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Professional Limited Liability Company (PLLC): Entity Type for Licensed Professionals

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USA Corporate Services provides filing services, not legal advice about professional licensing or professional liability. PLLC requirements vary by state and profession. Consult an attorney licensed in your profession and your state’s licensing board for advice specific to your situation. See full disclaimer

CRITICAL: PROFESSIONAL MALPRACTICE LIABILITY WARNING

PLLCs provide limited liability for business debts and obligations. However, PLLC members remain personally liable for their own professional malpractice. 

What this means:

✅ PLLC protects you from business debts and contracts
✅ PLLC protects you from other members’ malpractice
❌ PLLC does NOT protect you from your own professional negligence
❌ PLLC does NOT replace professional malpractice insurance

Example: If a doctor in a PLLC commits malpractice, the patient can sue the doctor and lay claim to the doctor’s personal assets. The PLLC structure does not shield the doctor from personal liability for their own malpractice.

YOU MUST CARRY PROFESSIONAL MALPRACTICE INSURANCE.

PLLC is a business structure, not a substitute for professional liability insurance.

For advice about professional liability protection, consult an attorney specializing in your profession.

PLLC Quick Facts (Professional Entities)

Aspect Details
Who Can Form
Licensed professionals ONLY
Ownership Restrictions
All members must be licensed in same/related profession
Protects From Own Malpractice
NO – personally liable for own negligence
Protects From Others’ Malpractice
YES – not liable for co-members’ malpractice
Malpractice Insurance Required
YES – PLLC doesn’t replace insurance
State Availability
Varies – not all states have PLLC entity type
Tax Treatment
Pass-through taxation (like LLC)
Licensing Board Approval
May be required in some states

⚠️ Critical: PLLC does NOT protect from your own professional malpractice


What is a Professional Limited Liability Company (PLLC)?

A Professional Limited Liability Company (PLLC) is a business entity designed specifically for licensed professionals such as lawyers, doctors, architects, engineers, accountants, and other professionals whose occupation requires a state license.

Why PLLCs exist: While many businesses choose to form a Limited Liability Company (LLC) because of tax benefits, limited liability protection, and operational flexibility, some states don’t allow LLCs to be owned by professionals whose occupation requires a license. In these states, licensed professionals who want the benefits of an LLC must form a PLLC instead.

Key PLLC characteristics:

Ownership: Only licensed professional individuals can own shares . All members must hold active professional licenses in the same or related profession.

Liability Protection:

  • Limited liability for business debts and obligations
  • Protection from other members’ malpractice claims
  • NOT protected from own professional malpractice

Taxation: Pass-through taxation where profits and losses are reported on owners’ personal income tax returns, avoiding double taxation

Management: Greater flexibility than Professional Corporations—typically don’t require formal board of directors for day-to-day management

State-Specific: Not all states offer PLLC as an entity type. Requirements vary significantly by state and profession.

Who Can Form a PLLC?

Licensed Professionals Only

Only licensed professionals can form a PLLC. Almost any business owner can form a standard LLC, but PLLCs can only be formed by professionals who have a special license, registration, or certification with the state to provide their services.

Common licensed professions that may form PLLCs include:

Healthcare Professionals:

  • Physicians (MDs, DOs)
  • Dentists (DMDs, DDSs)
  • Chiropractors
  • Physical therapists
  • Veterinarians
  • Psychologists and psychiatrists
  • Nurses (in some states for advanced practice)
  • Optometrists

Legal Professionals:

  • Attorneys and lawyers
  • Paralegals (if licensed in state)

Accounting and Finance:

  • Certified Public Accountants (CPAs)
  • Enrolled Agents (in some states)

Engineering and Architecture:

  • Licensed Professional Engineers
  • Registered Architects
  • Land Surveyors

Other Licensed Professions:

  • Real estate brokers (in some states)
  • Insurance agents (in some states)
  • Pharmacists
  • Social workers (if licensed)
  • And many other state-licensed professions

Important: Which professions can or must form PLLCs varies by state. Your state’s professional licensing board determines whether your specific profession requires PLLC, allows choice between PLLC and LLC, or uses different professional entity types.

