Starting up a new business can be very exciting! You get to plan where you want your business to be located, what you want it to look like, what you want to name it, and make other fun decisions. Then there are the steps that you take because it’s part of running a business. When starting a new business, there are certain steps that are important to make sure that you are complying with the laws and protecting yourself.

Clinical psychology businesses have their own procedure that they need to follow. This post will take you through each step involved in starting a clinical psychology business so you can get an idea of the process.

Step 1: Get your license.

This may be a pretty obvious one, but it is also very important. You can’t really do much to create a clinical psychology business until you have your license. The Clinical Psychologist Licensing Act lays out all of the important licensing laws. 225 ILCS 15/. To get your license, you must be over 21, complete a doctoral program from an accredited school, have a record clear of certain (criminal) conduct, submit an application, and pay the required fee. 225 ILCS 15/10.

If you already have your license, congratulations! That is quite an accomplishment, and deserves celebration. You are also ready to move onto the next step, starting the business.

Step 2: Filing with the Secretary of State.

You can choose to run your business as a Partnership / Sole Proprietorship, LLC, or Corporation. However, you are not protected from liability for accidents or other problems that may arise if you are in a partnership / sole proprietorship. You can read more about the advantages and disadvantages to all of these business entities in our blog post “LLC, Corporation, Partnership: What Kind of Business Is Right for Me?” There have been significant changes since we published this post, namely the institution of PLLCs. Click here for more up-to-date information. For this post, we will focus on the typically preferred methods, LLCs and Corporations.

LLCs are formed under the Illinois Limited Liability Company Act. 805 ILCS 180/. Professional Corporations are formed under the Illinois Professional Service Corporation Act. 805 ILCS 10/. Both of these statutes have certain rules about what you can and cannot do in your business. For example, all of the business owners (and certain types of employees) have to be licensed clinical psychologists. 805 ILCS 180/1-28; 805 ILCS 10/3.4.

**It is important to note that you cannot start operating your business or soliciting clients until you have obtained a business license according to the next step.**

**There have been significant updates in the law since this article was written. Read about it here: Forming A PLLC; IDFPR Cracking Down: PLLC vs LLC **

Step 3: Get Your Business License.

Clinical Psychology Businesses are regulated by the Illinois Department of Financial and Professional Regulation. Because they are regulated by Illinois, they do not need to get a separate license from Chicago (or whatever Illinois city your business is in). For a full list of professions that are run by the IDFPR and do not need licenses from Chicago, you can go to the City of Chicago’s Website.

However, this means that you do have to get a license from the IDFPR. You can get a psychology business license, and other information about the license, at the IDFPR Website.

Step 4: Display all of your licenses and renew when necessary.

Once you have the licenses, you do need to display them prominently in your office. 225 ILCS 15/3(i); 805 ILCS 180/1-28. Somewhere where individuals can see them when they walk in is ideal, especially for the business license.

Once your business is up and running, you still need to follow the rules in the Clinical Psychologist Licensing Act, 225 ILCS 15/, and the laws that govern your business entity. One of the most important things to do is renew your business and license annually, so be sure to mark those on the calendar.

Step 5: Run your business.

Once you have gotten through all of the filing and drafting, you can enjoy running your own business. At this point, you should also to talk to an attorney to review your client contracts and practices to help avoid legal trouble down the line.

**There have been significant updates in the law since this article was written. Read about it here: