Why Understanding Massage Business Legal Requirements Matters
Before opening your doors, it’s essential to understand your massage business legal requirements. From licenses and insurance to taxes and HIPAA compliance, getting your legal foundation right protects you, your clients, and your business.
Here’s a step-by-step breakdown of the key legal details every massage therapist should know.
Get Your State or National License
To legally practice, you must hold an active massage license. Most states require completion of an accredited program and passing the MBLEx or equivalent exam. Always verify your state’s specific requirements.
Liability Insurance and Property Coverage
Every professional massage therapist should carry liability insurance to protect against potential claims. Many insurance companies offer affordable options for massage professionals, and some policies also cover equipment and property damage. In the beginning of my massage career I went with the cheapest, but as time went on, I chose Associated Bodywork & Massage Professionals, ABMP, not only for the affordability, I can’t remember the last time they raised their rates, but the many benefits they offer being a member. Weigh the pros and cons of less expensive insurance vs the savings from discounts some companies offer. TIP: Some liability insurance policies do not include or allow you to sell products. If you plan on selling products make sure to read the fine print.
Register for an EIN
An Employer Identification Number (EIN) from the IRS is free and easy to apply for. It allows you to open business bank accounts, hire employees, and file taxes separately from your personal information. This is an easy step. TIP: It may be included as part of the school’s curriculum, as it was with mine.
Choose a Business Structure
Decide whether you’ll operate as an LLC or Sole Proprietorship.
- LLC: Offers liability protection and separates personal and business finances.
- Sole Proprietorship: Easier to set up but offers less protection.
This was also covered as part of my schooling, but if your school does not cover this subject, consult a tax or legal professional if you’re unsure which is best for you.
File Your Articles of Incorporation and BOI Report
If you form an LLC or corporation, you’ll need to file Articles of Incorporation with your state.
In addition, the new Beneficial Ownership Information (BOI) filing is required by FinCEN for most small businesses starting in 2024. This identifies who owns and controls your company.
These are not complicated to do, and again may be covered as part of your school’s curriculum.
Obtain a Massage Establishment License (If Required)
Some states or cities require a Massage Establishment License for your location in addition to your therapist license. Always check your local rules before opening. I have had multiple locations in different cities. Some require an establishment license and some do not. Do not skip this step! Fines can be costly.
Set Up Financial and Legal Systems
- Open a Business Bank Account: Keep business and personal finances separate.
- Set Up Payment Processing: Choose tools like Square, Stripe, or Venmo Business to accept card payments. I have had Square Up since the beginning and have never had an issue. I also use Venmo Business as that seems to be the second most popular way my clients like to pay. I do have to use Stripe as that is connected to the gift certificate software I use, however, my personal opinion is that it’s not as user friendly.
- Install Accounting Software: Use Quicken, QuickBooks, Wave, or FreshBooks to manage your books and track expenses.
I use Quicken as that was already my personal accounting system and one less program to learn.
TIP: If you can integrate programs your used to, do that and make it as easy on yourself as possible.
Understand HIPAA Compliance and Tax Obligations
If you store client health information, follow HIPAA compliance standards to protect privacy.
Also, stay aware of tax obligations—this includes collecting sales tax (if required in your state) and filing quarterly or annual income tax.
Final Thoughts on Massage Business Legal Requirements
Taking care of your massage business legal requirements from the start keeps your practice professional and protected. With the right structure, insurance, and compliance systems in place, you can focus on what you do best—helping people feel their best. 🌿
