How To Start A Mental Health Practice In Missouri

1. Local Zoning Laws and Regulations in Missouri

Missouri consists of 114 counties and various municipalities, each with its own zoning ordinances. It is essential to familiarize yourself with the local zoning regulations before finalizing a location for your therapy practice, even if you intend to operate from your residence. This step is necessary to ensure that your business activities align with the permitted land use in the chosen area.

If you plan to establish your therapy practice in a location where commercial operations are typically not allowed, such as a residential neighborhood, you may have the option to apply for a zoning variance. A zoning variance provides an exception to the established zoning laws, allowing you to operate your business in an area that deviates from the usual requirements.

To determine whether you need to apply for a variance, understand the specific zoning requirements for your desired location, and identify the types of business activities permitted, it is recommended to contact your local municipality. They can provide accurate information and guidance regarding zoning regulations in Missouri, ensuring that you comply with the necessary guidelines when establishing your therapy practice.

2. Business Name Search in Missouri

In Missouri, business names are registered and managed at the county level, adhering to the state’s specific laws and regulations.

If you operate your therapy practice as a sole proprietorship and plan to use your personal name (e.g., “Jane Smith”) as your business name, there is typically no requirement to register a separate business name.

However, if you wish to use a name other than your own (e.g., “Jane Smith Counseling”) or if you decide to change your business structure, such as forming a professional corporation, you will need to register a Fictitious Name (DBA) in Missouri.

It’s important to note that the term “fictitious” does not imply misleading information. Once your DBA is registered, it becomes the legally recognized name under which your business can operate in Missouri.

To register a DBA for your therapy practice in Missouri, follow these steps in accordance with state laws:

1. Perform a name search: Conduct a thorough search to ensure that the desired business name is not already in use by another entity in Missouri.
2. File a Fictitious Name registration: Obtain the necessary registration form from the county clerk’s office. Provide your personal name, address, the DBA you wish to register, your practice’s address, your state ID number, and the type of business.
3. Publish the new business name: Missouri does not typically require publication of the DBA statement in newspapers. However, it’s advisable to check with the county clerk’s office for any specific publication requirements.
4. Pay filing fees: The filing fees for registering a DBA vary depending on the county in Missouri where you are registering your business name.
5. Renew periodically: In Missouri, DBAs typically need to be renewed periodically. Check with the county clerk’s office for the specific renewal requirements.

3. Business Structure in Missouri

It’s worth noting that Missouri may have its own requirements and regulations regarding naming conventions for licensed therapists. Ensure compliance with these guidelines when selecting a business name for your therapy practice.

When establishing a therapy practice in Missouri, it’s important to select the appropriate business structure, as it has implications for taxation and ownership. Therapists in Missouri have different options to consider:

Sole Proprietorship:
By default, when you start a business on your own, it is considered a sole proprietorship. In this structure, your personal and business finances are interconnected. All income and losses are attributed directly to you as the owner. However, it’s essential to note that a sole proprietorship does not offer legal or financial protection.

Professional Corporation:
Missouri allows therapists to form a professional corporation, which is a distinct legal entity separate from its owners. There are two types of professional corporations: C corporations and S corporations. C corporations are taxed separately from their shareholders, while S corporations pass the tax liability to individual shareholders. It is common for therapists to form S corporations at the federal level due to various reasons, including tax benefits.

A professional corporation provides personal liability protection for each shareholder against malpractice lawsuits while safeguarding the corporation as a whole from liability.

Consulting with an accountant and, if necessary, a lawyer is important to determine the most suitable business structure for your therapy practice, taking into account the specific laws and regulations in Missouri.

4. Register Your Business in Missouri

To register your business in Missouri, the process may vary depending on the type of business structure you choose. Here’s an overview of the registration steps for each structure:

1. Register a Sole Proprietorship in Missouri:

• Choose a Business Name: Select a unique name for your sole proprietorship. You can use your own name or a fictitious business name (DBA) if you want something different.
• Obtain Necessary Permits and Licenses: Certain industries may require specific permits or licenses to operate legally. Check with the appropriate Missouri regulatory agencies to determine if your business needs any additional permits.
• Register with the Missouri Secretary of State: As a sole proprietorship, you are not required to register with the state. However, if you choose to use a fictitious business name, you must file a registration form with the Missouri Secretary of State’s office.