✅ VERIFY BEFORE FORMING: State & Licensing Requirements

Not All States Have PLLC Entity Type

Before attempting to form a PLLC, verify:

1. Does your state offer PLLCs?

  • Some states have PLLC statutes
  • Other states use Professional Corporations (PC) or Professional Associations (PA)
  • Some states allow licensed professionals to form standard LLCs

2. Does your profession require PLLC in your state?

  • State professional licensing laws vary
  • Your licensing board determines entity requirements
  • Some professions must use PLLC; others have choice

3. Does formation require licensing board approval?

  • Some states require pre-approval from licensing board
  • Some require proof of professional license with formation filing
  • Filing without proper approval may be rejected

YOU MUST CONSULT:

✅ Your state’s professional licensing board
✅ An attorney practicing in your professional field
✅ Your state’s Secretary of State office

USA Corporate Services cannot advise on:

  • Whether your profession requires PLLC in your state
  • Professional licensing compliance
  • Which entity type your licensing board permits

We handle document preparation after you’ve verified PLLC is the correct entity type for your profession and state.

PLLC vs LLC vs Professional Corporation: Key Differences

Ownership Comparison

Entity Type Who Can Own
LLC
Open to all industries without specialized license
PLLC
Only licensed professional individuals
Professional Corporation (PC)
Licensed professionals (similar to PLLC)

PLLC ownership restrictions:

  • All members must be licensed professionals
  • Usually same profession or closely related fields
  • Non-licensed individuals cannot be PLLC members
  • Even spouses or family members need professional license to own shares

Example: A medical PLLC can only have licensed physicians as members. The physician’s spouse cannot own shares unless also a licensed physician.

Liability Protection Comparison

Entity Type Business Debts Others’ Malpractice Own Malpractice
LLC
✅ Protected
N/A
N/A
PLLC
✅ Protected
✅ Protected
❌ NOT Protected
PC
✅ Protected
✅ Protected
❌ NOT Protected

Critical distinction:

Both LLCs and PLLCs give owners limited liability for business debts and obligations. A PLLC additionally provides owners protection from malpractice claims against other owners.

But you’d be responsible for any claims against your business that are caused by your own malpractice.

Concrete example: If an accountant in a PLLC mishandles a client’s money, the PLLC does not provide liability protection for that malpractice. The accountant’s personal assets are at risk to satisfy a malpractice judgment.

Licensing Requirements

Entity Type Professional License Required
LLC
No specialized professional license required
PLLC
Must satisfy state regulations for licensed practitioners
PC
Professional license required (similar to PLLC)

PLLC licensing compliance:

  • All members must maintain active professional licenses
  • Licenses must be current and in good standing
  • Some states require annual certification of licenses
  • Loss of professional license may affect PLLC membership

Taxation Comparison

PLLC tax benefits:

  • Pass-through taxation avoids double taxation
  • Profits and losses reported on personal income tax returns
  • Can elect S-Corp or C-Corp taxation if beneficial

For tax advice about PLLC vs. other professional entity types, consult a licensed CPA.

Entity Type Default Tax Treatment
LLC
Pass-through (profits/losses to members)
PLLC
Pass-through taxation
PC
Corporate taxation (double tax) OR S-Corp election

Professional Malpractice Liability: What You Must Know

PLLC Does NOT Protect From Your Own Malpractice

The most critical misunderstanding about PLLCs:

Professionals sometimes believe forming a PLLC protects them from malpractice liability. This is false.

What PLLC liability protection actually provides:

✅ Protected from:

  • Business debts and financial obligations
  • Contractual liabilities of the PLLC entity
  • Other members’ professional malpractice claims
  • General business lawsuits

❌ NOT protected from:

  • Your own professional malpractice or negligence
  • Your own errors, omissions, or mistakes
  • Claims arising from your professional services
  • Violations of professional standards of care

Real-world scenarios:

Scenario 1 – Medical PLLC: Dr. Smith and Dr. Jones operate a medical PLLC. Dr. Smith commits malpractice causing patient harm.

  • Result: Patient can sue Dr. Smith personally and claim Dr. Smith’s personal assets
  • Dr. Jones is protected from Dr. Smith’s malpractice
  • But Dr. Smith has NO protection from the PLLC for their own malpractice

Scenario 2 – Accounting PLLC: Three CPAs operate a PLLC. One CPA mishandles client funds (professional negligence).

