In today's episode, Mariam shares important legal considerations when growing your coaching business.

What you'll learn:

➡️ The legal aspects of scaling your online business and how to avoid the legal pitfalls

➡️ The benefits and limitations of your business structure

➡️ Your intellectual property protections

➡️ Why you need a Dispute resolution process

➡️ How to protect your collaborations and opportunities

➡️ Insurance and Liability protections

Free Access to My Coaching Client Agreement Checklist download: https://mariamtsaturyan.com/coaching-client-agreement-checklist/

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Legal Disclaimer: Although Mariam Tsaturyan is a licensed attorney, she is not your attorney. Any information, tips, or materials in these podcast episodes are for educational and informational purposes only. No attorney-client privilege or relationship is established by your subscribing, downloading, or listening to any of Not So Risky Business podcast episodes. The information shared in the Not So Risky Business podcast episodes is not intended to be legal advice and should not be construed as such or as a substitute for getting legal advice from your attorney. If you need specific legal advice, consult with your attorney.

You are listening to Not So Risky Business podcast where we make legal easy for you by unlocking access to essential legal information, training and strategy for online businesses, coaches and entrepreneurs. I'm your host, Mariam Tsaturyan. Welcome. Welcome back. Today's episode is for my coaches, consultants, and anyone who works with other people such as group coaching programs, consultation programs, and yes, sometimes even memberships.

So if this applies to you, make sure to pay attention because I'm going to share many important facts that you need to know about your own businesses. As you see the topic, it says How to avoid legal pitfalls when scaling your coaching business. Yes. There are different legal considerations at play when you're growing and scaling versus when you're just starting out.

So a lot of the legal requirements, legal nuances come into play when you have more opportunities available to you. You are collaborating more. You maybe have a team, you're working with more people, you are making certain amount, certain amount of money in your business and so on. So newbies, beginners might not deal with as many business requirements and necessities but if you're somebody who's at the moment, scaling or growing their business, then this episode is going to be great for you.

So make sure to pay attention. Why is it important to be aware of these legal requirements of necessities of implications when it comes to your Coaching business. Simply put, because if you are not aware of this, this legal is unfortunately the one thing that can take away your success overnight.

If you haven't been paying attention to the legal necessities, if you weren't compliant, if you didn't do your absolute best to make sure that you are not actively violating any of the requirements, laws and policies out there. Then it could come back to hurt you really badly. This is not me just doing my fear mongering among you or trying to put fear in you.

This is me talking facts.There are many business owners out there, many multimillion dollar business owners out there and higher who didn't think the legal protections were important. They ended up having to face some really sad realities. One, I'm not going to name names just because I'm not allowed to.

Hello, attorney. Client privilege. But one such instance is a very well known digital creator out there. He and his partner created a wonderful business together and then, but they didn't have an agreement in place. The partner ended up walking away, taking this business idea and creating one on his own, leaving my client to struggle and to come up with a new business idea.

So had my client had an actual agreement in place. An nda, a non-compete, an actual terms and conditions, what to do when one of the partners wants to walk away or an actual business structure in place. Not just, Hey, let's do this thing together, type of a thing. My partner would have been safeguarded. He wouldn't have had to lose several millions of dollars, and he would've been able to put a stop to his delinquent partner's actions.

Now this is a little bit of an extreme case, but these things happen in everyday life, so you'll do your absolute best to make sure you are protected against those type of scenarios. Because let's face it, you spent so much time building your business. Your success wasn’t overnight. No matter what everyone else outside wants to say or thinks, yes, you might have earned that big amount of money in.

Only five days doing this amazing launch, but it probably took you months, if not years, to get to that stage where you could do that amazing launch and earn that kind of money. So nobody knows your struggles. Nobody knows the sleepless nights you've pulled, they don't know what you had to give up. They don't know that you had to say no to a lot of social opportunities.

To go out there, have fun, socialize, party because you had to stay back and work on your business because you had to make sure you had clients coming in, you had people, signing up to your coaching program. So do not let legalities be the reason why you lose all of that. I'm here to answer your questions.

I'm here to make sure that there are no unknowns for you and that you do not resort to Google or Wikipedia, because as we know, those are not the most accurate sources. For that, I'm here for you. If you have any specific questions, feel free to send me an email or shoot me a message on any one of my social media accounts.

