When setting up your own private practice, it’s important to lay the legal and professional groundwork to ensure compliance is always front of mind when you’re practising as a psychologist.
Establishing a private practice in psychology can be an exciting step to take.
It creates an opportunity to develop a career to suit your preferences – whether you’d like to focus on a niche area or enjoy more flexible hours.
However, private practice also demands a high level of responsibility. Before going ahead, it is essential to understand your obligations – professionally, ethically and legally.
Below, we speak with Dr Zena Burgess, CEO, Australian Psychological Society, about some of the key things to keep in mind. And, in May, we will be going deeper on this topic at our Business of Psychology Symposium where Jonathan Teh, Principal at Russell and Kennedy Lawyers, will deliver a presentation delving into legal matters and sharing his top 10 tips to avoid being sued as a psychologist running a private practice.
1. Make sure you meet your business requirements
The first step is to ensure your practice meets the requirements common to all businesses in Australia.
To begin, determine whether you wish to form a company, which requires registration with Directors and an Australian Company Number (ACN), or a sole trader, which means you require an Australian Business Number (ABN).
The main difference is that a company is a unique legal entity, which is responsible for its own debts and legal matters, including employment of staff and psychologists. If legal action is threatened, depending on the issue, the company and/or the treating psychologist may be sued. In certain circumstances, the Directors could possibly be sued too.
In contrast, a sole trader is connected to their business. If someone takes legal action against you as a sole trader, then you are usually personally liable and/or any treating psychologist employed or engaged.
It’s best to seek advice before deciding which model is right for you, with the next steps being to form your business as a company or sole trader and register your business with the Australian Government. Remember, if your turnover reaches $75,000, then registering for Goods and Services Tax (GST) is mandatory.
