PLLC stands for professional limited liability company. Like a traditional LLC, a PLLC combines the tax benefits of a sole proprietorship with the limited liability protections of a corporation. However, because PLLCs serve high-liability professions, they face increased oversight and more regulations. Not all states recognize PLLCs, but in some states (like Texas) businesses that render professional services must form as a PLLC instead of a traditional LLC.
What is a Texas PLLC?
A Texas PLLC can be owned by a professionally licensed individual, or by association whose members are licensed professionals. Some common professions that require licensing include medicine, law, accounting and architecture.
Only the following industries may form professional associations in Texas:
- Doctors of medicine
- Doctors of osteopathy
- Mental health professionals
- Therapeutic optometrists
Should I choose a PLLC or an LLC?
If you provide a professional service, you may be required to form a PLLC in Texas. But it depends on your industry. The Texas Secretary of State provides a chart that shows a list of professional services and which business type(s) they can lawfully form.
For example, a physician may form a PLLC or a PA (professional association), while a surgical assistant may only form an LLC or an FP (for-profic corporation). A chiropractor, on the other hand, may form any of those four entity types.
How do I form a PLLC?
To create a Texas PLLC, you’ll follow many of the same steps you’ll take to form a Texas LLC, like designating a register agent, filing formation documents with the state, paying the associated fee ($300), creating an operating agreement, and obtaining an EIN. However, there are a couple other points to keep in mind:
1. Business Name
Texas requires all PLLCs to include the phrase “professional limited liability company” (or some variation thereof) in their company name.
2. Certificate of Formation
Texas has a formation document specific to PLLCs, called Form 206.
For more on PLLCs, see Northwest’s page: State-by-State Requirements for Professional Entities in All 50 States.