And I'll do my best to get back to you if it's a complicated question that requires some time in order to respond to that. You know what I'll do? I'll create an entire podcast episode around that. Of course. I'll leave your name out unless you want me to include it so you can have an in-depth response to your question.

Let's start from your content that has all kinds of intellectual property implications built in your copyrights, your patents, if you have some sort of invention, your brand, your the very existence of your business online, in front of your audience, your customers, your clients. This would be your trademark, any relationship you have with your team, employees, contractors, those would be implicated under contracts and agreements, vendors, collaborators, all of those.

Taxes. Right? So keep in mind there are number of areas in your business that need to pay attention to legal requirements, legal necessities, and compliance. So let's get started on today's episode, one of the simplest places that a lot of business people go wrong is their business structure. So some people when they start a business, and this is true for anyone, not just coaches but any business owner.

The easiest way obviously, to start a business is not to have a business structure, right? We would just do business as a sole proprietor. Granted, it is not illegal to do so. A sole proprietor means we just do business under our own name. We do not form an actual business structure such as an LLC, an LLP, a corporation, a partnership, or something along those lines.

We just do business as is, and we file our business taxes under our own taxes and so on and so forth. That, however, is the absolute worst form of business. You can do, I wanna say structure you can have, but it's not really a structure, so we'll just call it a business. Sole proprietorship is not smart for anyone, especially for anyone who is actively scaling and growing their businesses.

Sole proprietorship does not separate your persona from your business persona. This means that if your business did something to be liable to somebody else and it gets sued, you personally will be liable for every single business debt, Business liability, assets and all of that. So if you have this house and cars and other assets, those could get taken away from you in order to pay your business expenses and debt.

So we do not want to have a sole proprietorship. When it comes to scaling your coaching business, if you're somebody who had a sole proprietorship to begin with, my friend, it's time to upgrade that. It's time to form your either LLC or corporation in order to continue with your business and be protected.

Those two forms of structures are my favorite, just because they provide you with the limited liability protection that you need for your business. And, they're honestly like the easiest forms to have. We'll talk about that later in more detail. But the first thing you need to consider, depending what kind of business structure you have, audit yourself or pay somebody to audit your business.

Is it time to change your business structure? Did you outgrow your particular business structure? Do you need to do something else? Do you need to convert it to something else? Hypothetically, let's say you have created an LLC. LLCs are great. They work for most people, most businesses out there, but sometimes.

You might outgrow it, or even if you don't outgrow it, your needs might change and therefore you might have to restructure your business or transition to a different business structure such as corporations. So let's say you wanted to franchise your business, you wanted to license out your intellectual property to other businesses or your trademark to other businesses.

In this particular situation, having a corporation will serve you better than having an LLC. And so just something to keep in mind. Periodically, go through your business, go through your business needs, audit it and see if what you have still works for your business. Or maybe it's time that you've actually started something different or upgraded or changed something.

Understand the benefits and limitations of your business structure. What are some positives, some pros that come with that, and what are some cons that come with that? So there are sometimes, there is no pro and con, there is just what works for you, what doesn't, or what makes sense for your business and what doesn't make sense for your business.

So make sure to constantly evaluate this so that you have the absolute best business structure that you can have for your growing and scaling coaching business. And of course, I shouldn't even have to say this, but to be on a safe side, let's say it. Make sure that you are actually keeping up with all the necessary filings and registrations for your business.

So when you form a business structure, it's not a one-off thing. You do not form it, and you are done. Right? There is such a thing as information statement. This is a piece of document or a form online in most cases, that you need to fill out every single year. If you do not, you would be late on that document and then at some point your account, your business structure will become inactive or delinquent on your Secretary of State website, which is not something you want to deal with.

So now that we've addressed your business structure, the next and most important part that I wanna address, of course, when it comes to scaling your coaching business, are your intellectual property protections. When you're a new business, when you're a brand new coach. You maybe don't have any clients yet, or you might have one or two clients and you might not even have any high ticket offers.

Right. let's face it, when people are starting out, a lot of 'em are afraid to charge what they're worth because they're thinking, what if nobody signs up for my offer? So they really undervalue themselves. But regardless, when you're a beginner, you don't have as many things to worry about as when you're scaling.

One of these things is your intellectual property. Of course, as you're scaling, that means you're at a place where you are doing really well in your business. You're making a lot of money, you are popular, you are garnering that attention and. Well, uh, getting that well known factor within your audience or in your related audience as well.

