How To Start A Mental Health Practice In Pennsylvania

1. Local Zoning Laws and Regulations in Pennsylvania

Pennsylvania boasts 56 counties and 2560 municipalities. Before you settle on a location for your therapy practice—even if that location is your own home—you must make sure the local zoning allows you to operate there.
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In cases where you aren’t typically allowed to operate a business in a certain area—for instance, a home business in a residential area—you can apply for a zoning variance. A variance is more or less an exception to zoning laws.
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For information on whether you need to apply for a variance, what types of zoning your town or city recognizes, and what kind of business you can perform there, contact your local municipality.

The most popular city, Philadelphia. Here is link to check its zoning, planning, and development:
https://www.phila.gov/services/zoning-planning-development/find-location-and-zoning-information/

2. Business Name Search in Pennsylvania

In Pennsylvania, it costs $70 to register an assumed name for your business. Here are the detailed fees and payments. The fastest and easiest way to register your business name is through the Pennsylvania Department of State.

If you’re a sole proprietor planning to do business under a name different from your “real and true” name—that is, your personal name as it appears on legal documents—you must register an assumed name. General partnership names must include the names of all partners, or else register an assumed name.

Before registering a name, check the record searches rule. Note that, while Pennsylvania’s name search tool allows you to search at the state level, since names are registered on a county by county basis, it’s possible for multiple businesses with the same name to operate, but in different counties. When you register your business name, you can opt to have it registered in all counties at no extra charge.

3. Business Structure in Pennsylvania

• The type of business structure you choose for your practice affects how your income is taxed and who may own shares in the practice. Each state has different business structures available for registration.
• *Only individuals working in regulated professions, which includes mental healthcare workers, are allowed to become members or shareholders.
• Sole Proprietorship
  • By default, when starting a business on your own, you are classified as a sole proprietor. This type of business structure is the most basic, as there is no legal or financial protection offered. Your business is not considered separate from yourself, meaning that any revenue or losses are directly tied to you personally.
• General Partnership
  • In a general partnership, all partners are considered general partners, meaning that they share legal and financial liability equally.
• Business Corporation
  • A profit corporation is a kind of corporation that is separate from its owners, who own shares in it. It can be one of two types: C corporation or S corporation. C corporations have their income taxed separately from the income of the shareholders, while S corporations pass on the tax liability to each shareholder. If a C corporation wants to become an S corporation. we recommends its clients form S corporations at the federal level for various reasons.
  • Individuals practicing certain professions are required to establish professional service corporations. A professional service corporation operates similarly to a business corporation but offers greater protections for shareholders in the event of a malpractice suit. To form a professional service corporation, all shareholders must be licensed and practicing the same profession.
• Limited Liability Company (LLC)
  • The LLC business structure provides limited liability protection like a corporation, but allows for flexibility in how it is taxed. Your accountant may suggest electing to be taxed as an S corporation or partnership depending on your circumstances.
• Professional Limited Liability Company (PLLC)
  • The PLLC business structure is similar to the LLC, but every member must be licensed by the state and provide certification when filing articles of formation with the Department of State. Therapists meet the requirements for licensed professionals. This structure offers additional legal protection for all members in the event of litigation brought against the organization, such as a malpractice suit from a patient.
• Limited Partnership (LP)
  • A limited partnership provides liability protection only for some of its members. To function as a limited partnership, there must be at least one general partner who is responsible for managing the partnership and making significant decisions, as well as at least one limited partner who is not involved in management and has limited liability. General partners have unlimited liability and are personally responsible for partnership debts, legal actions, and other obligations. Limited partners, on the other hand, are only responsible for their respective share of the partnership.
• Limited Liability Partnership (LLP)
  • An LLP, or Limited Liability Partnership, is a type of partnership that provides additional protection to its partners. It is frequently used by professionals such as lawyers, accountants, and therapists. The LLP structure safeguards each partner against the consequences of other partners’ professional misconduct. If one partner is sued by a client, the other partners are not held liable. In essence, it is the professional equivalent of a general partnership.
• Limited Liability Limited Partnership (LLLP)
  • The LLLP business structure is almost identical to the LLP business structure. The key difference is that a general partnership can opt to register as an LLP, while a limited partnership can choose to register as LLLPs.

4. Register Your Business in Pennsylvania

To register your business in Pennsylvania, you need to do two things:

1. File the business registration with the State
2. Pay the filing fee. For a complete list of fees, see the Pennsylvania Department of State Fees and Payments.

Form a sole proprietorship in Pennsylvania

Filing fees:No cost to form, fees apply to register an assumed name
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Aside from registering an assumed name, there are no extra steps you need to take in order to form a sole proprietorship in Pennsylvania.

Form a general partnership in Pennsylvania

Filing fees: No cost to form, fees apply to register an assumed name
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Aside from registering an assumed name, there are no extra steps you need to take in order to form a general partnership in Pennsylvania. Consider drafting a partnership agreement in order to easily resolve any future disputes between partners.

Incorporate in Pennsylvania

Filing fees: $125 to file Articles of Incorporation

1. Choose a business name.
2. Appoint a registered agent. This person must be over 18 and have an address within the state. They’re responsible for receiving all official communications from the State.
3. File your Articles of Incorporation and pay the fee using the Pennsylvania Department of State Fees and Payments

Once you’ve incorporated in Pennsylvania, you can elect S corporation status by filing the form.

Register a Limited Liability Company (LLC) in Pennsylvania

Filing fees: $125 to file Articles of Organization

1. Choose a business name.
2. Appoint a registered agent. This person must be over 18 and have an address within the state. They’re responsible for receiving all official communications from the State.
3. File your Articles of Organization and pay the fee using the Pennsylvania Department of State Fees and Payments

Register a Limited Partnership (LP) in Pennsylvania

Filing fees: $125 to file a Certificate of Partnership

1. Choose a business name.
2. Appoint a registered agent. This person must be over 18 and have an address within the state. They’re responsible for receiving all official communications from the State.
3. File a Certificate of Partnership and pay the fee using the Pennsylvania Department of State Fees and Payments
4. Draft a partnership agreement. This isn’t required by law in the State of Pennsylvania, but it will help you stay organized and settle any disputes between partners.

Register a Limited Liability Partnership (LLP) in Pennsylvania

Filing fees: $125 to file a Certificate of Partnership

1. Choose a business name.
2. Appoint a registered agent. This person must be over 18 and have an address within the state. They’re responsible for receiving all official communications from the State.
3. File a Certificate of Partnership and pay the fee using the Pennsylvania Department of State Fees and Payments
4. Draft a partnership agreement. This isn’t required by law in the State of Pennsylvania, but it will help you stay organized and settle any disputes between partners.

5. Business Licenses & Permits in Pennsylvania

To operate in Pennsylvania, your therapy practice may require licenses or permits. These are handled at the federal, state, and local levels.

Luckily, therapy practices do not need any special federal permits or licenses to operate in Pennsylvania. And, outside of standard licensure for mental health practitioners, they also do not require permitting or licensing at the state level.
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At the local level—meaning your municipality (town, city, etc.), you may be required to purchase a business license to operate. Contact your local permitting office for details.

You can do a search of all 1,500 licenses administered at the State level using Pennsylvania’s Business Filing Service.

6. Business Insurance in Pennsylvania

The following types of business insurance are highly recommended for therapy practices operating in Pennsylvania:

• General Liability Insurance
• Commercial Property Insurance:
• Business Income Insurance
• Professional Liability Insurance
• Pennsylvania worker’s compensation insurance

While shopping for insurance, look for a business owner’s policy (BOP). A BOP typically includes the three core types of insurance coverage: general liability, commercial property, and business income.

General liability insurance protects you in case of any damages you cause to someone else’s property or person. Since the State of Pennsylvania puts no cap on liability lawsuit rewards, it’s important to make sure you’re well-covered. Aim for at least $1 million coverage.

Commercial property insurance protects property your therapy practice owns, like computers, business phones, or office furniture. It also protects the building where you operate, whether owned or rented.

Business income insurance covers you for loss of income due to specific circumstances. These include natural disasters, such as fire or storm damage; and man-made disasters, like theft.

Professional liability insurance covers you in case you are sued for libel or slander, for mishandling patient records, for providing inaccurate advice, or for otherwise causing harm in the process of practicing your profession.

If you have employees, you’re legally required to cover them with Pennsylvania worker’s compensation insurance. This pays for medical expenses, lost wages, and ongoing care in the event one of your employees is injured on the job.

7. Business Taxes in Pennsylvania

Every business earning income in Pennsylvania is required to pay state taxes. If you owe over $1,000 in state taxes, you’re required to pay that amount in quarterly installments.

Check the Pennsylvania Government Business Tax e-Service.