadImmortalMan]

I wish I had relatives who could afford to drop a hundred large on an option in one of my businesses. Alas, I grew up in the Hillbilly Elegy.

I would generally not conflate the activity of the company and the performance of the assets. IE--the income from the real estate ownership should usually be something like a percentage of the gross outlay and not a share of the business income. In other words, your dad would make a profit even if you don't.

That also means that he wouldn't have a claim on your windfalls if you suddenly hit a streak of eh..wall-climbing fad cash.

My wife's sister is in this business, and man it's not easy. Her ex boyfriend started a gym something like this and she put her life savings in it. Then they broke up a couple years later. He used her money to get all the gym's equipment and everything, but she doesn't want to have liability for the debts he signs up for in the future. So they split the company into two. One to own the assets and the other for him to operate under. Presumably, he can run the company into the ground, and she'll still get to keep all the tractor wheels and climbing ropes and stuff.