What is a Professional Limited Liability Company (PLLC)?
Professional limited liability companies (PLLC's) are corporations for the purpose of providing professional services. Usually, professions where the state requires a license to provide services, such as a doctor, chiropractor, lawyer, accountant, architect, or engineer, require the formation of a Professional Limited Liability Company (PLLC)
Why Professional Limited Liability Company (PLLC) form?
A professional Limited Liability Company (PLLC) formed with the intention of engages in one of the learned professions, as the law, as medicine, or as the architecture. Traditionally, the Professional Limited Liability Company (PLLC) were forbidden of engages in such professions because they lacked the human, the necessary personal qualifications to follow them. In the recent years nevertheless most of the states promulgated a (PLLC) or an association act that allows the professional persons to practice in the form of business provided that all shareholders are members of the profession.
Professional Limited Liability Company (PLLC) - Point to Consider
- While the company cannot protect a professional against their own negligence, it protects them against the negligence of an associate.
- Professional Limited Liability Company is a useful securing of data to occupation wrongdoing insurance.
- More expensive to create than a partnership or only proprietary right.
- Paper work can become costly to owners.
- All incorporators must belong to the same occupation.
How is a Professional Limited Liability Company (PLLC) formed?
Articles of organization is required for a PLLC, are similar to those of standard LLCs. with professional entities, the proper state licensing body must often approve the formation documents before these documents can be filed with the secretary of state. Further, the articles typically must contain the signature of a licensed professional as the incorporator, and that person's license number, or a certified copy of the license may be necessary as part of the filing requirements. As a result, the filing time for professional entities may be longer than the filing time for standard business entities.
To form professional limited liability company may be by filing a Certificate of Incorporation pursuant of the Business Corporation Law, includes any practice as an attorney and counselor-at-law, or as a licensed physician, and those occupations designated in Title Education Law (For a listing of professional services).
To start professional limited liability company a Certificate of Good Standing from the appropriate Division or a Certificate of Authority under seal from the concern State Department of Education, Division of Professional Licensing Services, must be submitted with the Certificate of Incorporation.
The name of a professional limited liability company must contain either the words "Professional Limited Liability Company," or the words "Professional Limited Liability" and the abbreviation "Co.," or the abbreviation "P.L.L.C." or "PLLC" provided that the name of a professional limited liability company organized to render dental services shall contain the full names or surnames of all members and no other word than "chartered" or the words "professional services" or the abbreviation "P.L.L.C." or "PLLC."
What are the advantages of a Professional Limited Liability Company (PLLC)?
A major advantage to a start professional limited liability company is the limited liability the corporate entity affords its shareholders. This "limited liability" benefit is generally limited by State statute, as PLLC's, in order to prevent a "licensed professional" from avoiding liability for "malpractice".
Additional advantages:
- A Professional Limited Liability Company can increase "asset protection" benefits for the 'licensed professional'
- The "double taxation" problem does not apply to the PLLC, since it receives the 'flow-through' tax treatment of partnerships, unless the PLLC elects corporate tax treatment.
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