What is the difference between llc and pllc

Instead, they must form a professional limited liability company PLLC. Business owners often choose the LLC structure because it offers the same protection from personal liability that a corporation does, without all the onerous formalities, ongoing paperwork, and annual filings required to keep your corporation in good standing.

LLCs must file articles of organization with the state, but the management structure is much more flexible in nature than the corporation. For professional services businesses, the advantages of an LLC are easy to see. However, in some states, professional services such as medical care, legal advice, tax services, accountants, and other occupations that require licensing by state regulatory boards are restricted by law from using the LLC entity structure.

Instead, they can choose the PLLC entity structure. Note: The one exception is California, where professionals cannot form an LLC or PLLC; instead, they can form a professional corporation or limited liability partnership. Like the LLC, the PLLC protects its owners and members from personal liability in case of judgment or debt, without the strict formalities required of a corporation.

The state licensing board and State Secretary will inform you what kind of information you are required to file. This is an additional step that an LLC does not have to deal with. Requirements for approval will vary depending on your profession and your state.

Rules and requirements for PLLC licensed owners vary from state to state. Some states require all the members to have specific licenses for the service offered. In other states, you may be allowed to form a PLLC that has as low as 50 percent professional ownership. The PLLC, however, may face some additional difficulties when it comes to business continuity. We are required by statute to either be sole practitioners or, if we want a more formal business entity under which to do business, we can enter into a PLC - Professional Legal Corporation what I chose or an LLP - Limited Liability Partnership.

An LLC can have anyone or any entity be a Member. There is no appreciable difference between that and an LLC otherwise.

A PLLC is an LLC but it is reserved for businesses that operate under a professional services that derives from the professional license of its owners. Typically, all the owners have to have the same license. So, you would think of attorneys, physicians, CPAs, architects, or others, like counselors or engineers.

The owners have to have a professional license and the services offered must be in line with the professional license. Join Today! Sign in. Open menu Alignable. Sign in Join Today!

All Answers Leland Burton from legalplans. This is the professional limited liability company PLLC. This structure is specifically designed for businesses that require professional licensing to operate. States that do offer PLLC formation often require proof of licensing and member approval from the state licensing board. Certain industries may also have their own regulations. They mirror one another in the following ways:. When forming a PLLC, most states will require proof of professional licensing before approval your articles of organization.

There are also important considerations when it comes to the scope of limited liability protection. A limited liability partnership LLP is another business structure available to companies that require licensed professionals.

LLPs are taxed like partnerships, with profits passing through to their members. They do not offer the option to elect corporate taxation status like an LLC. However, anyone looking to form a business that provides professional services will need to consider which structure is best for them. While only three states require licensed professionals to form a PLLC, at least thirty states offer the option.

The specific requirements in your state will play a big role in helping determine if a PLLC is the right structure for your business.