How to Structure Your Business if You Offer Both Therapy and Coaching

If you are a licensed therapist looking to add coaching services to your practice, you might wonder: Do I need two separate businesses? The answer is usually no. Instead of creating a whole new legal entity, what you really need is a clear, intentional structure that keeps therapy and coaching distinct—both for your clients’ clarity and your professional compliance. In this post, we’ll explore practical ways to organize your business so you can confidently offer both services without unnecessary duplication or legal risk. Learn more about the difference between therapy and coaching by clicking here.

When Therapy and Coaching Coexist

If you're a licensed therapist who also offers coaching, you've likely asked yourself:
“Do I need to create two completely separate businesses to keep things legal and ethical?”

It’s a common question—and one that sparks a lot of anxiety. Between what you’ve heard in Facebook groups, from colleagues, or even from some legal consultants, it’s easy to feel like the only way to stay safe is to form a second LLC, build a second brand, and maintain totally distinct systems.

But here’s the truth:
In most cases, a second LLC isn’t required.
What you do need is clear structure, ethical boundaries, and clean documentation within your existing business.

Creating duplicate businesses can be costly, confusing, and unnecessary—especially if your therapy and coaching services are well-differentiated and properly disclosed. The goal isn’t separation for the sake of formality. It’s clarity—for your clients, your licensing board, and your own peace of mind.

In this post, we’ll walk through how to structure your business so you can ethically and confidently offer both services—without overcomplicating your setup.

Clarifying Why Structure Matters

Offering both therapy and coaching under one business umbrella can absolutely work—but only if the structure behind your services is intentional and well-defined. Without it, you risk crossing boundaries that could confuse clients or create regulatory issues.

Scope & Role Clarity

Therapy and coaching may share some tools and techniques, but they serve fundamentally different purposes:

• Therapy addresses mental health conditions, past trauma, and emotional healing. It often involves diagnosis and is regulated by state licensing boards.

• Coaching focuses on goal achievement, personal development, and future planning. It does not diagnose or treat mental health disorders and is typically unregulated.

While therapists may bring their clinical insight into coaching, it’s critical to avoid blending scopes in a way that could mislead clients—or your licensing board.

Regulatory Risk

Your licensure is on the line when offering coaching services. According to The Insurance Maze, if your coaching work looks too much like therapy (e.g., you’re addressing clinical issues, using diagnostic language, or treating anxiety/depression without formal intake), a board could view it as practicing therapy without appropriate documentation—or even across state lines without authorization.

This is why maintaining clear distinctions through documentation, language, and marketing is non-negotiable.

Client Confusion & Ethical Boundaries

Even when your intentions are clear, clients may not understand the difference between therapy and coaching unless you clearly explain it. Confusion can lead to:

• Breaches of ethical boundaries

• Unintended dual relationships

• Inaccurate expectations of confidentiality, treatment, or outcomes

Having separate informed consent forms, service agreements, and descriptions of each service is essential—not only for legal and ethical compliance but for building trust and clarity with your clients.

Options for Structuring Your Practice

Once you’re clear on the ethical and legal boundaries between therapy and coaching, the next step is to decide how to structure your business to reflect those distinctions. The good news? You have options—and in most cases, you don’t need to form a second LLC.

Below are three common models used by licensed professionals who offer both services:

One Legal Entity, Two Service Lines

This is the most common and streamlined setup for many therapist-coaches.

You operate under one legal business entity—such as an LLC or PLLC—but offer clearly distinct service lines for therapy and coaching.

What this looks like:

• One legal business name, but separate branding (e.g., different website pages or sub-brands like “[Your Name] Therapy” and “[Your Name] Coaching”).

• Separate intake forms, informed consents, and service agreements tailored to each role.

• Clear differentiation in how you market, describe, and deliver therapy vs. coaching.

Best for: Providers who want simplicity but are willing to do the internal work to maintain clear boundaries.

