What does PLLC stand for? PLLC stands for professional limited liability company. It is a type of LLC for licensed professionals, such as doctors, lawyers, accountants and architects, in states that allow or require it. A PLLC protects owners from the business’s debts and from other owners’ malpractice, but not from their own professional mistakes.
What does PLLC mean in business?
A PLLC works much like a regular LLC, with a few extra rules because the owners provide licensed services. In many states, these professionals can’t form a standard LLC for their practice and must use a PLLC or a professional corporation instead.
Common rules for PLLCs include:
- Licensed owners: members usually must hold a license in the profession the PLLC offers.
- One profession per company: many states limit a PLLC to a single type of professional service.
- Licensing board approval: some states require sign-off from the state licensing board before formation.
- Name rules: the name typically must include “PLLC,” “P.L.L.C.” or “Professional Limited Liability Company.”
Rules differ a lot by state, and some states don’t offer PLLCs at all. California, for example, doesn’t allow licensed professionals such as doctors and lawyers to practice through an LLC, so they typically use a professional corporation instead. Before you file, check with your state’s Secretary of State and the licensing board for your profession.
PLLC vs LLC
| PLLC | LLC | |
|---|---|---|
| Who can form it | Licensed professionals, in states that offer it | Almost any business owner |
| Owner requirements | Members usually must be licensed in the profession | No license requirement |
| Liability for business debts | Generally protected | Generally protected |
| Liability for your own malpractice | Not protected | Not applicable |
| Liability for a partner’s malpractice | Generally protected | Not applicable |
| Taxes | Same options as an LLC | Pass-through by default; can elect corporate tax |
| Extra approvals | Often needs licensing board approval | Usually not |
How PLLCs are taxed
For federal tax purposes, a PLLC is treated like an LLC. A single-member PLLC is taxed like a sole proprietorship by default, and a multi-member PLLC is taxed like a partnership. Owners can elect to be taxed as an S corporation or C corporation if it makes sense. Many professionals talk to a CPA about which option lowers their overall tax bill.
Examples of PLLC in emails and documents
Letterhead: “Rivera Family Dentistry, PLLC”
Accountant email: “Because you’re a licensed therapist, your state requires a PLLC rather than a standard LLC.”
Contract: “This agreement is between Chen & Patel Law, PLLC and…”
How to form and use a PLLC correctly
- Check your state’s rules first. Confirm whether your profession must, can or can’t use a PLLC.
- Get licensing board approval if required. Some states won’t accept your filing without it.
- File articles of organization with the Secretary of State and include the correct suffix in the name.
- Get an EIN, open a business bank account and keep finances separate.
- Carry malpractice insurance. A PLLC doesn’t shield you from claims about your own work.
- Keep your license current. Losing it can affect your ability to own the PLLC.
Related terms
See more in our Business and Finance hub.
FAQ
What does PLLC stand for?
PLLC stands for professional limited liability company, a version of the LLC designed for licensed professionals such as doctors, lawyers and accountants.
What is the main difference between a PLLC and an LLC?
A PLLC is for licensed professionals and usually requires owners to hold a license. It also doesn’t protect owners from their own malpractice. An LLC can be formed by almost anyone.
Does a PLLC protect against malpractice?
Not for your own professional mistakes. It generally protects you from the business’s debts and from malpractice claims against other members.
How is a PLLC taxed?
A PLLC is taxed like an LLC. By default it is a pass-through entity, and owners can elect S corporation or C corporation tax treatment.
Can any business form a PLLC?
No. PLLCs are generally limited to licensed professions, and availability depends on the state.
Sources
- U.S. Small Business Administration: Choose a Business Structure
- IRS: Limited Liability Company (LLC)
This article is general information, not legal or tax advice. Check with a qualified professional for your situation.
