Starting a Counseling Private Practice in Texas

Starting your counseling private practice is a career move that is a step into professional independence. It’s where clinical work meets entrepreneurship, where values begin shaping the practice environment, and where your presence can directly support your community’s mental health needs.

Counseling Private Practice in Texas

When it comes to private practice in Texas, they don’t have this process as vague or casual. With over 250 counties and more than 1,200 municipalities, Texas is known for its layered and well-defined requirements when it comes to establishing a small business. The state’s size, diversity, and local governance structure means that there are variations across, what works in Houston may not work in El Paso. Texas lays out detailed, step-by-step compliance routes to ensure that practitioners understand their responsibilities clearly for, zoning laws, business structures, licensing protocols, and even local permits.

These guidelines are not arbitrary, they are issued and enforced by a combination of state-level agencies and professional boards that oversee business practices, public safety, and mental health care in Texas.

The Texas Secretary of State handles business formation and registration, while the Behavioral Health Executive Council (BHEC) regulates licensing and compliance for mental health professionals, including LPCs, LMFTs, LCSWs, and psychologists.

Additionally, the Texas Department of Insurance oversees liability and workers’ compensation policies, and local municipal governments enforce zoning and business permit laws. Together, these entities ensure that therapy practices operate legally, ethically, and with the public’s best interests in mind.

What makes Texas Special

What sets Texas apart is not only the rigor but the accessibility of its systems, the Secretary of State provides online portals for business filings, and each licensing board has dedicated support staff for applicants. Texas’ approach balances autonomy with accountability. While you have the freedom to shape your clinical style, office space, and caseload, you are also held to structural standards that protect clients, professionals, and communities alike.

Here are the steps to setting up a Counseling Private Practice in Texas

Step 1: Zoning

Let’s say you have a spare room, a cozy chair, maybe even a calming salt lamp. But before you start imagining therapy sessions there, ask yourself the question- is it even legal to run a counseling private practice from home in your city?

In Texas, zoning laws vary wildly across more than 1,200 municipalities. What’s perfectly fine in one city could be prohibited in another.

Case in point: let us say you live in Dallas and want to convert your garage into a therapy office. Your neighborhood, however, is zoned strictly residential. Unless you get a zoning variance, you may not be allowed to meet clients there — even if they park on the street.

What to do:

Contact your local zoning or planning department.
Ask about home-based business rules.
Check whether client visits, signage, or office hours are restricted.

And yes, even telehealth-only practices might still need approval if you’re running the business out of your home.

Step 2: Choosing and Registering a Practice Name

Your practice name isn’t just administrative — it is part of your brand. Whether you use your name (e.g., “Dr. Gargi, Psychologist”) or something more creative like “ThriveWell Therapy,” that name carries your identity into the community.

In Texas:

If you’re using your full legal name, no registration is needed.
If you’re using a business name (“Safe Harbor Counseling”), you’ll need to register it as an Assumed Name or “DBA” (Doing Business As).

How to register:

Sole proprietors file with the County Clerk.
LLCs, PLLCs, and corporations file with the Texas Secretary of State.

Use the SOSDirect tool to check name availability and register online.

Step 3: Choosing the Right Business Structure

This step shapes how you are taxed, protected legally, and how flexible your practice can be. Many new therapists stick with a sole proprietorship out of simplicity — but that also means you’re personally liable if something goes wrong.

Common options for mental health professionals:

1. Sole Proprietorship

No extra paperwork.
No liability protection.

2. PLLC (Professional Limited Liability Company)

Offers some protection for your personal assets.
Popular among solo practitioners.
File Form 206 with the state.

3. PA (Professional Association)

Similar to a corporation.
Good for therapists working in groups.
File Form 204.

4. LLP (Limited Liability Partnership)

Must have two or more licensed professionals.
Offers liability protection for each partner.

Step 4: Official Business Registration

Once you’ve decided on your entity, it’s time to make it official. Here is what that usually looks like for a PLLC:

Choose a business name.
Appoint a registered agent (someone with a physical Texas address to receive legal documents).
Submit Form 206 (Certificate of Formation).
Pay a $300 filing fee.
Register via the SOSUpload system.

Note: You may owe a franchise tax if your business makes more than $1.18M annually. If you’re starting small, this likely will not apply — but check with an accountant to be sure.

Step 5: Business Licenses and Permits

Texas doesn’t require a general state license to open a therapy business. However, your city or county might — especially if you are operating from home.

Also:

Double-check that your clinical license (LPC, LMFT, etc.) is active.
Ask your local clerk’s office if a home occupation permit or small business license is needed.

Don’t skip this step. A surprise inspection or notice down the line can be costly and disruptive.

Step 6: Protecting Yourself with Insurance

Even if you’re seeing just a few clients a week, you need insurance. Full stop. It is a layer of protection that keeps small mistakes from becoming huge problems.

Must-have policies:

Professional Liability Insurance (Malpractice) – Covers client lawsuits or complaints.

General Liability Insurance – Covers accidents (e.g., someone trips in your office).

Commercial Property Insurance – Covers stolen laptops, fire damage, or vandalism.

Business Owner’s Policy (BOP) – A bundle of general + property + income loss insurance.

Workers’ Comp – Optional in Texas unless you hire employees — but wise to have if you expand.

Step 7: Sorting Out Taxes and Finances

Yes, therapy is emotional work, but counseling private practice is also financial work.

Here is what you will need to do:

Get an EIN (Employer Identification Number) from the IRS. It’s free and can act like your business’s SSN.
Open a business bank account, don’t mix personal and business funds.
Decide on your fee structure. Will you accept insurance? Offer sliding scale? Take online payments?
Keep detailed financial records.
Work with a CPA familiar with therapy practices to plan for:
- Self-employment tax
- Quarterly payments
- Business deductions (office supplies, supervision, CEUs, etc.)

Try Mentlayc for Free

Common misstep: Not saving for taxes. Many new therapists underestimate what they owe and get caught off-guard in April.

Step 8: Setting Up Your Physical or Virtual Office

Where you practice influences who shows up and how they feel.

If in-person:

Check zoning laws and parking availability.
Prioritize confidentiality — soundproofing, private exits, etc.
Make the space warm, clean, and professional.

If virtual:

Choose a HIPAA-compliant platform (like SimplePractice or Zoom for Healthcare).
Clarify licensing rules, in most cases, you must be licensed in the state where your client is located during the session.
Have backup plans for tech issues or emergencies.

Step 9: Stay Compliant With Ethical and Legal Requirements

Every therapist in private practice is also an ethical decision-maker. Without a supervisor or agency policy, it’s up to you to hold your standards.

Make sure you:

Use clear, written informed consent forms.
Understand the limits of confidentiality, especially with minors, suicidality, or abuse reporting.
Avoid dual relationships.
Set healthy cancellation and no-show policies.
Stay current with HIPAA laws and secure documentation.

Consider consulting with a mental health attorney to create your forms or review them yearly.

Step 10: Don’t Forget CEUs and Renewal Requirements

Texas requires mental health professionals to complete regular continuing education to maintain their licenses.

Typical expectations:

LPCs and LMFTs: 24 hours every 2 years (including ethics)
LCSWs: 30 hours (including cultural competency and ethics)
Psychologists: Requirements vary

Keep track of all certificates, dates, and topics — and store backups.

Step 11: Marketing

Even the most skilled therapist can’t build a full caseload if no one knows they’re available.

Steps to start:

Build a simple, professional website with your bio, services, location, fees, and contact info.
Claim your Google Business Profile so that local clients can find you.
Join therapist directories (Psychology Today, TherapyDen, Open Path).
Connect with other professionals in your area, primary care doctors, psychiatrists, schools, clergy.
Show up with authenticity. Clients want to know what you’re like before they sit on your couch (or open their laptop).

Running a private practice can be deeply fulfilling but it can also be really isolating. We are not just a clinician anymore, we are also a business owner, admin, marketer, biller, and janitor all rolled into one. Without intentional support systems, burnout can creep in quietly.

Here’s how to safeguard yourself:

Create or join peer consultation groups – regular check-ins with other therapists offer space for case discussions, ethical dilemmas, and emotional support.
Invest in your supervision or mentorship, especially in the first year of business – even clinicians with years of experience can benefit from guidance when transitioning into private practice.
Schedule admin days and honor them – try to block time each week to catch up on notes, billing, emails, and planning. Don’t let business tasks spill into every evening.
Consider hiring virtual support (e.g., a part-time assistant or biller) once your caseload grows. Delegating small tasks early can prevent long-term overwhelm.
Prioritise your own therapy – it keeps you grounded and emotionally regulated, especially when your caseload gets heavy.

Conclusion

Private practice will grow with you, challenge you, and, if done mindfully, nourishes both you and your clients in lasting ways. How an individual sets up counseling private practice may vary, for some, it begins with one client and a borrowed room. For others, it starts with a full plan and a brand name. There’s no perfect blueprint. What matters most is that you build a practice that reflects your integrity, meets your community’s needs, and sustains you, financially, emotionally, and ethically.

Helpful Resources

Texas Secretary of State
Texas Behavioral Health Executive Council (BHEC)
Texas State Board for LPCs
IRS EIN Application
Belongly Therapist Community

Warnes, B. (2024, March 9). How to start a therapy practice in Texas. Heard. Retrieved June 27, 2025.

Starting a counseling private practice in Texas: A comprehensive guide. (n.d.). Practice of the Practice. Retrieved June 27, 2025.

Texas Behavioral Health Executive Council. (n.d.). Licensing and regulatory information for Texas mental health professionals.

Texas Secretary of State. (n.d.). SOSDirect business filings and registration services.

Texas Comptroller of Public Accounts. (n.d.). Franchise tax overview.

Texas Department of Insurance. (n.d.). Workers’ compensation insurance requirements.