When you’re a nurse practitioner (NP) launching a side hustle or independent practice, there are endless decisions to make and steps to take just to get started.
- What kind of entity do I set up?
- Can I fully own my practice as an NP, or do I need a physician partner?
- Can I provide both primary care and aesthetic services under the same entity?
- Can I co-own a practice with a PA?
While NPs have years of training in providing exceptional clinical care, most programs typically offer little support for starting a practice. Helping NPs go that first mile in setting up businesses with compliance and legal support is exactly why Prax Health was founded. “Most NPs who leave a hospital or clinic job to start on their own are learning the critical questions to ask,” says Rodrigo Barrios, head of sales.
Prax Health helps NPs with practice entity formation, state-by-state regulatory requirements, compliance documents and connecting with partners to help with a collaborating doc and malpractice insurance. In some cases, they provide quick answers to questions. In other areas, like setting up your entity, they file the paperwork for you. “NPs are incredibly busy, and they have such limited time. They want a clear, step-by-step roadmap,” says Barrios.
Related read: Beyond Compliance: Elevating the Collaborating Physician Role for Your Practice in 2025
With the right partners, NPs can start new businesses with smart simplicity. Barrios shares some of the early, essential decisions to build a safe, compliant foundation for growth.
Understanding the legal requirements to start a nurse practitioner practice
One of the early steps in meeting NP legal requirements is forming the right business entity. Options like a professional limited liability company (PLLC), professional corporation (PC) or a limited liability company (LLC) come with different protections. Different states also allow and restrict different entity structures for healthcare professionals, and it’s important to choose wisely. Similarly, setting up a C-Corp or an S-Corp has different implications for taxation and scalability. “When it comes to entity formation, it really depends on the state and what kind of practice you want to build,” says Barrios.
Related read: Choosing the Right Legal Entity for Your Healthcare Practice
Some NPs launch small, part-time practices, such as telehealth, primary care, urgent care, or aesthetics. Others envision building a large multi-provider clinic with a range of licensures. “Every NP has a range of options. They can fully own their PC or PLLC entity, or they can create an MSO-PC structure with a physician partner. They can take in additional outside investment to grow. It just depends on your long-term vision,” says Barrios.
Your legal structure should be aligned with both your practice goals and state regulations, ensuring you can bill, credential and grow compliantly.
Meeting malpractice insurance requirements for nurse practitioners
No matter your practice model, malpractice insurance is one of the most critical legal requirements to start a nurse practitioner practice. It protects both your license and your livelihood. It’s often a prerequisite for payer contracts and insurance credentialing. “For NPs in the early stages of starting a practice, having the right malpractice insurance policy is essential. Having a partner like CM&F gives them peace of mind from day one,” says Barrios.
The best NP malpractice insurance is flexible as your business grows and changes. Whether you’re launching a telehealth side business or a full-time in-person private practice, CM&F’s coverage adapts as your services and risk exposure evolve, so you’re protected at every stage.
Compliance and documentation for new NP practices
In addition to getting your entity and insurance in place, operational compliance is an early priority. Meeting NP compliance requirements isn’t just about risk. It’s about running a safe, trustworthy and sustainable business.
Related read: Compliance Checklist for Healthcare Business Owners: Stay Protected and Avoid Penalties
That means having clear, legally sound documentation in place from day one:
- Collaborating physician agreements (if required in your state)
- Patient consent forms
- Telehealth and financial policies
- Terms of service and privacy policy on your practice website
“Beyond entity setup, we help with early compliance documents, like patient consent forms, telehealth agreements and financial policies. Those are often overlooked but essential for launching safely,” says Barrios.
These documents enhance your professional credibility and ensure your practice meets regulatory and patient-care standards.
Nurse practitioner legal checklist: 5 steps to launch
- Choose your entity type: File your PLLC or PC in compliance with your state’s business laws. Your long-term goals, such as whether you’ll stay solo or plan to scale, shape your legal structure.
- Find the right partner: If your state requires a collaborating doctor, find someone who can be a responsive and clinically aligned collaborator.
- Purchase malpractice coverage: Protect your license and income with flexible, portable insurance from CM&F.
- Prepare compliance documents: Get expert help to write your collaboration, consent, telehealth and financial policies.
- Revisit annually: Laws evolve, especially on the state level. Review your setup yearly to maintain compliance.
Simplifying the legal path to NP practice ownership
If you’re like most NPs, you don’t have time to decipher every regulation or file every document. Partnering with legal, regulatory, operational and insurance experts helps streamline the process so you can focus on patient care.
Frequently Asked Questions
- What legal requirements do nurse practitioners need to start a private practice? NPs must choose the right business entity (PLLC, PC or LLC), follow state-specific ownership rules, and ensure their structure supports billing, credentialing and growth. Requirements vary by state, making compliant entity formation essential for long-term practice success.
- Do nurse practitioners need malpractice insurance to open their own practice? Yes. Malpractice insurance is a key legal requirement for NP-owned practices. It protects your license, is often required for payer contracts, and ensures you can provide patient care safely. Partnering with a flexible provider like CM&F helps your coverage grow with your business.
- What compliance documents are required when launching an NP practice? New practices must have foundational compliance documents such as collaborating physician agreements (when required), patient consent forms, telehealth policies, financial policies and website privacy terms. These documents establish credibility, support safe operations and help maintain regulatory compliance from day one.
Learn how our nurse practitioner malpractice insurance supports your growth, whether you’re starting a side hustle or building a growing private practice.
