Legal Considerations for an Education Startup

Startups in the education sector are transforming the way that students learn. These startups often make education more varied and accessible, taking education beyond the classrooms of closed-door institutions. Starting an education business can be the start of a fulfilling and rewarding career. But, it is a great idea to be aware of the necessary legal considerations before doing so. This article will explain several essential legal considerations for those operating or considering setting up an education startup. 

1. Business Structure 

Deciding on a suitable business structure is a crucial first step when starting any new business. A business structure is the legal format in which business owners arrange and operate their businesses. 

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There are many different business structures available. Each carries different advantages and disadvantages, including tax obligations, liability levels, and complexity. Common business structures in the UK include the following: 

• sole tradership; 
• business partnerships;
• limited companies; and
• limited liability partnerships. 

It is essential that you understand the implications of each structure and decide on one that is most appropriate for your needs and those of your education business.

2. Licensing and Documentation

Depending on your intended business activities, you might need to seek specific registrations and licenses to deliver educational services. This might include:

• registering with your local authority; and
• seeking a certificate from the Disclosure and Barring Service (DBS). 

3. Data Privacy

Most education businesses handle user’s personal information. For example, you might process and keep student data and that of your website users or employees. Data privacy laws, including the General Data Protection Regulation (GDPR), require that businesses handle personal data in particular ways. 

For example: 

• you must process data lawfully and transparently;
• you must have a legitimate reason to collect and store personal data;
• store data securely and only for the necessary purposes and period; and
• ensure that users can access, rectify and erase their data. 

Being aware of data privacy laws and ensuring your business activities comply is essential. If your business breaches data protection requirements, the Information Commissioner’s Office (ICO) can open an investigation. 

4. Contracts 

Well-drafted contracts are the cornerstone of a successful business. They set clear, legally binding terms and stipulate the rights and responsibilities of each party. When starting an education business, it is crucial to establish clear contracts, such as employment contracts with tutors who work within your company. 

5. Seek Legal Advice at the Planning Stage

It is an excellent idea to seek legal advice before starting your new business venture. A lawyer can help you to:

• ensure that your business plans and operations are legally sound;
• draft and review essential contracts; and
• understand the implications of the different business structures so you can make an informed decision. 

Education businesses’ activities will likely touch on several points of industry regulation and requirements, such as safeguarding and accreditation. Even if your education business is already operational, seeking legal advice is a great idea. This will ensure your operations are legally sound and mitigate the risk of future legal disputes. A lawyer can also advise you on the implications of relevant areas of law, such as education law and intellectual property rights. 

Key Takeaways

Education business owners have much to consider. In addition to facilitating learning opportunities, they must consider how the law impacts their business activities. Your obligations can vary depending on your business model. For example, the requirements for an ed-tech business that facilitates online courses can differ from that of a tutoring company with employees who tutor students in their homes. 

This article has discussed several relevant legal considerations for education businesses, including the following:

• understanding the various business structures and deciding on one that is most appropriate for your business; 
• obtaining the necessary licences and documentation, such as DBS certification; 
• compliance with data protection laws and regulations when collecting, handling and storing any personal data;
• having well-drafted contracts in place and thoroughly reading those others present you with (including employment contracts and supplier agreements); and
• seeking legal advice as early as possible into your business journey to clarify your obligations and mitigate risk. 

Further considerations include:

• having a clear and viable business plan;
• generating sufficient capital to begin;
• accreditation; 
• safeguarding; and
• developing robust policies. 

If you require legal advice about setting up an education startup, LegalVision’s experienced startup lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today at 0808 196 8584 or visit our membership page.