Responsibilities & legal structure

This is the most consequential founder-alignment decision in the plan. Who owns what — and how trainers are classified as we scale — determines the venture's legal exposure, its economics, and the trust between the two of us.

Who owns what

The split below is the working division of responsibility. It is deliberately clean: each lane has one accountable owner.

The phase-aware NJ ABC classification

How trainers are classified is not fixed — it shifts with the phase, because New Jersey's ABC test treats different arrangements differently. The honest position is that the defensible structure changes as we grow:

Phase 1 — the partner as co-owner / principal

The Phase-1 partner is a co-owner / principal of the venture, not a worker performing services for it. They are not subject to the ABC test on their own venture — this is the one clean lane, free of classification risk.

Phase 1–2 — the genuinely-independent bench trainer (a narrow 1099 lane)

A genuinely-independent bench trainer in Phases 1–2 can occupy a narrow, monitored 1099 lane. It is defensible only for a trainer running their own independent practice — own rates, own hours, with the venture's overflow as one of several income streams. That arrangement satisfies prongs A and C of the ABC test. But the lane erodes the moment the venture exerts roster control — setting the trainer's schedule, rates, or supplying their clients.

Phase 3 — the managed roster as W-2 employees

A Phase-3 managed roster must be W-2 employees. New Jersey's ABC test makes a managed-roster 1099 indefensible:

• Prong B fails on the "usual course of business" disjunct: a training venture's managed trainers are performing the venture's usual course of business, not a service outside it.
• The in-home-only structure does not rescue it via the "places of business" disjunct. New Jersey's adopted regulations and controlling case law — Carpet Remnant Warehouse (1991) and East Bay Drywall (2022) — construe a client's home as the enterprise's place of business when the service performed there is integral. The Supreme Court's own example of a drywaller working at a customer's home is the identical fact pattern.
• Prong A (the venture sets standards and scheduling and supplies clients) and prong C (a trainer working exclusively through the venture has no independently-established trade) each independently defeat 1099.

As we scale from partner-anchored to a managed roster, trainers convert from a defensible owner/independent-bench arrangement to W-2 employees, because NJ's ABC test — including the client's-home-is-a-place-of-business rule — makes a managed-roster 1099 structure indefensible.