Access to the internet has opened up a huge opportunity for learning. For educators, it’s expanded the mediums to teach classes on. Online learning is flexible, convenient and breaks down certain barriers to education. Many eager students have sought online classes to complete certain courses, certifications or just gain some extra knowledge. 

If you’ve been thinking of starting an online course business, then you could be providing a wonderful service to others. It’s necessary to remember though, there’s a lot more that goes into starting an online course business than just setting up really great classes. You’ll need to think about setting up your business the right way and legally protecting it if you want your online course to survive in the long run. 

Keep reading to know more about the legal side of starting an online course business. 

What Exactly Is An Online Course Business? 

Not to be mistaken with an online business course, an online course business simply refers to a business that provides online courses. They could be of any subject (including business) such as data analytics, coding, graphic design, history of photography. 

To build an online course business, you’ll need to know what kind of courses you will provide, the platform they will be available on, who your competitors are and how you’ll get the word about your online course business out there. This process will take some meticulous research and planning, so it’s a good idea to compile everything into a business plan – that way you can always have something to look back on and keep you on track. 

The First Step To Start An Online Course Business: Registration

Now, the first official step to starting your online course business is to register it. You might be tempted to just jump to this step and skip the planning stage. However, we always recommend having a solid plan prior to registering any kind of business. 

When you register your business, there’s a number of important choices you will need to make. Having a clear idea of what you want your online course business to look like will help you make the right choices for it. 

One of the first major decisions you will need to make for your online course business is determining the correct legal structure for your business. In Australia, the most common legal business structures are a sole trader, partnership and a company. These three are pretty different therefore, it’s necessary to understand them well before deciding which one to go with.  

A sole trader business has an easy setup, however, it doesn’t offer much legal protection. To register as a sole trader, you simply need to get an Australian Business Number (ABN). It’s a quick process which can be completed for free, online. If your business is going to go by a name that is different to your personal one, then you will need to register a business name. Once that is completed, your online course business will be officially registered as a sole trader. 

A similar process applies for partnership businesses. All partners will need to get their own ABN and register a business name unless they meet the exception. Partners might want to formalise their relationship further through a binding contract, such as a Partnership Agreement. However, that step isn’t legally required – once all partners have their ABN and business name registered, they can officially start their online course business. 

As quick and easy as the set up process for a sole trader and partnership business is, it has the major drawback of offering very little legal protection. When you register as a sole trader or in a partnership, the business is attached to you personally. WIthout any legal separation between the business and yourself, you will be liable for the entire business. That means if something goes wrong, you could be in jeopardy along with your business. This is a pretty big risk as the nature of business involves ups and downs, so it’s smart for business owners to be prepared and protected. 

A company structure is better suited for providing legal protection. When you set up a company, it becomes a legal entity that is separate from you. A company enjoys many of the same rights as a legal person – it can buy or sell property, earn an income, have debt or be involved in court proceedings. As the company doesn’t need you for any of those things, your liability will be limited when it comes to the company. 

However, setting up a company can be a bit complicated. To register a company, you’ll need to decide on the legal structure of your company, who your directors and shareholders are, how your company will be governed and much more. From there, you’re required to register your company with the Australian Securities and Investments Commission (ASIC). As ASIC is the main regulator of companies in Australia, it’s important to correctly fill out all their forms and adhere to their rules during the registration process. 

You will also have ongoing obligations with ASIC when you run your online course company, such as annual fees, updating them on company changes and audits. We highly recommend getting a legal expert to help out with setting up your company. A legal expert can make sure the company registration gets done correctly and they can explain what your ongoing obligations are with ASIC so you never miss anything important. 

Do I Need Any Legal Documents For Starting An Online Course Business? 

Yes, legal documents are an integral part of starting an online course business (or any business for that matter). Your online course business will be exposed to a number of risks, legal documents are one of the main ways to manage these risks. 

A legal expert can help you determine the exact legal documents you will need for your online course business. However, there’s a few common ones that are important to know about. We’ve listed them for you below.  

Service Agreement: When you offer a service to your clients, they will likely have their own expectations. A service agreement is a good way to communicate what clients can expect, their rights while interacting with your business as well as any responsibilities they may have. A service agreement helps make sure you and your clients have a mutual understanding, leaving less room for disputes down the road. 

Website Terms and Conditions: As an online course business, the terms and conditions for your website are particularly crucial. Your website will be your main platform, so you want to make sure it’s completely protected. A website terms and conditions sets the terms for using your website, limits your liabilities and gives you control and ownership where necessary. 

Privacy Policy: Another important document for your online course business’s website is a privacy policy. Unlike the other legal documents we’ve discussed in this article, a privacy policy is actually required by law. Australian privacy laws require any business that collects the private information of its users (even if it’s just an email or a name) to have a privacy policy on their page. There’s a number of requirements your privacy policy will need to meet before it’s acceptable, so it’s a good idea to have a legal expert help draft this one. 

Non-Disclosure Agreement: Protecting your online course business also means securing confidentiality where necessary. A non-disclosure agreement (NDA) is a necessary legal instrument when it comes to making sure important private matters stay secured. 

Are There Any Other Legal Considerations For My Online Course Business? 

Legal considerations are something you’ll need to be aware of constantly while running your online course business. Like everyone else, businesses need to follow the law too. So, it’s important to consistently make sure your conduct is within the boundaries of the law. 

A number of legal considerations are going to apply to your online course business. It’s important to chat with a legal expert so they can guide you in the right direction when it comes to legal compliance. Here’s a few areas of law you should probably look out for (and seek legal advice for) when starting your online course business: 

  • Industry rules and regulations
  • Australian Consumer Law (ACL)
  • Local council and state laws
  • Data and privacy laws
  • Intellectual property law
  • Employment law 

So, whether you’re making sure you’re providing your employees with the correct benefits, adequately protecting the data of your clients or ensuring their consumer rights are properly upheld – knowing the laws you need to follow when running your online course business is the first step to avoiding legal trouble for non-compliance. 

Next Steps  

An online course business can be an exciting business venture however, it’s important to take care of the legal considerations so you can protect your new business. To summarise what we’ve discussed: 

  • Starting an online course business involves meticulous planning and legal considerations, not just creating great courses 
  • You need to decide on your business structure, such as a sole trader, partnership, or company, each with different legal implications 
  • Registering your business correctly is crucial, and a company structure provides more legal protection than sole trader or partnership 
  • Essential legal documents include service agreements, website terms and conditions, privacy policies, and non-disclosure agreements 
  • It’s important to ensure ongoing compliance with laws and regulations, including industry rules, Australian Consumer Law, data privacy, and intellectual property laws 
  • Consulting with a legal expert can help in drafting necessary documents and navigating legal requirements.
  • Protecting your business legally ensures its longevity and helps avoid potential legal issues in the future 

If you would like a consultation on starting an online course business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.

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