  • Result: That CPA is personally liable
  • The CPA’s personal assets (home, savings, investments) are at risk
  • Other PLLC members are protected
  • The malpracticing CPA has no PLLC protection

You MUST Carry Professional Malpractice Insurance

Professional liability insurance (malpractice insurance) is essential:

“For this reason, it’s very important for members of a PLLC to carry professional liability insurance, more commonly known as malpractice insurance.”

Malpractice insurance provides:

  • Coverage for professional negligence claims
  • Legal defense costs for malpractice lawsuits
  • Settlement or judgment payment (up to policy limits)
  • Protection of personal assets from malpractice claims

PLLC + malpractice insurance together provide:

  • PLLC: Protection from business debts and others’ malpractice
  • Insurance: Protection from your own malpractice claims

Without malpractice insurance:

  • Your personal assets are fully exposed to malpractice claims
  • PLLC provides no protection for professional negligence
  • One lawsuit could bankrupt you personally

PLLC is NOT a substitute for malpractice insurance.


State-Specific PLLC Requirements and Availability

States Vary Significantly on Professional Entities

PLLC availability and requirements differ dramatically by state:

Category 1: States Requiring PLLCs for Certain Professions

  • Licensed professionals MUST use PLLC (cannot use standard LLC)
  • Specific professions mandated by state law
  • Example: New York requires certain licensed professionals to form PLLC

Category 2: States Allowing PLLCs as Option

  • Licensed professionals CAN choose PLLC or LLC
  • Professional has flexibility in entity selection
  • Example: Florida allows certain professionals to form PLLC but also permits Professional Associations

Category 3: States Without PLLC Entity Type

  • State doesn’t have PLLC statute
  • Professionals use Professional Corporation (PC) or Professional Association (PA)
  • Standard LLC may or may not be allowed for professionals

Category 4: States Allowing Standard LLCs for Professionals

  • No PLLC requirement
  • Licensed professionals can form regular LLCs
  • Professional licensing board determines eligibility

Examples from Context:

New York: “New York requires certain licensed professionals to form a PLLC”

Florida: “Florida allows certain professionals to form PLLC but also permits Professional Associations (PAs)”

Verify Requirements Before Formation

Step 1 : Contact Your State’s Professional Licensing Board

Your licensing board determines:

  • Whether your profession can use PLLC, PC, or LLC
  • Entity formation requirements for licensed professionals
  • Whether licensing board approval needed before formation
  • Ongoing compliance requirements for professional entities

Common professional licensing boards:

  • State Medical Board (physicians)
  • State Bar Association (attorneys)
  • State Board of Accountancy (CPAs)
  • State Board of Professional Engineers
  • State Dental Board
  • And profession-specific boards for your field

Step 2: Consult an Attorney in Your Professional Field

An attorney practicing in your profession can advise on:

  • Entity type requirements for your profession in your state
  • Professional liability implications of PLLC vs. PC vs. LLC
  • Operating agreement provisions for professional practice
  • Professional ethics rules governing entity structures
  • Malpractice insurance requirements

Step 3: Verify with Secretary of State

Your state’s Secretary of State can confirm:

  • Whether your state offers PLLC entity type
  • Filing requirements for professional entities
  • Special documentation needed (proof of license, etc.)
  • Annual compliance obligations for PLLCs

USA Corporate Services can help AFTER you’ve verified PLLC is correct entity for your profession and state.

How to Form a PLLC

BEFORE starting formation, complete verification steps above.

Formation Process (After Verification)

Step 1: Verify State Allows PLLCs and Your Profession Qualifies

  • Consult professional licensing board
  • Confirm PLLC available in your state
  • Verify your profession permitted to use PLLC
  • Obtain licensing board approval if required

Step 2: Choose Business Name

  • Must comply with state naming requirements
  • Often must include “PLLC” or “Professional Limited Liability Company”
  • May require identification of profession (e.g., “Smith Medical PLLC”)
  • Check name availability with Secretary of State

Step 3: Prepare Articles of Organization

  • Identification of profession
  • Licensed member information
  • Registered agent with physical state address
  • Professional licensing verification may be required

Step 4: File with Secretary of State

  • Submit Articles of Organization
  • Include proof of professional licensure if required
  • Pay state filing fee (varies by state)
  • Provide licensing board approval if required by state

