We live in an era that has taken steps in the right direction of understanding many previously misunderstood and misdiagnosed psychological problems, such as depression and anxiety. In the past, mental health issues were poorly dealt with because of ignorance, superstition, and misguided religious ideologies. But now, through current and developing studies, we have better and more effective solutions to various mental health issues.

The psychologists in this generation are more capable of providing sound counsel and clinically approved treatments to individuals who suffer from emotional and mental distresses. If you are a psychologist in California who desires to start your own private practice, we can help you form your own professional corporation. 

Mental Health Is No Longer Taboo

In this day and age, more people are seeking out mental health services than ever before. Whether they’re looking to address a specific issue or just maintain their overall well-being, many turn to psychologists for help. For those who want to go the extra mile and start their own psychology private practice in California – forming a psychological professional corporation can be an excellent way to do it. This article will provide you with all the information you need on how to get started on such an endeavor.

The process of starting your own business is obviously complicated, but with the right guidance and resources, setting up a psychology private practice doesn’t have to be overwhelming. We’ll walk you through each step of the way – from filing paperwork with the state government to establishing yourself as a trusted provider within your community. With our helpful tips and advice, you’ll soon have everything in place for a successful venture!

So if you’re ready to take that next big step towards becoming self-employed – let’s dive into what it takes to form a psychological professional corporation in California!

Major Decisions You’ll Encounter When Starting A Private Practice In Psychology

When starting a private practice in psychology, there are major decisions to consider. You’ll need to decide what type of business entity you want to form and comply with the California law regarding licensed psychologists. Additionally, you will have to determine how your services will be billed, whether you should offer sliding scale fees for clients who can’t afford full payment and if you plan on taking insurance or not.

In order to maintain compliance with California laws, it is important that all private practices involving psychology are owned by a psychologist who has obtained licensure in their respective field. In addition, any professional employees must also meet the same requirements set forth by the California Board of Psychology. Furthermore, depending on which county you practice in, additional regulations may apply regarding HIPAA privacy policies and other relevant information related to data security measures.

Considering these key elements before launching into your own private practice is essential– from forming a legal entity such as a psychological professional corporation, understanding licensing requirements and complying with state laws– helps ensure that you’ll be able start off on the right foot when opening up shop. This next section provides tips for those looking to get started in the world of private practice psychology within the Golden State.

Where Will The Majority of Your Clients Be Located? A Case Study Q&A

The other thing you will need to consider when forming a professional psychology corporation is the where: are you practicing in multiple states or JUST California? And if you are practicing in other states, what are the laws for qualifying in other states?

We had a client with this exact dilemma approach us for help. Let’s take a look at some of the considerations for their case.

CLIENT QUESTION:

Hi Andy,

Thanks for your patience. I was waiting to clarify whether/when I would be moving to Oregon, as I figured that might influence how we process paperwork. I have now clarified will be moving to Oregon in 1 week. 90% of my clients are in Oregon, but I do want to continue seeing my clients in CA. Am I right to conclude I will still need to set up a Corp in CA, and then qualify that in OR? Or are there other ways to proceed now that I will be located in OR? In line with this, if I was to set up a Corp in CA, I’m not sure – would I have to set up a business license somewhere in the state, even though I won’t be located there?

Thanks again for any help understanding how to proceed. -Sadie

OUR ANSWER:

Hi Sadie,

Thank you for the update regarding your move to Oregon and your practice details. Given that 90% of your clients are in Oregon and 10% are in California, you have a few ways to approach this situation. Below are some potential strategies to consider:

1. Form an Oregon Professional Corporation and Operate as a Sole Proprietor for California Clients:

This could be the most efficient approach. By forming a professional corporation in Oregon and handling the 10% of your clients in California as a sole proprietor, you would limit your California tax liability to just 10% of your revenue. This would allow the majority of your income to avoid California state taxes, which could be a significant advantage.

2. Form Separate Corporations in Both States: 

Another option, depending on your revenue, would be to form a professional corporation in Oregon and a separate corporation in California. This would only make sense if the revenue generated from your California clients exceeds $50,000 annually. Anything less than that would likely not justify the additional administrative burden and costs of maintaining a second corporation.

