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PLLCs - Information for Licensed Professions

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PLLCs - Information for Licensed Professions

By NicoleD
Published: June 15, 2010

Some states require licensed professionals to form PLLCs, or professional limited liability companies. Read on to understand what professions may need to register as a PLLC, and the steps to do so.

What is a PLLC?

A Professional Limited Liability Company, also known as PLLC, is essentially an LLC; a legal structure that provides limited personal liability, tax efficiencies, and operational flexibility - that is formed around a licensed professional service. Each state determines what business activities require licensure, but typically licensed professions include accounting, architecture, medicine, dentistry, cosmetology, and law, among others.

How is a PLLC different from an LLC?
Some states do not allow licensed professionals like doctors or lawyers to form an LLC for their professional services. Instead, licensed professionals must form a PLLC. The main difference between a PLLC and LLC is-t in structure or legal liability, but is more of a formality- PLLCs typically have additional documentation requirements focused on verifying the licensure.

What types of businesses can form a PLLC?
PLLC requirements vary from state to state. Some states may require every licensed business to register as a PLLC, while other states just require it of a handful of licensed professionals. If a state requires that your business register as a PLLC, usually every member/partner of your business must also be a licensed professional in that field.
If you are unsure if your business should register as a PLLC, contact your stat's business registration office.

How do I form a PLLC?

Like an LLC, you will need to file articles of organization with your stat's business registration office. The'articles of organizatio' is a simple document that legitimizes your business with the state and includes information like your business name, address, and the names of its members.

Laws vary from state to state, but you will likely have to go through all the motions that an LLC would, in addition to providing documentation that verifies professional licensure of all members in the PLLC. Some states may also require your PLLC to be approved by your industr's professional licensing board. Read on for the 5 Steps to Register a Business from Business.gov.

Your PLLC is legally formed once your documentation is approved by the state.

Need Help?

If you need help navigating your professio's legal requirements, yo're not alone. Licensed professionals often join trade associations to stay abreast of industry trends and legal requirements, but free help is available too. Visit Business.go's Industry Guides for more information on your profession's regulatory requirements or Training and Assistance Resources for free or low-cost services.

Have More Questions? Ask them in the Community discussion boards.

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