Step 5: Create Operating Agreement

  • Define member licensing requirements
  • Professional practice management structure
  • Malpractice insurance requirements
  • Member withdrawal provisions (what if license lost)
    Compliance with professional ethics rules

Step 6: Obtain EIN from IRS

  • File Form SS-4 for Employer Identification Number
  • Select “LLC” entity classification (PLLC is state designation)
  • Free from IRS

Step 7: Obtain Required Insurance

  • Professional malpractice insurance (required)
  • General liability insurance
  • Business property insurance if applicable

Step 8: Register with Professional Licensing Board

  • Notify board of PLLC formation (if required)
  • Submit entity information
  • Maintain ongoing compliance with board rules

USA Corporate Services handles Steps 2-6 (document preparation and filing). You handle Steps , 7, and 8 (professional licensing compliance).

PLLC Additional Professional Costs

Licensing board fees (if approval required):

  • Varies by state and profession
  • 50-500 depending on jurisdiction
  • Not all states require licensing board approval

Professional malpractice insurance (REQUIRED):

  • Physicians: 4,000-20,000+ annually (varies by specialty)
  • Attorneys: ,000- ,000+ annually (varies by practice area)
  • CPAs: ,000-5,000+ annually
  • Other professions: Varies significantly

Operating agreement (custom drafted for professionals):

  • Attorney fees: ,000-3,000+
  • Professional practice-specific provisions
  • Malpractice insurance requirements
  • Professional licensing compliance clauses

When to Consult an Attorney or Licensing Board

USA Corporate Services provides formation document preparation, NOT professional licensing advice.

You MUST Consult an Attorney If You:

Need professional entity advice:

  • Determine whether your profession requires PLLC vs. allows LLC in your state
  • Understand professional liability protection differences between entity types
  • Draft operating agreement with professional practice provisions
  • Navigate professional ethics rules governing entity structures
  • Handle multi-state professional practice entity requirements

Face professional liability questions:

  • Malpractice liability implications of PLLC vs. PC vs. LLC
  • Professional malpractice insurance coverage requirements
  • Liability protection limits of PLLC for your profession
  • Personal asset protection strategies for professionals

Have complex professional practice structures:

  • Multiple licensed professionals with different specialties
  • Multi-state professional practice (licensed in multiple states)
  • Partnership buy-sell provisions for professional practices
  • Professional practice sale or succession planning

You MUST Consult Your State’s Professional Licensing Board:

Your licensing board determines:

  • Whether your profession can form LLC or requires PLLC
  • Professional entity formation requirements and approvals needed
  • Ethics rules governing professional practice business structures
  • Continuing education or compliance obligations for PLLC members
  • Whether licensing board approval required before formation

Common licensing boards:

  • State Medical Board (physicians, healthcare professionals)
  • State Bar Association (attorneys)
  • State Board of Accountancy (CPAs)
  • State Board of Professional Engineers
  • State Dental Board (dentists)
  • Profession-specific boards for your field

Consult a CPA or Tax Advisor If You:

Have tax questions about professional entities:

  • Tax implications of PLLC vs. LLC vs. PC for your profession
  • S-Corp election for professional entities
  • Self-employment tax vs. reasonable compensation strategies
  • Multi-state tax obligations for professional practice
  • Tax deductions for professional malpractice insurance

USA Corporate Services Can Help With:

Formation document preparation (after verification):

  • PLLC Articles of Organization preparation
  • Filing with Secretary of State (after licensing requirements met)
  • Registered agent service in your state
  • Operating agreement template (customize with attorney)
  • EIN application assistance (Form SS-4)

General information:

  • PLLC vs. LLC distinctions
  • State filing fees and processing times
  • Annual compliance requirements by state

USA Corporate Services Cannot Advise On:

Professional licensing matters:

  • Whether your profession requires PLLC in your state
  • Professional licensing compliance or entity approval requirements
  • Malpractice liability protection implications
  • Professional ethics rules or licensing board requirements
  • Whether to form PLLC vs. PC vs. LLC for your profession

For professional entity questions: Consult your licensing board and an attorney in your field

How USA Corporate Services Helps Licensed Professionals

PLLC Formation Services (After Licensing Verification)

USA Corporate Services provides PLLC formation document preparation in states that allow PLLCs:

✓ PLLC Articles of Organization preparation

  • Profession identification and specification
  • Licensed member information
  • Registered agent designation (USA Corporate Services provides)
  • State-specific PLLC formatting

✓ Registered Agent Service

  • Physical address in your state (required)
  • Document receipt and forwarding
  • Professional licensing board correspondence
  • Compliance notifications

✓ Operating Agreement Template

  • Customizable for professional practice
  • Professional licensing requirements clause
  • Malpractice insurance requirements
  • Member licensing maintenance provisions

✓ EIN Application Assistance

  • Form SS-4 preparation
  • Professional entity classification
  • IRS submission and follow-up

What YOU must handle:

  • Licensing board consultation and approval
  • Professional liability insurance procurement
  • Professional licensing compliance
  • Ongoing license maintenance
  • Professional ethics compliance

Our Process for Professional Entities

1. You verify PLLC requirements:

  • Consult your state’s professional licensing board
  • Consult an attorney in your professional field
  • Obtain required licensing board approvals
  • Verify PLLC is correct entity for your profession and state

2. You provide to USA Corporate:

  • Licensing board approval documentation (if required)
  • Professional license number and verification
  • PLLC member information (all licensed professionals)
  • Business name complying with professional naming rules
  • Registered agent preference

3. USA Corporate Services prepares and files:

  • PLLC Articles of Organization
  • Registered agent designation
  • State filing submission
  • Certified document delivery

4. Post-formation compliance:

  • Annual report reminders (if applicable in your state)
  • Professional licensing renewal reminders
  • Good standing maintenance support

Important limitations: USA Corporate Services handles PLLC formation paperwork. We do NOT provide professional licensing advice, malpractice liability guidance, professional ethics consultation, or determination of whether your profession requires PLLC.

For professional entity questions, consult:

  • Your state’s professional licensing board
  • An attorney licensed in your profession
  • A professional liability expert for malpractice insurance guidance


Important Disclaimer

USA Corporate Services provides business formation document preparation and filing services. We are NOT a law firm and do NOT provide legal advice. We are NOT professional licensing consultants. We do NOT provide professional liability or malpractice advice.

PLLC and Professional Licensing Information

The information on this page about PLLCs, professional licensing requirements, and professional liability is for general educational purposes only. Professional licensing laws, malpractice liability rules, and PLLC entity eligibility requirements differ significantly by profession, state, and specific circumstances.

This information does not constitute:

  • Legal advice about professional licensing or entity requirements
  • Professional liability or malpractice advice
  • Recommendation for PLLC vs. LLC vs. PC for your profession
  • Professional licensing consultation or guidance
  • Determination of which entity type your profession requires in your state
  • Malpractice insurance advice or recommendations
  • Professional ethics guidance

PLLC Requirements Vary Significantly

State variations:

  • Some states require PLLCs for certain licensed professionals
  • Some states allow choice between PLLC, PC, or LLC
  • Some states don’t have PLLC entity type at all
  • Approximately 29 states currently permit PLLCs

Professional variations:

  • Which professions must use PLLCs varies by state
  • Licensing requirements differ by profession and jurisdiction
  • Professional licensing boards determine entity eligibility

You MUST verify with authoritative sources:

  • Your state’s professional licensing board
  • An attorney licensed in your professional field
  • Your state’s Secretary of State office

Critical Malpractice Liability Limitation

PLLCs do NOT protect members from personal malpractice liability.

“PLLC members remain personally liable for their own professional malpractice” . If you commit professional malpractice or negligence, clients can sue you personally and claim your personal assets.

Professional malpractice insurance is essential and NOT replaced by PLLC formation.

“It’s very important for members of a PLLC to carry professional liability insurance, more commonly known as malpractice insurance.”