3. Form a California Corporation and Qualify It in Oregon:

It’s possible to form your corporation in California and attempt to qualify it in Oregon. However, it’s unclear whether Oregon accepts foreign professional corporations, so we would need to research this further. The benefit of this approach is that you would only need to manage one corporation. However, the downside is that all of your income, including that from Oregon, would be subject to California taxes, which many prefer to avoid.

Based on these considerations, I recommend forming a professional corporation in Oregon and managing the 10% of your California-based clients as a sole proprietor. This setup would minimize your tax exposure in California while keeping things simpler administratively. If you do end up earning more than $50,000 annually from your California clients, it could make sense to form a separate California corporation at that point.

An added benefit of having two corporations (if your California practice grows) is that you would have the flexibility to sell the California portion of your practice in the future while retaining your Oregon-based corporation.

Let me know how you’d like to proceed, and I’m happy to assist with the next steps. If you have any further questions or need clarification, feel free to reach out.

 

Best regards,

Andy

Tips For Starting A Private Practice In Psychology

Starting a private practice in psychology can be an intimidating process for those with little or no professional experience. It’s important to remember, however, that many psychologists have gone before you and successfully started their own business. With the right planning and preparation, you too can start your own successful practice. Here are some tips for starting your private practice in psychology.

Before anything else, it’s essential to create a detailed business plan. Your business plan should include information about what services you will offer, how much money you need to get started, how you will market yourself, and where you want to take your business in the future. A well-written business plan is key to success when setting up a new enterprise.

Next, make sure all of the necessary paperwork is filled out correctly and then obtain the necessary licenses and permits from the state of California. This includes obtaining a valid business license as well as liability insurance which protects both employees and clients against any potential legal claims related to negligence or other misconduct on behalf of the psychologist providing care.

Finally, once everything is set up properly it’s time to focus on marketing your services so that potential clients know about them! You might consider advertising online through social media sites such as Facebook or Twitter; joining local organizations that could refer patients; attending events organized by community groups; creating pamphlets or brochures featuring your services; or collaborating with other mental health professionals who could refer clients to you. Planning ahead, doing research and creating a business plan will serve to ensure the smooth transition into running your own private psychological practice in California. Now let us explore how much does it cost to start a private psychological practice?

How Much Does It Cost To Start A Private Psychological Practice?

If you’re dreaming of starting your own private psychology practice, have no fear! Starting a psychological business may sound intimidating and expensive…but if you’re willing to set aside the time and money needed, it can be done. Here’s what you need to know about how much it cost to start a private psychological practice in California.

Let’s get right into it – we all know that money makes the world go round (and around). The good news is that setting up a business entity like a professional corporation doesn’t have to break the bank. You’ll need to factor in filing fees with either the Secretary of State or County Clerk depending on where you incorporate as well as any required licenses for practicing psychology. Additionally, don’t forget about investing in creating a solid business plan so you can stay organized and on track throughout the process – this will come at an additional cost but can help make sure everything goes smoothly when launching your new venture.

When it comes down to brass tacks, here are the most important elements of getting started:
• Attorneys fees for incorporating your business
• Obtaining business licenses necessary for practicing psychology
• Crafting a comprehensive business plan

So there you have it; starting a private psychological practice isn’t terribly difficult or expensive when broken down into individual components. If you take things one step at a time, invest some thought into each element and seek out support from experienced professionals when necessary, then success should follow shortly after.

What is a Psychological Professional Corporation? 

A psychological private practice is a type of professional corporation. It is officially registered with the California Secretary of State and is engaged in providing the professional services of psychology.  

Which Government Agency Manages Psychological Corporations? 

As stipulated in the California Corporations Code, all professional corporations must be registered with the corresponding government agency that is tasked to manage their respective profession. Psychological corporations must be registered with the California Board of Psychology and abide by their rules. Failure to adhere to the rules and regulations of this government agency has equivalent sanctions and penalties.  