One Legal Entity, Two “DBAs”

In this model, you still use a single business entity, but you officially register two “Doing Business As” (DBA) names—one for therapy and one for coaching.

What this looks like:

• Example: “Jessica Taylor Therapy, PLLC” doing business as both “Taylor Counseling” and “Clarity Coaching.”

• Offers more distinct branding and identity for each service without requiring a second LLC.

• Requires DBA registration through your state or local government and potentially more bookkeeping organization.

Best for: Professionals who want semi-separate branding and clearer lines between services without starting over.

Two Separate Legal Entities (When It Makes Sense)

While not required for most providers, there are specific scenarios where forming a separate LLC or sole proprietorship for coaching is the smartest path.

Consider this model if:

• Your state board or insurance provider recommends or requires full separation.

• Your coaching work carries distinct liability risks or ventures into higher-risk niches (e.g., financial coaching, trauma-informed coaching).

• You want fully independent operations—from separate websites and branding to different bank accounts and tax structures.

Best for: Providers with high-risk exposure or long-term goals for distinct, scalable businesses.

You don’t have to duplicate your entire business to do this ethically and legally. But you do need to be intentional about how you present your services, manage your documentation, and protect your license.

Practical Essentials

No matter which business structure you use—one entity, DBAs, or separate LLCs—your systems, language, and boundaries must clearly differentiate therapy from coaching. These essentials are the backbone of an ethical, sustainable dual-service practice.

Policies & Paperwork

Clear documentation is not just a formality—it’s your first line of protection as a licensed professional.

• Separate service agreements: Don’t reuse your therapy paperwork for coaching. Create standalone contracts and intake materials that reflect the unique scope and limitations of coaching.

• Informed consent: Coaching clients must understand that they’re not entering a therapeutic relationship. Clarify that coaching is not a substitute for mental health treatment and that no diagnosis or clinical intervention will be provided.

• Record-keeping: Therapy requires detailed, HIPAA-compliant documentation. Coaching records can be simpler—but they should still be professional, accurate, and stored securely. Maintain ethical standards even in unregulated spaces.

Marketing & Positioning

How you present yourself matters—a lot. Many regulatory complaints stem from confusion about the services being offered.

• Use non-clinical language when promoting coaching. Words like “healing,” “anxiety,” or “treatment” can easily blur the line.

• Create separate websites, landing pages, or social media profiles for coaching if possible. At minimum, clearly divide the coaching section from the therapy section on your site.

• Be explicit in bios, contact forms, and calls-to-action. Clients should instantly know which “hat” you're wearing at every step.

Boundary Management

Ethical practice depends on role clarity, especially when clients move between services.

• Avoid switching roles mid-relationship without transparency. If someone starts as a therapy client and wants coaching, or vice versa, pause and re-contract.

• Best practice: complete one service fully, then begin the other with new documentation. Avoid dual roles whenever possible—it’s a major gray area with real ethical risk.

Ethics & Licensing

Even when coaching is unregulated, you are still a licensed provider—and that means your ethical obligations follow you.

• State laws still apply: Depending on your jurisdiction, things like mandatory reporting, confidentiality, or supervision may still be required when you're coaching, especially if you're working with vulnerable populations.

• Choose a coaching niche that minimizes clinical overlap. For example, leadership or business coaching tends to have fewer complications than trauma-informed or mindset coaching. If your niche edges too close to therapy, you must be even more cautious.

These foundational practices protect your license, support your clients’ clarity, and allow you to work with confidence—no matter what your business setup looks like.

Insurance and Liability

When offering both therapy and coaching, insurance coverage is a critical piece of your risk management strategy. Don't assume your current policy has you fully protected—especially if you’re blending service types under one roof.

Therapy Requires Professional Liability (Malpractice) Insurance

As a licensed therapist, you're likely already carrying professional liability insurance (also known as malpractice insurance). This covers you in case of claims related to:

• Misdiagnosis or failure to diagnose

• Breach of confidentiality

• Boundary violations

• Harm resulting from clinical services

These policies are designed to protect licensed providers working within their scope of practice.

