Rust corrodes metal and ruins finishes. As long as the rust is surface rust, and has not deeply pitted the metal, many rusted metal surfaces can be restored. Check your stool for stability by probing the rusted areas with an awl. If the awl will not punch through, the metal is intact and worth restoring. If the metal punches through or crumbles, the stool is probably not worth saving.
Removing the Rust
Light rust can be sanded away. Rinse sanded areas with a rag dampened with paint thinner. If the area still appears rusty, it will need to be treated with naval jelly. Naval jelly can remove light to moderate rust. It is a white to pink jellylike substance, similar in appearance to petroleum jelly. Spread the jelly over the rust with a disposable brush. Allow it to sit for the manufacturer's recommended time, typically 5 to 30 minutes, depending on brand and concentration. Scrub the jelly off with steel wool, then rinse with water to neutralize it.
Prepping the Surface
Sand the entire surface of the stool, especially areas where the paint is chipped or peeling. Use a 200-grit or finer sandpaper on a power sander, sanding block or sanding sponge. Work to rough up the paint in all areas and smooth the edges of chipped and peeling areas to blend with the surrounding surface. Fill chips and dings with epoxy body filler and allow it to harden. Sand the filled areas smooth and wipe the entire surface with a tack cloth or soft brush to remove the fine sanding dust.
Apply oil-based primer with a brush to the surface of the stool, or use a spray primer. Apply brush-on primer in long, straight strokes, overlapping slightly. Spread it smoothly, avoiding buildup which leads to runs and drips. Use a spray can by holding it 8 to 10 inches from the surface, moving in short, brushlike strokes. Keep the can moving and release the spray button at the end of each stroke to prevent pooling. Allow your primer to dry according to label instructions.
Paint can also be applied with a brush or spray can. For brush-on applications, use a lacquer-based enamel for best results. Apply the paint in two or three coats, depending on coverage. Allow the label recommended drying time between coats and use emery cloth to lightly sand the surface between coats. Apply spray paint using the same technique outlined previously for spray primer. Do not sand spray paint between coats. Allow one hour drying time, but respray before the paint completely cures for best results.