Talk to a corporate lawyer that specializes in forming professional psychological corporations in California. Click here! 

Frequently Asked Questions from Psychologists When Forming a Professional Corporation in California 

Incorporation Attorney has helped a number of psychologists in California start their own private practice. Our corporate lawyers specialize in forming psychological professional corporations. The following are a few of the most commonly asked questions when starting a psychology corporation: 

Are There Specific California State Laws that Psychological Professional Corporations Need to Abide?  

Yes. Psychologists who want to start their own professional corporation must know the following State laws and codes: 

California Corporations Code 

Business and Professions Code – The Psychology Licensing Law is found in the California Business and Professions Code, starting with Section 2990 through 2999.  

A corporate lawyer that specializes in psychological corporations can help you understand these specific State laws and codes so that you can be sure that your private practice can abide by them correctly.  

Want to read more about these State laws and codes? You can read about them by clicking here! [hyperlink: http://www.psychology.ca.gov/laws_regs/2018lawsregs.pdf ] 

Do I Have to Follow Any Name style Formalities When Forming a Psychological Corporation? 

The name of a professional corporation must comply with California Business and Professions Code 2902 and 2908.  

In choosing a name for your psychological private practice, make sure that it contains any of the following words: “psychology,” “psychological,” “psychologist,” “psychology consultation,” “psychology consultant,” “psychometry,” “psychometrics” or “psychometrist,” “psychotherapy,” “psychotherapist,” “psychoanalysis,” or “psychoanalyst.” There should also be wording or abbreviations in the company’s name that denotes its corporate existence. 

Are Psychological Private Practices Allowed to Use a Doing-Business-As (DBA) or Fictitious Name?   

Yes. The California Board of Psychology allows psychological professional corporations to use a fictitious name.  

Are Bylaws Necessary in a Professional Psychological Corporation in California? 

Definitely! All professional corporations must have bylaws. These are established at the formation of the company so that the private practice can function efficiently. Without a properly defined set of bylaws, many avoidable corporate problems could arise.  

Who can be a shareholder in a Psychological corporation? 

Below are licensed professionals that can be shareholders, officers, directors, or employees of a psychological corporation:  

1. Licensed physicians and surgeons. 
2. Licensed doctors of podiatric medicine. 
3. Registered nurses. 
4. Licensed optometrists. 
5. Licensed marriage and family therapists. 
6. Licensed clinical social workers. 
7. Licensed chiropractors. 
8. Licensed acupuncturists. 
9. Naturopathic doctors. 
10. Licensed professional clinical counselors. 
11. Licensed midwives. 

The sum of all shares owned by those licensed persons must not exceed 49 percent of the total number of shares of the company. Also, the number of licensed persons owning shares in the corporation must not exceed the number of persons licensed by the governmental agency regulating the designated professional corporation. This rule does not limit employment by the psychological private practice to only those licensed professionals mentioned. 

Additionally, a psychologist can be a shareholder in more than one professional corporation.

Can anyone serve as an officer or director of a psychological professional corporation in California? 

Unfortunately, no. These offices depend on the number of shareholders in the corporation. Each shareholder, director, and officer of a psychological corporation, except an assistant secretary and an assistant treasurer, must be a licensed person as included in the list of allowed shareholders. 

Psychological private practices that only have one shareholder, only need one director. That same shareholder can serve as the director, president, and treasurer of the company. In this kind of situation, the other officers of the corporation do not need to be licensed persons.  

A psychological corporation that only has two shareholders only needs two directors, which can be the two shareholders themselves. These two shareholders, between themselves, may fill the offices of the president, vice president, secretary, and treasurer. 

 

Psychologists Also Ask

 

Start a Psychological Private Practice in California! Consult a Lawyer that Specializes in Professional Corporations for Psychologists!  

Incorporation Attorney is widely experienced in forming professional corporations, especially psychological private practices. If you are a psychologist and you need expert help in starting your own psychological corporation, call us today at +1 (714) 634-4838!    

 

Full California Law- text   

We’re working on adding more to this content right now!