USA Corporate Services and Limitations

USA Corporate Services CAN help with:

  • PLLC formation document preparation (after licensing verification complete)
  • Filing Articles of Organization with Secretary of State
  • Registered agent service in your state
  • Operating agreement template (customize with attorney)
  • EIN application assistance
  • General information about PLLC vs. LLC distinctions

USA Corporate Services CANNOT advise on:

  • Whether your profession requires PLLC in your state
  • Professional licensing compliance or entity approval requirements
  • Malpractice liability protection implications
  • Professional ethics rules or licensing board requirements
  • Whether PLLC vs. PC vs. LLC is better for your professional practice
  • Malpractice insurance coverage or requirements

For Advice Specific to Your Situation:

Consult your state’s professional licensing board:

  • Determine whether your profession can use PLLC, PC, or LLC
  • Understand entity approval process and requirements
  • Verify ongoing compliance obligations for professional entities
  • Clarify professional ethics rules governing business structures

Consult a licensed attorney in your professional field:

  • Legal advice about entity type requirements
  • Professional liability protection implications
  • Operating agreement provisions for professional practice
  • Multi-state professional practice entity requirements
  • Professional malpractice liability exposure

Consult a CPA or tax advisor:

  • Tax implications of PLLC vs. LLC vs. PC
  • Tax treatment of professional services income
  • Self-employment tax vs. S-Corp election for professionals
  • Tax deductions for malpractice insurance premiums

USA Corporate Services prepares and files formation documents based on information and licensing verifications you provide. We are responsible for accurate document preparation and timely filing. We are not responsible for professional licensing determinations, malpractice liability assessments, or professional practice compliance decisions.

For questions about our PLLC formation services, contact us at info@usa-corporate.com or +1-212-239-5050.

For professional licensing questions, contact your state’s licensing board.
For legal questions about professional entities, consult an attorney in your field.
For malpractice insurance questions, consult a professional liability insurance specialist.

Professional Licensing Board Approval Process

Step-by-Step Pre-Formation Requirements

The process to form a PLLC involves additional steps, such as obtaining state licensing board approval:

Step 1a: Verify PLLC Requirements with Professional Board

Before filing any formation documents:

  • Contact your state’s professional licensing board
  • Verify PLLC is permitted entity for your profession
  • Confirm licensing board approval process
  • Obtain required pre-approvals or certifications

Step 1b : Comply with State Regulation

“Each state has a regulation for approving your PLLC. So, as soon as you decide to start your professional LLC, you must receive approval from the state. Different regulatory organizations oversee diverse departments (professionals). Approval comes once the [licensing requirements are met].”

Common licensing board requirements:

  • Proof of current professional license (active and in good standing)
  • Certificate of good standing from licensing board
  • Professional liability insurance certificate
  • Background check or ethics clearance
  • Continuing education compliance verification
  • Application fees to licensing board

Step 2: Prepare PLLC Formation Documents

After obtaining licensing board approval:

  • Articles of Organization prepared
  • Identification of specific profession included
  • Licensed member information provided
  • Licensing verification attached (if required by state)

Step 3: File with Secretary of State

Submit PLLC formation documents:

  • Articles of Organization for PLLC
  • Licensing board approval documentation (if required)
  • Proof of professional licensure
  • State filing fee
  • Registered agent designation

Processing varies by state:

  • Some states require licensing board approval before accepting filing
  • Other states accept filing then verify license afterward
  • Processing times: -7 business days depending on state

USA Corporate Services prepares formation documents after you’ve obtained required licensing board approvals and verified PLLC is correct entity type for your profession and state.

Frequently Asked Questions

What is a PLLC?

A Professional Limited Liability Company (PLLC) is a business entity designed for licensed professionals such as lawyers, doctors, architects, engineers, and accountants whose occupation requires a state license. PLLCs provide limited liability for business debts while allowing pass-through taxation. However, PLLC members remain personally liable for their own professional malpractice—PLLCs do NOT protect from personal professional negligence. Not all states offer PLLC entity type; some use Professional Corporations instead. State requirements vary significantly.

Who needs a PLLC vs. can use regular LLC?

Only licensed professionals can form PLLCs—all members must hold active professional licenses in the same or related profession. Whether you need a PLLC vs. can use regular LLC depends on your state’s laws and professional licensing board requirements. Some states require PLLCs for certain professions; other states allow licensed professionals to choose between PLLC and LLC; some states don’t have PLLC entity type at all. You must consult your state’s professional licensing board to determine requirements for your specific profession. USA Corporate Services cannot advise whether your profession requires PLLC.

Does PLLC protect me from malpractice liability?

