legal requirements for life coaching

What Makes a Life Coaching Business Legal?

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 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, following them) is what ultimately makes you a professional life coach and what helps you deliver the best experience for your clients.

In this article, we’re going to explore the required and recommended steps you can take to gain qualifications, set up your business, set terms for your partnerships, and protect yourself from any legal trouble as a life coach.

What are the Legal Requirements for Life Coaching?

The short answer to that is: None.

Anyone can become a life coach, even if they have no formal education or certified training on their portfolio. Many of the most transformative and successful coaches of the world are changing lives every day, yet they never even took an online course on how to coach people.

This, however, doesn’t mean that anyone who’s great at driving their own life or giving advice to their friends can become a life coach. Whether you’ve picked up your methodology and perspective on life from your past careers, traveling, personal growth programs, or coaching training, there’s only one thing that matters: whether you can create the results that your clients need.

Choosing the tools you use to create those results is completely up to you.

What a coaching certification can do for you, is to 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 your client acquisition and onboarding. In some cases, it even includes 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 of “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 have the freedom to make up their own rules and methodology the way they want to.

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 Code of Ethics.

So yes, you don’t need to be certified to be ethical and professional. You just need to do the right thing.

Registering Your Business

When you start a coaching business, you have two options. You can either run your business solo or register a company that also allows you to hire a team.

If you provide your coaching services as a freelancer or self-employed individual, you’ll have a business called sole proprietorship. This means that the business is solely owned by you and you are liable for all legal aspects of it. You still have an option to register this business under another name (doing business as) in case you want to build a coaching website or a brand separate from your own name.

If you want to establish a company independent from you and hire employees, you’ll need to register an LLC or limited liability company. It’s a more costly option that also requires more paperwork, but it allows you to expand your coaching business later on. It also protects you from personal liability, so if your business is sued or if it declares bankruptcy, your personal assets, including your home and vehicle, won’t be at risk.

[ Read: How to Start a Life Coaching Business in 7 Totally Achievable Steps]

Once you’ve registered your business name and got your tax identification number, you’re ready to operate as a legal business entity. 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’re offering services in therapy or counseling.

Adding Legal Disclaimers to Your Website

If you’re accepting bookings or payments through your website, it’s best to include your terms & conditions on your checkout page. This will practically serve as a contract between you and your client, that they automatically accept by signing up for your services.

[ Read: Use These Terms and Conditions to Keep The Drama Out of Your Coaching Business]

Ideally, you should also share a privacy policy on your website, to inform your website visitors how their data would be used. This is not a step that’s absolutely necessary but it’s a simple disclaimer that will protect you from any lawsuits on private data in the future.

Last but not least, if you have any copyrights on your trademarked coaching terms or your 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 any of this. 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 it’s important to have a legally binding contract for every coaching partnership, 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 describe the services that you’re providing clearly to your client. 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. You’d be surprised how many people confuse coaching with consulting and therapy so it’s good to indicate that in your contract as well. Make sure you have detailed terms on the duration of your coaching partnership and the termination or cancellation policy your client needs to 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.

How to be Safe from Legal Troubles as a Coach?

The best way to protect yourself against any lawsuits 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 type protects you as a coach (or your coaching business as an LLC) from any accusations related to negligently performing your services.

How to be Safe from Legal Troubles as a Coach

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, in case you do 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.

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.

legal requirements for life coaching
By Team Paperbell
September 15, 2021

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