Life coaching is one of the least regulated professions globally. Just like anyone can become a copywriter or designer without accredited training, being a “life coach” is a title that technically anyone can acquire. However, just like for any other business, there are a couple of general laws and legally binding terms that coaches need to keep in mind too.
Besides knowing the legal requirements for life coaching in general, it’s also important to create your own terms & conditions for your coaching sessions and website. Setting your own terms (and, of course, sticking to them) ultimately makes you a professional life coach and helps you deliver the best experience for your clients.
In this article, we’ll explore what is required to be a life coach. We’ll go through both the required and recommended steps to gain the right qualifications and set up your business.
We’ll touch upon:
- Do you need a certification to be a life coach?
- How you can register a business
- Trademark registration and other useful nuances
- Why you need insurance
- How to set the terms for your coaching contracts
- Why disclaimers are essential for coaches
Are There Legal Requirements for Life Coaching?
The short answer is no.
Anyone can become a life coach, even if they have no formal education or certified training on their portfolio. Many of the most transformative coaches in the world are changing lives every day without any formal education on their resume.
This, however, doesn’t automatically mean that anyone great at managing their own life or giving advice to their friends knows how to coach people. You need some form of training to learn the foundational coaching models and tools essential to helping people and conducting your business as a service provider.
Whether you’ve picked up your methodology and experience from past job opportunities, a coaching certification program, or other training, one thing ultimately matters: whether you can create the results your clients need.
Choosing the tools you use to create those results is completely up to you.
A coaching certification can equip you with structured frameworks and a coaching methodology that has been tried and tested. It also provides you with step-by-step processes for client acquisition and onboarding. Certification programs sometimes even include personal mentoring from experienced master coaches.
By completing a comprehensive coaching certification, you’re gaining 100+ hours of practice and training that allows you to stand in front of your first client with the confidence that says, “I know what I’m doing.”
Whether you start your coaching career with a certification, pick it up later on, or decide that you don’t need one at all is a choice you need to make yourself.
[ Read: Navigating The Coaching Industry: Do You Have To Be Licensed To Be A Life Coach?]
A Word on Ethics
Coaches are free to make up their own rules and methodology how they want to — for the most part.
But, there are certain ethical guidelines that all coaches should be aware of, regardless of whether they are into health, business, or life coaching. The International Coaching Federation has a comprehensive summary of these ethical guidelines that you can find on their website under the Code of Ethics.
So yes, you don’t need certification to be ethical and professional. You just need to do the right thing.
The Legal Requirements for Starting a Coaching Business
Registering Your Business
When you start a coaching business, you have two options. You can either run your business solo or register a company allowing you to hire a team.
You’ll have a sole proprietorship business if you provide your coaching services as a freelancer or self-employed individual. This means that you solely own the business, and you are liable for all legal aspects of it. You still have the option to register this business under another name (doing business as) in case you want to build a brand separate from your own name.
If you want to establish a company independent of you and hire employees, you must register an LLC or limited liability company. It’s a more costly option requiring more paperwork, but it allows you to expand your coaching business later. It also protects you from personal liability, meaning that if your business is sued or if it declares bankruptcy, your personal assets (including your home and vehicle) won’t be at risk. Moreover, drafting an LLC operating agreement is crucial for defining your business’s operational and ownership structure
[ Read: How to Start a Life Coaching Business in 7 Totally Achievable Steps]
You’re ready to operate as a legal business entity once you’ve registered your business name and got your tax identification number. If you want to protect any verbal or visual elements of your business from being copied or used by others, you can also consider registering one or more trademarks as your own intellectual property.
As per your business activity, you don’t need to acquire any business permit or license to work as a coach, only if you offer therapy or counseling services.
Adding Legal Disclaimers to Your Website
If you accept bookings or payments through your website, it’s best to link to your terms & conditions on your checkout page. This will practically serve as a contract between you and your client that they must accept to sign up for your services.
[ Read: Use These Terms and Conditions to Keep The Drama Out of Your Coaching Business]
A privacy policy on your website will also come in handy to inform your website visitors how their data will be used. This is relevant for all your clients who book your services or sign up for your newsletters.
With data protection laws getting stricter both in the EU and the US (such as GDPR and CCPA), you mustn’t use your visitors’ private information without their consent. Indicating how you’ll use their email ID and name before they hit sign up will protect you from future lawsuits on private data. Plus, let’s be real: no one likes to be spammed without knowing what’s coming.