2. Incorporate in Missouri:

• Choose a Business Name: Select a unique name for your corporation in accordance with Missouri naming requirements. The name should include a corporate identifier like “Corporation,” “Incorporated,” or an abbreviation thereof.
• File Articles of Incorporation: Prepare and file Articles of Incorporation with the Missouri Secretary of State. This document contains essential information about your corporation, such as its name, purpose, registered agent, and incorporators.
• Appoint Directors and Officers: Determine the individuals who will serve as directors and officers of the corporation. Their names and addresses may be required during the registration process.
• Obtain an Employer Identification Number (EIN): If your corporation has employees or is required to file certain tax returns, you will need to obtain an EIN from the Internal Revenue Service (IRS).
• Comply with Ongoing Requirements: Once incorporated, your corporation must comply with various ongoing requirements, such as holding annual meetings, maintaining proper corporate records, and filing annual reports with the Missouri Secretary of State.
• You can complete many of these registration steps online through the Missouri Secretary of State’s website.

Note: It’s recommended to consult with a business attorney or a professional service to ensure compliance with all legal requirements and to receive personalized guidance based on your specific circumstances.

5. Business Licenses & Permits in Missouri

To operate your therapy practice in Missouri, it is important to understand the licensing and permitting requirements at the federal, state, and local levels:

Federal Level: Generally, therapy practices do not require any special federal permits or licenses to operate in Missouri. However, it’s important to comply with any applicable federal regulations related to healthcare, privacy (HIPAA), and professional standards.

State Level: Individual therapists practicing in Missouri must obtain the necessary state licenses to provide therapy services. This typically involves meeting educational and training requirements, passing examinations, and fulfilling ongoing professional development obligations. Contact the Missouri Division of Professional Registration or the appropriate licensing board for therapists in the state to learn about specific licensing requirements.

Local Level: Depending on the county and municipality where your therapy practice is located, you may be required to obtain a business license or permit to operate legally. The specific licensing requirements and fees vary by local jurisdiction. Contact the local government bodies, such as the county clerk’s office or city hall, to inquire about the necessary business license or permit for your therapy practice. The fees for a business license in Missouri can vary depending on the location and the size of your business.

It’s important to stay updated on any changes or additional requirements in licensing and permitting regulations by regularly checking with the relevant federal, state, and local authorities. Additionally, consulting with a business attorney or professional service familiar with Missouri regulations can provide further guidance and ensure compliance with all applicable requirements.

6. Business Insurance in Missouri

Therapy practices operating in Missouri are advised to consider the following types of business insurance:

1. General liability insurance: This coverage protects your therapy practice in the event of property damage or bodily injury caused to others. It is essential to have sufficient coverage considering that Missouri does not impose a cap on liability lawsuit awards. A recommended coverage amount is at least $1 million.
2. Commercial property insurance: This insurance safeguards your therapy practice’s property, including office equipment, furniture, and supplies. It also provides coverage for the building where your practice is located, whether owned or rented.
3. Business income insurance: Business income insurance provides coverage for lost income in situations such as natural disasters (e.g., fire, storms) or man-made incidents (e.g., theft). It helps to mitigate financial losses during periods of business interruption.
4. Missouri worker’s compensation insurance (if you have employees): If your therapy practice has employees, it is mandatory to have worker’s compensation insurance in Missouri. This coverage assists in covering medical expenses, lost wages, and ongoing care in case of work-related injuries or illnesses suffered by your employees.

Consider obtaining a business owner’s policy (BOP) as it combines essential coverage types, including general liability, commercial property, and business income insurance, into a single package.

To determine the appropriate coverage options for your therapy practice in Missouri, it is advisable to consult with an insurance agent who specializes in business insurance. They can assess your specific needs and provide personalized guidance to ensure you have the most suitable insurance coverage.

7. Business Taxes in Missouri

Every business earning income in Missouri is required to pay state taxes. If your business’s tax liability exceeds a certain threshold, you may be required to make quarterly tax payments.

To begin the process of paying taxes in Missouri, it is important to familiarize yourself with the state’s tax laws and requirements specifically applicable to therapists.

If you operate your therapy practice in multiple states or plan to move your practice from Missouri to another state, it is crucial to understand the tax implications and obligations in each jurisdiction. Tax laws can differ based on the states in which you operate and the length of your presence in each state.

To ensure compliance and accurate filing of your business taxes, it is recommended to seek the guidance of a tax professional or accountant who specializes in Missouri tax laws and regulations. They can provide personalized advice based on your unique circumstances, helping you navigate the complexities of paying taxes as a therapist in Missouri.