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Do Therapists Need a Business License?

This is usually determined by your city’s legislation and the income you generate. Some metropolitan areas or states in the United States, for instance, don’t have business license obligations for new businesses; meanwhile, other locations have a business license requirement, but not for companies with revenues of less than $10,000 per year.

To be quite sure, you need to put a phone call through to your city’s Office of Business Development, and you will get a response in about 5 minutes. Starting a private practice as a therapist, counselor, or behavioral health specialist is an exciting adventure.

You get to pick your patients, establish your own business days, and learn new methods that will help you advance your business. Even though state regulations differ from place to place, you need to be certified to practice autonomously.

For example, a licensed professional clinical counselor (LPCC) is allowed to work autonomously and set up a private practice, meanwhile, a licensed professional counselor (LPC) cannot, especially since this certification normally involves oversight from an LPCC to detect mental disorders.

Nonetheless, ensure to reach out to your state statutes or certification authorities to see if your particular license enables you to operate as a private practitioner.

Basic Licenses Needed By a Therapist in the United States

When you own a therapy private practice, you are regarded as a small business subject to state and local regulations. You could hire a lawyer or an auditor to assist you in establishing your profession and ensuring compliance with regulations. You should think about the following points:

  1. Business licenses

A business license may be required but it depends on the area in question. You may be required to procure a business license in order to conduct your practice in your city. You might need to get a county license contingent on where you live. Verify with your state and municipality to figure out what you have to do in your location.

How to Apply

To find out, consult your city. The typical business license costs less than $100, and they are not required in all cities.

  1. Professional Licenses

What area of expertise do you want to pursue? Do you have the necessary accreditations and permits to offer the solutions you want to give? To guarantee you get the requisite qualifications, contact your state licensing board.

How to Apply

Check with your state statutes or licensing authorities to see if your particular licensure enables you to operate as a private specialist.

  1. Liability and malpractice insurance

Before you accept clients, you must obtain malpractice insurance to protect yourself in the event that you are sued. You might also require general liability insurance to protect yourself from court cases if a patient is wounded in your office. By entering a professional association such as the American Psychological Association, you might be able to qualify for discounted insurance (APA).

How to Apply

Malpractice insurance is available from a private insurance company, an independent contractor, or associations such as medical risk retention groups (RRGs).

  1. Business Registration

The formation of your enterprise influences the cost of taxes you pay and may provide constitutional immunity if your practice is prosecuted.

You have many choices, including forming a limited liability company or a professional limited liability company. These classifications create a legitimate barrier between you and your company. To figure out the best model for your business, you should consult a lawyer or financial adviser.

How to Apply

  • Create your LLC documents.
  • File your documents with the appropriate authority.
  • Provide a tax identification number.
  • Receive your Articles of Organization and LLC packet.
  • Provide an operating agreement.
  • Get a tax identification application that the LLC officer must sign.
  1. An EIN and NPI Number

Although both are not considered licenses and aren’t really necessary if you operate a cash-pay practice, however, it is not wrong to have them.

Have it in mind that both are free, can be obtained online in a matter of minutes, and are required if you’ll be providing CMS-1500 forms or superbills to your patients in order for them to be fully compensated, or if you will be dealing closely with insurers.

How to Apply

You can apply online through the IRS website, by mail, or by fax. The IRS’ online EIN assistant makes available a simple form for the online application. The online application can be accessed from 7 a.m. to 10 p.m. EST Monday through Friday.