If you worked hard to become a licensed professional in your field, you may need the protection a PLLC can provide!
We've covered limited liability companies in the past, but today we're covering the LLC's lesser know sibling, the professional limited liability company. While normal LLCs are available to most businesses, PLLCs help professionals in certain fields mitigate their risk. Think doctors, lawyers, massage therapists, etc.
While many people who hold these positions are employees of the hospitals, spa, or businesses where they work, those who decide to "hang their shingle" and go into private practice can are essentially running their own business and are subject to the same risks that any other business owner faces. This means they need similar protections. Let's dig in!
What is a Professional Limited Liability Company?
Professional limited liability companies or PLLCs are a unique type of LLC which caters to people who provide services which require a license to perform. There are two things that occur as professionals establish themselves in private practice that might make PLLCs a necessary step for some professionals.
First, it is often more practical for professionals to create partnerships amongst themselves to cut costs and better accommodate their clients. For example, any of us go to a general practitioners or take our kids to pediatricians where there are a number of doctors in the same office.
Second, no matter how skillful and diligent a professional is there are instances where a they can be accused of malpractice. Consider an esthetician who may provide their client with a chemical peel that causes an unforeseen reaction on their clients face which the client then decides to sue over.
Now consider these two factors in one situation. What if you are a professional who's partnered with another professional who is the accused of malpractice. Should you be held responsible for your partner's mistake? What can you do to protect yourself from this happening? This is where a PLLC is beneficial as it does not only provide the members the same general protections of an LLC, but it also protects its members from malpractice performed by another member of the PLLC.
Did You Know: Unlike LLCs which are open to any business owner, the members of a PLLCs must all be licensed professionals in the same field of services and need the approval of their licensing agency.
Who Can Start a PLLC
Since a PLLC requires members to have a licenses, only certain professionals are eligible to open one. This includes:
Real estate agents
Lawyers
Nail Technicians
Social workers
Accountants
Veterinarians
Doctors
Engineers
Estheticians
Veterinarians
Architects
Psychologists
Dentists
Chiropractors
Massage Therapists
Other licensed professions
Which industry do you think most benefits from PLLCs?
Healthcare (Doctors, Dentist, Chiropractors, etc.)
Technical (Engineers, Architects, Accountants, etc.)
Legal (Lawyers, etc.)
Personal Care (Massage Therapists, Estheticians, etc.)
Where Can You Start an PLLC
Unfortunately, not all states allow their citizens to establish PLLCs. The states that do are:
Arkansas, Arizona, 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
If you live in a state that doesn't recognize PLLCs, you may need to consider a professional corporation of an LLC.
How To Get Started
Since we work with clients in all 50 states, we can help establish your PLLC if it makes sense for your business. Schedule a business growth consultation with us so we can help you choose the perfect structure for your business. Click the button below to get started.
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