Business Models for Group Practices

Infographic Text: Business Models for a Group Practice

A group private practice is essentially a group of mental health professionals who work together. Group practices can look quite different depending on their business model.

Hired professionals usually fall into one of two categories.


  • More control over when or how they do their jobs.
  • Typically paid per session.
  • Taxes typically filed through a 1099 form.
  • Responsible for their own retirement planning, health insurance, etc.


  • Less independence regarding how therapy is provided.
  • Typically paid through a salary.
  • Taxes typically filed through a W-2 form.
  • Managers provide employee benefits, vacation days, and so on.

Group practices are often structured in one of four ways:

Sole Proprietorship:

  • One owner gets all the profit, and they manage the practice all by themself.
  • Owner is responsible for all the practice’s debts, liabilities, and employees.
  • Practice income is reported on a personal tax return. Employee benefits cannot be written off.

General Partnership:

  • Multiple owners share the profit equally and make business decisions as a group.
  • Owners share personal liability for the practice, partners, and employees.
  • Each owner’s share of the income is reported on their personal tax return.


  • Shareholders get profits and influence according to stock ownership.
  • If the practice is sued or goes into debt, only the company’s assets are used to pay. 
  • The company files its own income taxes based on its assets. 

Limited Liability Company (LLC):

  • An LLC can't sell stock. Instead it has members who own a percentage of the company.
  • Members have limited personal responsibility for the company's debts or legal issues.
  • Income is reported on personal income tax returns, similar to a partnership.


  1. Brewer, G. (n.d.). Business models for private counseling practices. Retrieved from
  2. Brewer, G. (n.d.). Starting a group private practice; Contractors or employees? Retrieved from
  3. Choosing the best legal structure for your practice. (n.d.) American Psychological Association Services, Inc. Retrieved from
  4. Who owns an LLC? Everything you need to know. (n.d.). Retrieved from