Last but not least, if you have any copyrights or trademarks on your coaching name or logo, you can also indicate that on your website.
Now, the good thing is that if you manage your coaching schedule, contracts, and payments through Paperbell, you don’t have to deal with this. Your landing page, checkout page, and client data will all be set up for you and kept in one place. You can sign up with a free account and try out every feature.
What’s Legally Binding Between You and Your Clients?
Technically, everything you and your client signed in a contract.
This is why having a legally binding contract for every coaching partnership is important, even if you only coach them for half an hour. If anything goes south in your coaching relationship, this will be your primary point of reference for any disagreements or lawsuits to settle.
At the very minimum, your contract should clearly describe the services that you’re providing to your client. That means you need to specify the number and duration of your sessions, the fees your clients pay them, and what those coaching sessions actually cover.
You’d be surprised by how many people confuse coaching with consulting and therapy, so it’s also good to indicate that in your contract. Ensure you have detailed terms on the duration of your coaching partnership and the termination or cancellation policy your client must adhere to.
[ Read: How To Create A Legally Binding Coaching Contract From Scratch]
If you establish clear and open communication with your clients and respect your own terms, you should face no legal troubles in the future. And of course, we recommend using Paperbell to make sure that contract signing is an automatic part of the sign-up process for every new client.
At the very minimum, your contract should describe the services that you’re providing clearly to your client, which is a crucial step in the legal intake process. That means you need to specify the number and duration of your sessions, the fees your clients need to pay for them, and what those coaching sessions actually cover.
How to be Safe From Legal Troubles as a Coach
The best way to protect yourself against any lawsuits and life coaching legal issues is to sign up for an insurance package tailored for coaches.
There are many coach-friendly insurance companies that have packages tailored for small business owners. They typically offer a plan called a business owner’s policy or BOP, where you can customize what your business needs to be insured against.
The most common part of a BOP would be Professional Liability Insurance. This insurance protects you as a coach (or your coaching business as an LLC) from any accusations of negligently performing your services.
You can also apply for:
- General Liability Insurance against general claims on damage to property or personal injury;
- Commercial Property & Auto Insurance to secure your business assets, such as your office and car;
- Cyber Liability Insurance against any data leak regarding private client information;
- And Workers Compensation Insurance in case you have employees to pay.
Your life coach insurance will also cover any costs of hiring a lawyer if you get into trouble, which can easily come up to thousands of dollars, if not more.
Bottom line: Better safe than sorry!
FAQ
Do You Need a License to Start a Coaching Business?
No, you don’t need any business permit or license to start a coaching business. You do need one, however, if you work as a therapist or counselor.
Do You Need to be Certified to Become a Coach?
No, you can run a coaching business without any formal education. A certification simply provides you with the knowledge, framework, and mentoring that can enhance your qualifications for the job. It’s completely optional.
That said, the coaching industry has become extremely diluted over the past few years. Fresh-out-of-college life coaches go viral on TikTok, and many people in 9-to-5 jobs have thrown in the towel to start a more meaningful career. And while it’s great that actively working on one’s life has become more mainstream, it has also made it a tad harder to stand out and prove your qualifications as a coach. Earning a certification can give you that edge and help you pick up new skills to conduct even more powerful sessions.
Do You Need to Register Your Coaching Business?
Yes, any business activities you run should be registered as either a sole proprietorship or an LLC.
Is it Legal to Call Yourself a Coach Without Any Qualifications?
Yes, anyone can become a coach and start offering coaching services regardless of their qualifications.
Do I Need a Contract to Coach Someone?
It’s not a legal requirement, but you should absolutely only coach with a contract, to set clear expectations with your clients. At the minimum, your contract should describe the services you offer (or don’t offer) as well as your cancellation policy and payment terms.
It’s Time to Get Your Coaching Business Running
Now that we’ve sorted the legal requirements for life coaching, you can focus on setting up your business. Besides making your business legal, you should make it as efficient as possible so you’ll have more energy to spend on your clients.
The best way to automate all your client management duties is with a tool like Paperbell. This all-in-one client management system handles your contracts, payments, bookings, and all the other nitty-gritty tasks of keeping your coaching business in order. Create a free account to test out Paperbell, and thank us later for the hours saved in your schedule.
Editor’s Note: This post was originally published in September 2021 and has since been updated for accuracy.