People know you by name or by reputation, so this means your intellectual property, such as your trademarks and copyrights are now becoming even more valuable. Therefore, they're more at risk of being infringed once something becomes popular. The number of copycats increases. You want to avoid this problem.

You want to make sure that you protect your intellectual property, your trademarks, and your copyrights from the very beginning so that you do not have to deal with copyrights, infringement, your assets, your intellectual property being stolen and all of that. So, Make sure that your actual brand name is registered for your trademark.

Your brand name has the widest trademark protection. This is the number one thing I recommend my clients register a trademark for. If you really love your logo, if it's protectable, you can protect your logo as well. If you have a slogan or a phrase that you're known for, that is part of your brand. Then you can protect that as well, of course.

But your brand name comes first, so make that a priority. your copyrights, you know, your content, your original authorship, works of authorship. These are incredibly important to protect. So you might be, you might have some courses within your coaching business that you give access to your clients. You might have some how to videos.

You might have some PDFs, some checklists, some guides you might have, podcasts, right? so no matter how you created that content, no matter what kind of content and a work of authorship it is, whether it's an image, it's a software, even something like an architectural work or a choreography.

All of these are protected under copyright and with copyrights. It is a little different from the trademark protection in a sense that from the moment your work exists, you get that automatic copyright protection in place. But I would still argue that you should absolutely register your copyrights as well, even though technically you do have full copyright protection rights.

Simply because when you do have copyright registration in place before somebody infringes your copyright, number one, you have more avenues of getting reimbursement. And not just more avenues, but also more reimbursement. And number two, attorney fees will be a thing of the past. You wouldn't have to worry about this because we all know attorney fees can, and they do add up and it's a lot of the expenses.

And number three, when you have a registered copyright, you can actually actively ask the court to issue an order. We call this injunction, but you know, you don't have to use the legal term. A court can issue order to the other infringing party to stop doing whatever it is they're doing that is hurting your business until at least there's an actual legal decision at the end.

So if you are not registering your copyright, you cannot file anything in court unless you do so. So this is a huge issue. You want to make sure that you have all the opportunities to protect your intellectual property in every single way. Now, is litigation something that we look forward to? No, absolutely not.

It is long. It is drawn out. It is expensive. It is stressful. In fact, do everything in your power to avoid litigation when it comes to intellectual property infringement. But sometimes there's simply no other way. There's no choice. If your intellectual property is important and valuable to you, then you have to do what you need to do, right?

So be on a lookout for that. The next part of kind of legal requirements and necessities and implications. As you are scaling your coaching business comes in a form of employment and contractor agreements. Now, as you're growing and scaling, you are most likely hiring people. You're most likely working with virtual assistants or in-person assistants, not necessarily virtual.

You're most likely hiring some employees, or you have contractors doing one off projects for you, or maybe contractors who are just with you, but they don't, they don't have the employee status. Whatever the case, make sure these relationships are protected. Yes, I say protected as opposed to you're protected against them because it's equally important to protect your contractors and employees.

A good contract, a good agreement, is not one-sided. In fact, if a contract heavily favors one party over the other gives unfair advantage to one side over the other. Court simply will not uphold that contract. They will say that this is not enforceable, just by the sheer nature that it is an unfair contract.

So your contracts need to be fair, your contracts need to be reasonable. And your contract need to be detailed and explicitly write down every single situation and scenario that you have come across or that you might come across. Now, I'm not saying that you can possibly predict every single scenario that will ever happen to you.

That is why we exist. Attorneys exist because every day with your businesses, something new comes up that you don't know how to deal with, or you come across something that is challenging. Therefore, you go hire the actual help to figure out how to resolve this. But there are a lot of situations and circumstances that you can predict, that you can foreshadow whether something like this could happen, not necessarily will happen, but could something like this take place

If the answer is yes, make sure it is included in your contract, in your agreement, that you're covering all of those scenarios, how to address them, how to overcome them, and move forward with building your business. So when it comes to employment and contractor agreements, you need to have clearly defined roles and responsibilities for all parties involved because this is one of the main reasons why working relationships go bad.

One side usually asks for things that the other side is not prepared to give. You might ask your contractor to do certain things that they don't think it is covered in the agreement or they don't think it's part of their responsibilities and duties, and as you insist that they do it, they insist more that it's not their job to do it, and that relationship falls apart.

