What is a Professional Limited Liability Company (P.L.L.C)? 

For professionals who have studied in the United States and hold a valid license, a professional LLC or PLLC is an entity that is permitted.The purpose of Professional Limited Liability Companies (PLLCs) is to assist professionals whose occupations necessitate licensure from the state. Forming a PLLC is likely required if someone provides specialized services like medical care, legal advice, or architectural design. This structure safeguards personal liability for individual professionals, while at the same time enabling them to provide licensed services through a legally recognized entity.

What distinguishes a PLLC from an LLC?

Although PLLCs and LLCs offer limited liability protection and separate personal assets, there are some important distinctions.

1. PLLCs are specifically designed for licensed professionals (such as doctors, lawyers, and accountants), but LLCs can be utilized for any type of business.
2. Licensing is not required for members of a LLC, but they must still be licensed in their respective professions.
3. To form a PLLC, it is often necessary to obtain approval from the relevant licensing board along with the usual state filing requirements, while an LLC only needs to comply with state filing requirements.
4. The ownership and management of a PLLC is typically restricted to licensed professionals, whereas an LLC can be managed by its members or appointed managers.
5. The regulations and requirements for PLLCs can vary greatly from state to state, even more than for LLCs.

What distinguishes a professional limited liability company from others?

1. Limited liability protection is offered by PLLC to its members, similar to an LLC, in order to safeguard personal assets from the company's debts and liabilities. This protection doesn't cover malpractice or professional negligence.
2. The purpose of a PLLC is to serve businesses that offer professional services that require state licensure, including medical, legal, architectural, or engineering services.
3. To operate a PLLC, professionals in the field must be licensed. The company ensures that all owners have the necessary qualifications to provide its services.
4. It is customary for licensed professionals in the relevant field to manage and own a PLLC. Maintaining high standards and credibility in the industry can be helped by this.
5. In addition to the usual state filing requirements for LLCs, forming a PLLC may require approval from the relevant state licensing board. By doing this, an extra layer of regulatory compliance can be added.
6. PLLCs are generally taxed the same way as LLCs, with the income being passed on to the members and taxed on their individual tax returns. State regulations and individual tax situations can cause variations in this.
7. Although PLLC members are protected from the company's general liabilities, they still have to take responsibility for their own professional actions and malpractice. This ensures that professionals are held accountable for their conduct.
8. As a licensed professional, a PLLC is a great choice to combine the advantages of limited liability with the credibility and regulatory compliance needed in your field.

What are the steps required to register a PLLC?

To register a Professional Limited Liability Company (PLLC), there are several steps that vary slightly depending on your state. A general overview of the process can be found here:

1. Select a name for your business: It should contain the phrase 'Professional Limited Liability Company' or 'PLLC' and be distinct within your state. Ensure that the business name has not already been taken by checking your state's business name database.
2. The role of a Registered Agent is to receive legal documents on behalf of the PLLC. This is capable of being either an individual or a business entity.
3. Ensure that you file the Articles of Organization with your state's business registration office. The basics of your PLLC are listed in this document, including its name, address, and members.
4. To obtain PLLCs for licensed professionals, it is necessary to obtain approval from the relevant state licensing board. It's possible that this will require additional paperwork and payment.
5. An operating agreement can be drafted, even if it's not always required by law, and it describes how the LLC will be managed and operated. It's important to have one to prevent future disputes.
6. Newly formed PLLCs are required by some states to publish a notice of their formation in a local newspaper for a specific period.
7. Applying for an Employer Identification Number (EIN) from the IRS is necessary to obtain an Employer Identification Number (EIN). For tax purposes, this is necessary.
8. Your state may require additional requirements, such as obtaining business licenses or permits.
9. Ensure that your LLC stays in good standing by maintaining compliance with ongoing requirements, such as annual reports and renewals.
10. Ensure that the beneficiary's ownership information is filed.