No, PLLCs do NOT protect you from your own professional malpractice liability. PLLC members remain personally liable for their own professional negligence. If you commit malpractice, clients can sue you personally and claim your personal assets. PLLCs protect you from business debts and other members’ malpractice claims , but not from your own professional errors or negligence. You MUST carry professional malpractice insurance—PLLC does not replace professional liability insurance. For advice about professional liability protection, consult an attorney specializing in your profession.

Do I still need malpractice insurance if I have a PLLC?

Yes, you absolutely MUST carry professional malpractice insurance even with a PLLC. “It’s very important for members of a PLLC to carry professional liability insurance, more commonly known as malpractice insurance.” PLLCs do NOT protect you from your own professional malpractice—if you commit professional negligence, you are personally liable. Your personal assets (home, savings, investments) are at risk without malpractice insurance. PLLC protects from business debts and other members’ malpractice , but professional liability insurance protects from your own malpractice claims. Both are essential for professional practice protection.

Which states allow PLLCs?

PLLC availability varies significantly by state. Some states have PLLC statutes allowing licensed professionals to form PLLCs. Other states use Professional Corporations (PC) or Professional Associations (PA) instead of PLLCs. Some states allow licensed professionals to form standard LLCs without requiring PLLC entity type. Examples: New York requires certain licensed professionals to form PLLCs; Florida allows certain professionals to form PLLCs but also permits Professional Associations. You must verify with your state’s Secretary of State whether PLLCs are available and with your professional licensing board whether your profession can use PLLC in your state.

What’s the difference between PLLC and LLC?

The key differences are ownership and licensing requirements. LLC: Open to all industries without specialized license—anyone can form. PLLC: Only licensed professional individuals can own shares—all members must be licensed. Both provide limited liability for business debts. Both offer pass-through taxation. However, PLLCs have additional restriction: all members must maintain active professional licenses. PLLCs also provide protection from other members’ malpractice , but critically, PLLC members remain personally liable for their own professional malpractice. Standard LLCs have no licensing requirements.

Can non-licensed people own shares in PLLC?

No, PLLC ownership is restricted to licensed professionals only. States regulate who can form a PLLC, and many require all members to hold the relevant professional licenses. All PLLC members must be licensed in the same or closely related profession. Non-licensed individuals, including spouses, family members, or business partners without professional credentials, cannot own PLLC membership interests. If you want to bring in non-licensed partners or investors, you may need to use a different entity structure. Consult an attorney about entity options for your professional practice with mixed ownership.

Do all states allow PLLCs?

No, not all states permit PLLCs. According to available data, approximately 29 states allow PLLC entity type including Arizona, Arkansas, Colorado, District of Columbia, Florida, Idaho, Iowa, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nevada, New Hampshire, New York, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, and West Virginia. States not listed may require Professional Corporations (PC) or allow licensed professionals to form standard LLCs. Verify with your state’s Secretary of State and professional licensing board before formation.

Source: State PLLC statute research

What professions require PLLCs?

Which professions require PLLCs (vs. can use standard LLCs) varies significantly by state. Common licensed professions that may need PLLCs include: healthcare (doctors, dentists, chiropractors, physical therapists, veterinarians), legal (attorneys), accounting (CPAs), engineering and architecture (licensed engineers, architects), and other state-licensed professions. However, some states require PLLCs for certain professions while allowing standard LLCs for others. For example, if you’re a chiropractor providing chiropractic services, you may need to form a PLLC. If you’re a chiropractor opening a landscaping business, you’d form a traditional LLC. Your state’s professional licensing board determines requirements for your specific profession.

Source: Professional licensing requirements

Do I need licensing board approval to form PLLC?

Many states require obtaining state licensing board approval before forming a PLLC. The process to form a PLLC involves additional steps, such as obtaining state licensing board approval. Step before formation: Verify all PLLC requirements with your professional board and get preapproved. Different regulatory organizations oversee diverse departments (professions)—approval comes from the relevant professional licensing authority for your field. Requirements vary by state: some require pre-approval before filing Articles of Organization, others require proof of licensure with formation documents, and some states have no licensing board approval requirement. Verify with your state’s licensing board before beginning formation.

Source: State PLLC formation procedures

 
John-Gordon

John Gordon

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President -- USA Corporate Services Inc.

John Gordon is the President of USA Corporate Services Inc., with over 40 years of experience helping international entrepreneurs establish and grow businesses in the United States.

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