Key Takeaways

  • A PLLC (Professional Limited Liability Company) is a specialized LLC designed for licensed professionals, often required by state law for certain vocations.
  • Only individuals with specific state-recognized professional licenses can be members or organizers of a PLLC, though some states allow partial ownership by non-licensed members under defined conditions.
  • The main formation difference from an LLC is that PLLCs must obtain approval from the relevant state licensing board before filing with the Secretary of State.
  • PLLCs provide liability protection for business debts but not for malpractice claims; members remain personally responsible for their own professional negligence.
  • States vary in restrictions on ownership transfers, licensing requirements for organizers, and whether heirs can temporarily hold ownership without a license.

Understanding the meaning of PLLC can be important when you're trying to decide on the specific structure you would like to adopt when you're forming a new business. The PLLC business structure is a specific type of LLC or Limited Liability Company. PLLC stands for Professional Limited Liability Company. In some states, certain professionals are prohibited from forming a general LLC. In these cases, forming a PLLC may be a viable alternative.

PLLC members are required to be licensed in certain types of professions. Those professionals include:  

  • Attorneys  
  • Chiropractors  
  • Architects

A PLLC may be formed in certain states that have laws in place to regulate this specialized type of LLC business structure. Each state's laws will outline which professions are able to form an LLC. These laws may also place restrictions that require members of the PLLC to be licensed in the company's specific vocation. In California, individuals providing a professional service are not allowed to form an LLC of any kind and must consider adopting alternative structures to conduct business in the state.

Formation

There are certain requirements that must be met in order to form a Professional Limited Liability Company. For example, your Articles of Organization must be approved by the local state licensing board. Specific licensing requirements will vary depending on your specific state and profession. Obtaining approval from the state licensing board is an additional step in the formation process for an LLC. This means that it can sometimes take longer to establish a PLLC than it does to form a general LLC.

Once you have gained approval from your local state licensing board you'll need to file your company's Articles of Organization, along with any additional paperwork required by your state, at your local Secretary of State. There is only one main difference between the formation process of a PLLC and that of a general LLC. 

When forming a PLLC, your Articles of Organization need to include a signature belonging to a person who is licensed to carry out your company's specified professional task in the state you intend to do business in. This person, most likely you, will be identified as the company's organizer. This is similar to the incorporation requirements of a professional corporation structure. If necessary, be sure to also include the person's professional license number. 

In some states, the Secretary of State may also want to see a certified copy of the professional individual's relevant license. This requirement is only in place for the company's organizer. If the company includes more than one member, the others are not required to provide proof of their professional licenses, even if they are the same type of professional as the organizer. 

In many states, it is only possible to establish a PLLC if you possess a required professional license. In some cases, it is only necessary for at least half of the company's members to be professionals in a field that relates to the PLLC's primary functions. In other cases, it may be possible for the heir of a member to continue ownership of the company in the event of the original member's death. In most cases it is possible for a person who was previously licensed in a related field and has since retired, to act as a member of the PLLC.

In some states, the organizer of the PLLC is required to be a licensed professional. This person must sign any relevant documents that pertain to the formation of the company. This means that you cannot employ the services of a private organization to form the company for you. 

This restriction may also affect your ability to transfer ownership of the company to another person, although some states do allow for an unlicensed person to act as a member of the company for up to two years after a transfer takes place. After that period expires, however, the member who has accepted the transfer of ownership may be required to obtain proper licensing to maintain their claim to ownership. 

The most common occurrence of this type of transfer is in the event of the original member's death. This two-year grace period provides the individual's heir with enough time to obtain proper licensing, sell, or transfer their ownership while they administer the original member's estate.

PLLC vs. LLC: Key Legal Differences

While both PLLCs and LLCs are limited liability entities, a defined law PLLC is subject to additional rules that align with professional licensing laws. Key distinctions include:

  • Membership Restrictions – In most states, only licensed professionals in the PLLC’s field may be members. By contrast, an LLC can have members with no licensing requirements.
  • Licensing Board Oversight – A PLLC’s Articles of Organization must be pre-approved by the relevant state licensing authority, adding a regulatory step not required for LLCs.
  • Naming Rules – States often mandate that the PLLC’s name include “PLLC” or “Professional Limited Liability Company,” and sometimes the profession itself (e.g., “Smith Law PLLC”).
  • Ownership Transfers – Transfer of ownership in a PLLC may be restricted if the recipient is not licensed; some states allow temporary grace periods for heirs to obtain proper licensing.
  • Liability Limitations – Both entities shield owners from personal liability for business debts, but a PLLC does not protect members from personal liability for their own malpractice or misconduct.

Professional Liability and Insurance Requirements

Forming a defined law PLLC does not eliminate personal exposure to malpractice claims. Each licensed member remains liable for their own professional errors or negligence. However, they are generally protected from liability for other members’ malpractice and for most contractual obligations of the PLLC.

To mitigate personal exposure, many states require PLLCs in certain professions—such as law, medicine, or accounting—to carry professional liability insurance or to provide proof of financial responsibility. The exact coverage amount is typically dictated by state regulations or the licensing board.

State-by-State Variations

The rules governing PLLCs vary significantly by jurisdiction:

  • Prohibited Structures – States like California do not permit PLLCs for most professions, requiring alternative entity forms such as Professional Corporations.
  • License Proportion Requirements – Some states require that all members be licensed, while others permit a set percentage (e.g., 50% or more) of members to hold licenses.
  • Organizer Rules – Certain states mandate that the PLLC’s organizer be a licensed professional, and some restrict the use of third-party formation services.
  • Multi-Profession PLLCs – In a few jurisdictions, professionals from related disciplines may join the same PLLC (e.g., lawyers and accountants), but only if allowed by each profession’s governing board.

Frequently Asked Questions

  1. What is a defined law PLLC?
    A defined law PLLC is a Professional Limited Liability Company formed by licensed legal professionals, subject to state licensing board oversight.
  2. How is a PLLC different from a regular LLC?
    A PLLC is limited to licensed professionals, requires licensing board approval, and has stricter rules on membership and liability.
  3. Does a PLLC protect me from malpractice claims?
    No. While a PLLC shields personal assets from business debts, each member is personally liable for their own professional negligence.
  4. Can a non-lawyer own part of a law PLLC?
    In some states, yes—often subject to ownership percentage limits and approval by the licensing board.
  5. Do all states allow PLLCs for law practices?
    No. Some states, like California, prohibit PLLCs for lawyers and require alternative business structures.

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