Coaching May Require General Liability or Additional Riders

Coaching, by contrast, is not a clinical service. That means:

• Your malpractice policy may not extend to coaching—and in some cases, may even exclude it.

• You may need general liability insurance, which covers non-clinical claims (e.g., a client trips at your office, or claims misrepresentation of services).

• Some insurers offer coaching endorsements or add-on coverage for professionals who do both.

Action Step: Review Your Policy

Don’t guess. Review your current liability policy or speak directly with your provider. Specifically ask:

• Does this policy cover coaching services?

• Are there any restrictions based on client location or type of service?

• Do I need to separate coaching and therapy under different policies or brands?

In some cases, you’ll find that a single comprehensive policy is enough—especially if you operate under one business entity and maintain proper documentation. In others, you may need to purchase a separate rider or distinct policy for your coaching services.Being underinsured can expose your license and livelihood to unnecessary risk. Taking the time to clarify your coverage now ensures that you can serve your clients—whether in therapy or coaching—with confidence.

Audit Checklist: Is Your Structure Solid

Before you move forward—or keep operating as-is—pause and assess whether your current setup truly protects you, your license, and your clients.

Use this quick audit to evaluate whether you’ve clearly distinguished between therapy and coaching in your business:

If You Answered “No” to Any of These...

It’s time to tighten up your systems.

Even small tweaks—like updating language on your website or separating intake documents—can significantly reduce your risk and improve client clarity. The key is to build a structure that aligns with both your ethical responsibilities and your professional goals.

This isn’t about being perfect. It’s about being proactive, clear, and protected.

When a Separate LLC Might Be Best

While most therapists offering coaching don’t need to form a second LLC, there are situations where it’s not just wise—it’s necessary. A full business separation can provide added protection, clarity, or compliance when specific factors are at play.

Here’s when it makes sense to consider a second legal entity:

State Mandates or Insurance Requirements

Some licensing boards or malpractice insurance carriers require a strict division between therapy and non-clinical services. In these cases, operating coaching through a completely separate LLC may be the only way to stay compliant or covered.

• Always double-check with your board and insurer before blending services under one roof.

Distinct Liability Exposure

If your coaching work involves higher-risk areas (e.g., business strategy, financial coaching, trauma-informed methods), the potential liability may differ significantly from your therapy practice. A second LLC allows for:

• Separate insurance coverage

• Isolated risk management

• Stronger legal protections in the event of a claim

Clear-Cut Brand Separation

If your vision includes building a scalable coaching brand—perhaps with its own audience, pricing model, or team—then a standalone LLC may offer more:

• Flexibility for business development

• Separation of income and expenses

• Clarity for clients who may never need to know you’re also a therapist

This can be especially valuable if you want your coaching brand to serve a national or global audience, distinct from your therapy practice limited by state licensure. You don’t need two businesses to be ethical and effective—but if your structure, risk profile, or long-term goals call for it, a second LLC might be the strategic move.

Final Thoughts

At the end of the day, your business structure doesn’t need to be complicated—it needs to be clear, compliant, and confidence-boosting.

Whether you use one legal entity or two, your setup should serve three goals:

• Clarity for your clients

• Compliance with your licensing board and insurance

• Confidence in how you show up as a therapist, coach, or both

For most professionals, the simplest path is the smartest:

• One business entity + clearly differentiated branding + strong documentation and boundaries.

This allows you to ethically offer both therapy and coaching without unnecessary duplication—while protecting your license, your reputation, and your peace of mind.

More Resources

If you are interested in learning more, click here. For more information on this topic, we recommend the following:

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About the Author

Jessica Taylor is a licensed therapist and board certified coach who contributes to the promotion of mental health and addiction awareness by providing educational resources and information.