Do I Need Two Businesses for Therapy, Coaching and CAM?

Maybe. But not always… that’s the answer to, “Do I need two businesses for therapy and coaching?

T he Audio Take — a fast listen with new angles on the topic HERE.

These days, I see a lot of panic-inducing headlines aimed at therapists who also coach:

“Protect your license!”
“Never mix therapy and coaching!”
“You must have separate websites, LLCs, bank accounts, identities…”

Pffftthh.

Let’s take a breath—and a more nuanced look.

As someone who’s taught and practiced in both domains for years, I’m here to say: it’s not that simple. And it doesn’t have to be that complicated either.

Therapy and Coaching: Not Always a Clear Line

First, let’s be honest: therapy and coaching aren’t always two completely different services. Depending on your approach—especially if you’re drawing from modalities like CBT, positive psychology, or solution-focused work—there’s a ton of overlap.

Some interventions used by coaches show up in self-help books and therapy sessions. Does that mean we’re all breaking the rules? Of course not. It means we’re using a shared language for growth, healing, and transformation.

Yes, there are differences—particularly around scope, diagnosis, and confidentiality. But the rigid distinctions often touted online? They’re not as black-and-white as some would have you believe.

When Might You Need Two Separate Entities?

Here’s where it gets more grounded:

✅ **You might need two separate legal entities if:**

You’re operating under a PLLC (Professional LLC), which in many states can only be used for a licensed profession.
You are a HIPAA-covered entity (e.g., billing insurance electronically), and coaching under that same entity could subject your coaching to HIPAA regulations.
Your state board has specific rules about licensed professionals offering non-licensed services under the same structure.

If any of those apply, it may be wise to set up a second LLC or DBA for your coaching work, just to keep things clean.

When You Probably Don’t Need Two Businesses

If you’re in a state where:

You operate under a regular LLC (not a PLLC),
You’re not billing insurance (and thus not HIPAA-covered), and
You’re providing coaching that is distinct in purpose and scope from therapy…

Then no, you don’t automatically need to spin off a second business, website, and identity just to be safe.

What you do need is clarity:

Clarity in how you describe your services.
Clarity in your documentation.
Clarity in your contracts and consent forms.

The Real Key: Documentation and Consent

Your paperwork is your protection. It tells the story of what service was offered, under what context, and with what expectations. If your coaching client signs a clearly written coaching agreement—not a therapy informed consent—there’s far less chance of confusion or liability.

Confused clients = risk.
Clear clients = empowered clients.

What About Listing Your Credentials?

Here’s my take:

If you’re offering personal consultation, coaching, or non-clinical services under the same umbrella—or even just being transparent about your background—you don’t need to hide your license. In fact, in this era of transparency, it would feel disingenuous not to acknowledge your training and credentials somewhere.

That said:

Don’t market your license as if you’re practicing under it when you’re not. That’s the real ethical concern.
Do clearly explain your role and scope.

If you’re operating everything under one integrated website (and legally allowed to), it’s absolutely appropriate to say:

“I am a licensed therapist in [state(s)], though I do not offer psychotherapy under this service.”

Or:

“I maintain a license in [state(s)] where I continue to offer therapy services. However, the service you are engaging in here is non-clinical and does not constitute mental health treatment.”

And if you’ve chosen to keep two websites—one for therapy and one for coaching or consultation—you can still acknowledge your credentials on the coaching side, like this:

“I hold a Master’s in Counseling and have practiced for over 20 years as a therapist in states I hold a license. I now also offer coaching focused on spiritual growth, wellness, and life transitions.”

It’s honest, clear, and non-misleading. The key isn’t to pretend you’re not licensed—it’s to not use your license to imply a scope you’re not providing in that context.

Confidentiality Isn’t the Same—And Clients Deserve to Know

Therapy offers more legal confidentiality protections than coaching—especially when it comes to court cases, subpoenas, and privilege. Clients need to understand that.

As a coach, you can promise confidentiality—but not with privilege (known as privileged communication). And there’s no HIPAA or psychotherapist-patient privilege to back it up legally.

Make sure your clients are aware of this difference—especially those in high-risk professions or sensitive personal situations.

Your coaching agreement should explain this distinction clearly, so clients can make an informed decision about which type of support is right for them.

CAM Overlay: Minnesota & Massachusetts

Be aware of this trend showing up in two states so far- this is for anyone who is practicing Complementary and Alternative Medicine:

In MN, CAM practitioners (including non-clinical coaches offering meditation, energy work, etc.) must post/provide a Bill of Rights, avoid diagnosing/prescribing, and are regulated by MDH under Safe Harbor (Chapter 146A).
Licensed professionals using CAM modalities in MN must also follow these CAM mandates for those segments.
While coaching (life, spiritual, wellness) is not specifically listed as CAM, if you are conducting other services in conjunction with coaching in MN, the CAM mandates apply.
MA is advancing a Safe Harbor CAM bill that will set similar oversight: non-invasive CAM allowed for unlicensed practitioners with required disclosures and complaints processes, while licensed professionals remain governed by their credential scope.

✅Final Due Diligence Checklist

Demonstrate competency through training (therapy AND coaching)
Understand your scopes of practice
Check your professional codes of ethics
Check with your malpractice insurance for additional considerations (some insurance companies require proof of training/certification for coaching and of course, license information for counseling)
Consider a legal consultation for final review of your business systems/contracts

Bottom Line:

You don’t always need two separate businesses. But you do need clarity.
Clarity in your structure, your documentation, and your voice.

The goal isn’t to hide your expertise or fragment yourself. It’s to serve your clients ethically, protect your license intelligently, and honor the full scope of who you are.

References:

6 (Legal) Considerations for Therapists Who Coach

How to Ethically Offer Coaching as a Licensed Therapist: A Step-by-Step Guide

Coaching and Counseling Across State Lines: Legal Compliance for Multistate Wellness Businesses

Coaching vs. Therapy: What’s the Difference? (And Why It Matters)

CHAPTER 146A. COMPLEMENTARY AND ALTERNATIVE HEALTH CARE PRACTICES

Health Freedom in Minnesota via MN Statute 146A

Keep Holistic Medicine Available And Affordable In Massachusetts