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Opening a private practice in California: what the rules actually require, in order.
Sixteen items between a license and a first private client, each with the rule it comes from and the page here that goes deeper. Tick them as you go; the ticks stay in this browser and nowhere else. Nothing here is legal advice, and the sources are the Board’s statutes and the federal rules themselves.
The list →The list
Sixteen things, each with the rule that makes it one.
The Board’s items apply to every license it issues; the section numbers cited are the LMFT ones with the LCSW, LPCC and LEP parallels named in the rule text. Federal items apply to every practice. The city item is the one this page cannot source for you.
| Done | Item and rule | Source | Goes deeper |
|---|---|---|---|
| Choose the entity: sole proprietor or professional corporation An LLC is closed to California-licensed MFTs, LCSWs, LPCCs and psychologists (Corp. Code §17701.04(e)). The choice is sole proprietorship or a professional corporation, which may elect S-corp treatment; the corporation costs $800 a year from year two whatever it earns. | Corp. Code §17701.04 | The corporation costs $800 before you see a client | |
| If the practice trades under a name that is not yours, disclose the owner A licensee who owns a business under a fictitious business name may not use a name that is false, misleading or deceptive, and must tell the client, before treatment starts, the name and license designation of the owner or owners (B&P §4980.46 LMFT; §4992.10 LCSW; §4999.72 LPCC; §4989.47 LEP). The county filing itself is under B&P §17910. | B&P §4980.46 | The BBS advertising rule: a checklist | |
| Get an Employer Identification Number Free, online, from the IRS in one sitting. A sole proprietor may use a Social Security number instead, but an EIN keeps it off superbills and W-9s; a corporation must have one. | IRS | How much of my tax bill is optional? | |
| Get a National Provider Identifier Free, from CMS’s NPPES. Every insurance claim, every superbill a client submits, and every credentialing application asks for it; it is the number that follows you between employers and practices. | CMS NPPES | The insurance navigator | |
| Display the license where you practice in person A licensee shall display their license in a conspicuous place in the primary place of practice when rendering services in person (B&P §4980.31; §4996.7; §4999.70; §4989.48). | BBS display and notice sheet | California LMFT license renewal checklist | |
| Give every client the Notice to Clients, and document it Written in at least 12-point type, before services start or as soon as practicable: the Board receives complaints, its web address and phone. From 1 July 2025 it must also carry your full name as filed with the Board, license number, license type and expiration date, and delivery must be documented (B&P §4980.32; §4996.75; §4999.71; §4989.17). | B&P §4980.32 | The Notice to Clients generator: the statute’s words, your details | |
| Disclose the fee, or how it is computed, before treatment Failing to do so is unprofessional conduct for every license the Board issues (B&P §4982(n); §4992.3(o); §4999.90(n); §4989.54(o)). Put it in the consent paperwork; a later change is a changed basis. | B&P §4982 | The fee-increase calculator | |
| Give self-pay clients a good faith estimate Under the No Surprises Act rule at 45 CFR 149.610, uninsured and self-pay clients get a written estimate of expected charges, and a new one when the charges change. | 45 CFR 149.610 | The good faith estimate builder: every required element, printed | |
| Post and hand out a Notice of Privacy Practices A HIPAA covered entity provides its notice at first service, posts it where clients can see it, and on its website if it has one (45 CFR 164.520). Whether you are a covered entity turns on electronic transactions with payers; most practices that bill insurance are. | 45 CFR 164.520 | Am I a HIPAA covered entity? The self-check | |
| Check every advertisement against the Board’s rule License type and number in every ad, the trainee and associate disclosures, and the April 2026 changes. The site’s checklist goes item by item. | BBS advertising guide | The BBS advertising rule, effective April 2026 | |
| If you will see anyone by video, meet the telehealth requirements Consent to telehealth obtained and documented; the risks and limits explained; your license number and type provided; the client’s location and emergency resources established each session. The Board’s own guidance sheet is the source. | BBS telehealth guidance | Can a California therapist work remotely? | |
| Decide on liability insurance No law requires it of a solo practice; every payer contract and most office leases do, and the site’s page shows the published premiums and what a Board defense costs. | This site’s liability page | Liability insurance for a California therapy practice | |
| Set up how records are kept, for seven years Records are retained at least seven years from the date therapy ends; for a minor, seven years after the client turns 18. Written or electronic (B&P §4980.49; §4993; §4999.75; §4989.51). Choose the record system before the first note, not after. | B&P §4980.49 | The records-request deadline and retention-date calculator | |
| Tell the Board your new address within 30 days Every licensee and professional corporation keeps a current mailing address with the Board and reports any change within 30 days, old and new (16 CCR §1804); email address changes within 30 days too (B&P §4990.07). | 16 CCR §1804 | California LMFT license renewal checklist | |
| Ask your city about business tax registration Cities register businesses and charge business tax on their own terms; this page does not state any city’s rule. The city’s finance or treasurer’s office is the source, and the answer belongs in your file. | Your city | What a therapy office costs in the Bay Area | |
| Start the estimated-tax calendar A sole proprietor with no withholding pays federal and California estimates four times a year, California’s split 30–40–0–30; a corporation pays estimates from its first year. The calculator dates them on your profit. | IRS and FTB, via the calculator | The estimated tax calculator |
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Why this order
Entity first, numbers second, paper third, calendar last.
The EIN, the NPI, the bank account and the payer applications all ask what kind of business you are. Deciding after they are filed means filing them twice.
Both are free and same-day; both are on every form that follows.
The Notice to Clients, the fee disclosure, the good faith estimate and the privacy notice are all “before services” rules. One intake packet, checked once against each rule, covers them.
Estimated taxes, the 30-day address rule, the seven-year records clock and the renewal cycle are the recurring part; the compliance calendar page turns them into dates.
Then what
The rules are met. These pages price the practice they now govern.
What the first year costs
The first-year practice budget
Nine overhead lines, each a published price, and the sessions a month that cover them.
The insurance decision
The insurance navigator
Whether to panel, with whom, and what each network actually pays.
The week itself
My practice desk
The weekly operating desk, and the compliance calendar that goes with it.
The other end
Closing a practice, with the professional will
The duties that outlive a practice, and the four items to write while nothing is wrong.
Where every figure came from
Sources.
The Board’s rules
- Board of Behavioral Sciences, Statutes and Regulations — §4980.31 display, §4980.32 notice, §4980.46 fictitious names, §4980.49 records, §4982(n) fee disclosure, 16 CCR §1804 addresses, B&P §4990.07 email, and the LCSW, LPCC and LEP parallels; read 4 September 2026
- BBS, Display of License/Registration Requirements and Required Notice to Consumers
- BBS, Advertising Requirements Fact Sheet & FAQ
- BBS, Are You Going to Provide Telehealth Services in California?
Federal
Section numbers are given for the LMFT Act; the parallel LCSW, LPCC and LEP sections are named in each item. City business-tax rules are not stated here. Nothing on this page is legal advice.
