Do you have a job that requires a state license, such as a lawyer or accountant? A licensed professional must start business either as a professional limited liability company (PLLC) or a professional company (PC).
PLLCs and PCs are a little different from standard LLCs and companies. These are more specialized entity formations. The integration as PLLC or PC requires proof that the person is a licensed professional. This includes information about their current occupation and specific services.
What does it mean to form a Professional LLC or a Professional Company? Let’s take a look at everything that is involved in the process.
Similar to an LLC, a Professional LLC (PLLC) also separates personal and professional assets with limited liability. A PLLC also has the ability to limit personal liability for claims related to partner negligence, including errors or misconduct. This is particularly useful for multi-partner LLCs. According to the PLLC legislation, the partner who founded the PLLC is not personally responsible for the claims of the partners.
Licensed professionals from a variety of industries can form a PLLC. Here are some examples of professions that require government licenses.
Before filing as a PLLC, you must first check in with your local Foreign Secretary to see if the state has authorized PLLCs. Not every state offers PLLC laws. So it is a good idea to check that your state does this first before you start filing.
A professional company should protect licensed professionals and their personal assets. Similar to LLCs and PLLCs, a PC and a company share liability protection. This creates a separation between the professional and personal assets of the owner and the assets of the company.
Professional businesses are ideal for businesses with multiple partners. A partner who is integrated as a PC is protected against misconduct that can affect other employees in practice. Employees who are not registered as a trade association do not receive the same protection.
This is a pretty similar list to the licensed professionals who may make up a PLLC. Professions that require state licenses in the following fields can form a PC.
Similar to creating a PLLC, you will need to register as a PC with your local foreign minister before submitting it. This is to ensure that state law has approved the professional corporate structure.
If your educational status authorizes PCs, you’ll need to provide evidence of your licensed profession. That evidence is pretty easy to share. For example, it may include your state license in your current professional occupation. You may also be asked to provide a certificate of good standing and other supporting documents requested by the Secretary of State. Once you have the correct evidence, you can start a professional company.