What is Aira Fitness's intended corporate tax structure?
Aira_Fitness Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company, with the consent of its shareholders, intends to elect to be an S-Corporation (for tax purposes). In lieu of corporate income taxes, the shareholder(s) of an S-Corporation is taxed based on its proportionate share of The Company's taxable income. Therefore, no provision or liability for income taxes has been included in these financial statements.
Source: Item 23 — **RECEIPTS (FDD pages 59–254)
What This Means (2025 FDD)
According to Aira Fitness's 2025 Franchise Disclosure Document, the company intends to elect to be taxed as an S-Corporation, with the consent of its shareholders. This means that Aira Fitness itself will not be subject to corporate income taxes. Instead, the shareholders will be responsible for paying income taxes based on their proportionate share of the company's taxable income. The financial statements, therefore, do not include any provision or liability for income taxes at the corporate level.
For a prospective Aira Fitness franchisee, this information is relevant because it clarifies that the financial statements provided do not reflect corporate income tax liabilities. Understanding the tax structure of the parent company can provide insight into how profits and losses are distributed and taxed, which may indirectly affect the franchise system's financial health and stability.
It is important for potential franchisees to consult with their own financial and legal advisors to understand the full implications of Aira Fitness's tax structure and how it might affect their individual tax liabilities as shareholders or owners of a franchise. This information is typically found in the notes to the financial statements within the FDD.