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It’s not strange for students to need a little extra help outside of school. A good tutor can provide a child with a much needed one on one session that isn’t always entirely possible in a classroom.
If you have been thinking of starting a tutoring business, you could be at the beginning of something great. First and foremost, it’s important to set up your tutoring business the right way. As eager as you might be to assist your first student, taking the time to lay a solid foundation for your tutoring business is what’s going to establish its security and longevity in the long run.
Keep reading to learn more.
How Do You Start A Tutoring Business In Australia?
To open a tutoring business, there’s a number of different matters you will need to address. For instance, what age group will you tutor? What areas of study will be covered? Will you have other tutors or just yourself?
These are important questions as they will help you determine the kind of tutoring business you want to have. Putting together a business plan with all your ideas can be a great way to stay on track and determine the vision for your tutoring business.
Once you have a clear vision for your tutoring business, you can move on to bringing it to life. Much like students and teachers, business and the law go together. To properly start your turing business, you’ll need to follow the legal considerations that come with it. Let’s take a closer look at them below.
Registering Your Tutoring Business
The first step to getting your tutoring business off the ground is making sure it’s legally registered. The registration for your tutoring business will depend on the legal structure you want for your business. In Australia, the three most common types of business legal structures are a sole trader, partnership and a company.
Sole trader and partnership businesses differ greatly to companies – it’s important to understand these differences before committing to a legal structure.
Sole trader and partnership businesses have an easy, inexpensive set up process. On the downside, they offer little to no legal protection. To register as a sole trader or partner, all you need to do is obtain an Australian Business Number (ABN) which can be done online. If you’re entering into a partnership, then all partners will need their own ABN. The next step is to register a business name (unless you meet the exception) and for partner businesses, you might consider getting a Partnership Agreement drawn up.
That’s basically all there is to starting a tutoring business as a sole trader or partner business. Despite the relatively easy set up process, it’s important to remember that there is extremely limited legal protection if you choose to register as a sole trader or partnership business. This is largely due to there being no legal separation between you and your business. When you register as a sole trader or partner, your business is legally attached to you personally. Therefore, whatever happens with the business – good or bad, directly impacts you personally.
This can be a pretty big risk, as business by nature has its share of ups and downs.
If your tutoring aspirations are a serious business endeavour, then it’s best to register as a company. A company is a legal entity on its own, offering you much more legal protection. As the company is able to exist as its own legal person separate to you, your liabilities will be limited. This gives you much better legal protection from the risks associated with running a tutoring business.
Setting up a company can be a bit complex – it’s better to have a legal expert guide you through this process. Registering a company involves making decisions about your company governance, directors and shareholders. You will also need to do a company registration application with the Australian Securities and Investments Commission (ASIC), who are the main regulatory body for Australian companies. ASIC has some pretty strict rules, having someone who expertly knows their way around this process is the best way to make sure your tutoring company is set up the right way.
Get Legal Agreements For Your Tutoring Business
When you start your tutoring business, it’s important to take the right steps to protect your business. Legal agreements are one of the primary ways you can secure protection for your business, as they set out the terms and conditions for the way others will interact with your business.
We’ve listed a few legal agreements you may want to consider getting when starting a tutoring business:
Service Agreement: A service agreement is the contract you will have with your students. Managing expectations and clearly outlining the rights and duties of both parties is essential to a good relationship with your clients.
Employment Agreement: If you’re going to be hiring tutors, then it’s important to have a contract in place communicating the terms of their employment. Role description, pay, leave, breaks, termination and much more should be clearly stated in an employment contract.
Non-Disclosure Agreement (NDA): As a tutoring business, there’s likely to be information and materials you want to keep within your business. An NDA helps legally protect anything you want to keep confidential – it’s worth getting one drafted.
Can I Start My Tutoring Business Online?
Yes, it’s perfectly acceptable to start your tutoring business online. In fact, having your tutoring business online can make it more accessible for a wider pool of people. Even though being online has many benefits, it’s important to manage the risk of being online by taking appropriate legal measures.
For example, you’ll need to have certain legal agreements such as a Website Terms and Conditions and a Privacy Policy. These agreements determine how others can use your website and in the case of a privacy policy, it’s legally required if your tutoring business’s website is going to be collecting information from its users.
If you want to learn more about starting an online tutoring business and the legal agreements you might need, we’ve written about it in greater detail. Check out our article, Setting Up An Online Tutoring Business.
Do You Need A Licence To Start A Tutoring Business?
No you don’t need a licence to start a tutoring business. At the moment, tutoring isn’t a heavily regulated industry in Australia. That means, there’s no specific licences or even qualification that are specific to tutors in Australia.
However, this doesn’t mean there are no laws you need to consider when starting a tutoring business. Australian Consumer Law (ACL), employment law, local regulations and general legal compliance still apply, no matter how regulated or unregulated an industry is.
For instance, if you’re going to be working with children, then you or your tutors will likely need to obtain a Working With Children Check (WWCC). Your tutoring business will also need to ensure its business practices and operations are legally compliant at all times. For instance, obeying the ACL by charging fair prices and not engaging in deceptive conduct of any kind.
If you’re going to hire staff to work in your tutoring business, then you’ll need to meet your employer obligations, such as providing a safe working environment and ensuring your employees are receiving the correct entitlements. Additionally, local council laws may apply such as seeking permits to open a tutoring business in your area.
Overall, many of the laws that impact your tutoring business will depend on the specifics of your business. It’s a good idea to chat with a regulatory compliance expert, as they will be able to help you uncover the exact laws that apply to your tutoring business.
Next Steps
Starting a tutoring business can be a rewarding business venture, however it’s important to address the legal considerations when setting up your business. To summarise what we’ve discussed:
- Register your tutoring business legally, choosing between sole trader, partnership, or company structures, each with different levels of legal protection and complexity
- Obtain necessary legal agreements, such as service agreements with students, employment contracts for tutors, and non-disclosure agreements to protect confidential information
- Consider starting your tutoring business online, ensuring you have appropriate legal measures like Website Terms and Conditions and a Privacy Policy
- While you don’t need a specific licence to start a tutoring business in Australia, ensure compliance with Australian Consumer Law, employment law, and local regulations
- If working with children, obtain a Working With Children Check (WWCC)
- Consult with a regulatory compliance expert to ensure your tutoring business meets all applicable legal requirements
If you would like a consultation on starting a tutoring business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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