So clearly define roles and responsibilities for all parties involved yourself as the business owner, as the project owner, what it is that you have to do. How often in what capacity are there specific tools you need to use? Are there particular deadlines you need to keep? Is there a particular way that you need to deliver the actual project to your contractor for them to start work on that.

And vice versa for the contractor or employee. Make sure everything is clearly defined, everything is written down in detail. Now, the next part, of course, when it comes to having. Employees and or contractors comes in a form of making sure that you are complying with labor laws, you know, including things such as wages, hours, benefits, insurance.

So make sure you are not violating any state laws, of course, federal as well, but usually these things are state law related when you have employees and or contractors on your team. So, you don't want a lawsuit on your hands. You don't want your employee to sue you for labor code violations. These things can be extremely costly and time consuming, not to, of course, um, obviously stressful as well.

So do everything in your power to avoid this by preparing in advance, by knowing exactly what to put in the contract, what to put in the agreement, what labor laws, wages, hours, benefits, insurance stuff you need to be complying with. And last but not least, when it comes to employees and contractors, this is, I would say, arguably the most important point.

You want to protect your confidential information and trade secrets when it comes to working with others because it's not guaranteed that your employee or your contractor will stay with you forever. Right? We, that's not even going to happen. Even if there was a guarantee in place, what we know will happen is at some point that contractor is going to work for somebody else.

Is going to work with somebody else and that somebody else might just be a direct competitor of yours. So to make sure that this contractor or employee does not share any of the confidential information that you have in your business, or the trade secrets that you have in your business that maybe they became privy to by the nature of their job, by working with you, helping you in your business.

You need to have non-disclosure agreements signed with them. Non-disclosure agreements are more commonly referred to by their acronym as NDAs, and this is also the same thing as a confidentiality agreement. So have an NDA signed with your employees. With your contractors. The NDA again should not be unfair.

Make sure that you are taken into consideration all party's interest. And do your best to create a fair agreement that protects your confidential information and your trade secrets. Because if those things are no longer confidential, they're no longer a secret, then your business does not hold any value because the thing that made your business valuable, that trade secret, that confidential information that made it possible for you to do the type of business you're doing is now known to everybody.

Therefore it's no longer valuable, right? So make sure you have that in place. Now the next part is again, has to do with contracts and agreements, but this time it has to do with your clients. We've talked about agreements and contracts as they relate to your employees and or contractors. And now it's time to talk about your contracts and agreement for your clients when you are a coach.

You are working with a lot of clients and if you are scaling, chances are you have both one-on-one coaching and group coaching. You might have some sort of mastermind, you might have some sort of workshops that you do. This can be virtual, this can be in person. So you're going to have a lot of clients from all over the place.

If you're virtual, you'll likely have clients from all over the world, if you're more local then, from your particular state, city, town, or surrounding cities. Right? So protect your relationship with your clients similar to your employees and contractors. Your contracts with them need to clearly define expectations, clearly define roles, payment terms, deliverables, when to do what, who is expected to do what, and all of that.

So any point that you can predict could become a issue, a contention between you and your client. Make sure you are covering within your contract and you also need to have some sort of dispute resolution process in place with clients. Sometimes dispute resolution processes can help you first speed up resolving any issues that you may have with them.

Second, it might be a lot more affordable, or I should say less expensive than going the litigation route, filing a court, a case in court route, right? If you have an actual dispute resolution process in place, this can address a lot of the concerns and it can solve a lot of the problems. Now, the next part, of course, when it comes to having clients, you need to ensure that you are complying with data protection and privacy laws because you have.

Collected the information on that client from somewhere. The client might have given it to you personally. They might have filled out some sort of a form online or they might have purchased something from you, or they might have even left a comment on a blog post or a podcast episode or a YouTube video.

And you have the tools, the ability automations in place to get the information of the person who contacted you, who commented, who filled out something and adding it to your email marketing platform. So you are taking Information, personal information about those people and adding them to your database.

So if you do that, you need to make sure you are complying with data protection and privacy laws, such as the GDPR, the CCPA, the VCDPA, which is the Virginia Privacy Law. So make sure you are complying with the regulations, the acts, and the laws that need to be complied with Now. As you're scaling, of course, your coaching business, you are more likely doing, most likely you're doing more partnerships and collaborations.

This can be something like having a show on YouTube or let's say going live with somebody on Instagram once a week. Or creating a course together on a particular topic or co-hosting an event, reviewing a product that they give you or a service, whatever form this partnership and collaboration takes.

It is yet another facet of your business that you need to protect, that you need to be aware, has certain legal implications again. The number one way to make sure that you are protecting this partnerships and collaboration relationships and that you're being legally compliant and protected is to have partnership agreements, collaboration agreements in place.

And as before, this is a common theme with all contracts and agreements. Make sure it's in writing. Make sure it's detailed. Make sure it's very clear, so clear that a five-year-old could understand what you're writing when it comes to agreements and contracts. It's not the place nor the time for you to try to sound smart.

Use big words, l use legal jargon in order to make an impression. This is the actual time where you need to be incredibly clear, concise, so that the other party understands exactly what you're saying instead of feeling lost and confused. So protect your partnerships, protect your collaborations and opportunities with clearly written, detailed partnership and collaboration agreements.

Understand your particular roles in the business, so if you're working with somebody or collaborating with somebody, you and that person need to understand your actual roles within your business. Who is going to do what? Who's expected to do what and how and when. And of course, you need to make sure that your business interests are protected in case that partnership and or collaboration dissolves, or one of the people decides they've had enough.

They don't wanna do it anymore, they want to sell out. So predict every scenario that you might come across. And make sure your agreement and contract addresses that situation in detail, what to do, how to do it, when to do it, and all of that. Okay? And next one is kind of a no-brainer, right? Because it's obvious if you wanna be legally compliant, you need to stay up to date with.

Industry regulations with legal regulations and new laws that come out that might potentially make your business liable for certain things or make your business a requirement for your business to comply with a certain regulation or enact. So make sure you are up to date with all industry regulations, whether you need a permit for something, whether you need to get certified or something, or maybe there is a new regulation in place, then you need to file certain.

Paperwork for or submit certain forms for. So do that. Be up to date, set up Google alerts if you need to, or simply the best way, consult with a legal professional to ensure your compliance. insurance and liability protection are the next topics that I want us to discuss because a lot of the times the, um, the question of insurance.

Goes on a back burner. Nobody likes to talk about it. Nobody wants to take it seriously. But insurance coverage is needed for your scaling business. However, you need to identify what kind of insurance coverage is needed in order to scale your business. Are we talking about general liability? Are we talking about professional liability?

Maybe some form of cyber protection like cyber insurance. Maybe you have an actual location, so you might want to consider premises liability, whatever it is, identify the insurance types that you need coverage for and make sure to have them in place when you're scaling. As I hinted in the beginning when you're growing and scaling.

More and more issues will come up. You'll have more legal troubles, more legal headaches, requirements and necessities that you need to comply with and pay attention to, and insurance happens to be one of those. And you know, as your business grows, you might need higher limits on certain insurance plans and packages than you had before.

That's completely fine. Yes, it might cost you a little bit more money, but the good news is that you're probably making a lot more to need higher coverages or the different types of insurances for your business. Okay, so I really hope that you took notes today and whatever we've talked about resonated with you if you're a coach who's currently, uh, scaling their coaching business, because legal requirements and compliance with the laws is extremely important.

Yes, it is a dry, dry topic. Yes, it's not attractive in the same way that a topic on making money or growing your audience or mindset or dating or relationship or even something like health and fitness are attractive. Legal is boring. I'll give you that. It's dry, but legal is important if you've built your business, if you are already scaling your coaching business.

You will do yourself a great disservice by not being compliant and protected under the laws legally so that you can actually scale with confidence without legal headaches to deal with. I have addressed the major areas of legal implications that you need to be aware of when scaling your business.

Of course, there's more things that you need to consider as you're scaling, but that's for another time. I hope you enjoyed today's episode. I have actually a free resource for you in the show notes of this episode, so make sure to scroll down to the show notes and download that free resource. It is a coaching client agreement checklist, and it's a very easy checklist to get through.

It identifies the key clauses, key parts of your coaching client agreement that you need to have. And if you don't have those, you need to go back and update your coaching client agreement because without those, your agreement is no good. So make sure to download coaching client agreement checklist PDF from my website.

The link will be in the show notes for you. I enjoyed today's episode immensely, and I look forward to talking to you next week. Bye-bye. Until then.