- What is a PLLC? A Professional Limited Liability Company ("PLLC" herein) is an LLC whose members must all be licensed professionals such as doctors, nurses, chiropractors, lawyers, CPAs, architects, etc. Thus, a PLLC is invariably a professional services business. The compensation provision of a PLLC operating agreement is often more complicated than an LLC.
- Special Rule For California. California is the only state that does not allow professionals to operate their practices as LLCs.
- Does PLLC have to be in the named of a professional services LLC? Only in a minority of states is PLLC required to be in the named of a professional services LLC. Those fifteen states are: Arizona, Florida, Idaho, Kentucky, Maine, Maryland, Michigan, Mississippi, New York, Oklahoma, Tennessee, Texas, Virginia, Washington, and West Virginia. In all other states, professional services LLCs use LLC or LC in the name except Minnesota where PLLC, PLC, or LLC are permissible.
- General Features of Form. Our system uses an online questionnaire to guide you through the creation of an PLLC Operating Agreement customized to your responses. Our template contains the following features for LLC Operating Agreement:
- Name your profession;
- Several different member compensation choices tailored for professional services LLCs;
- Name from 1 to 10 PLLC members with their required initial capital contributions and ownership percentages;
- Select state in which LLC shall be formed;
- Select LLC "managers" to run business or be managed by all LLC members collectively (and, if managers, name initial LLC managers);
- Indicate and describe required services and non-cash capital contributions that each member is to provide to the LLC (if any);
- Name Tax Matters Partner for the LLC; and
- Restrict member transfer of LLC units to persons outside the ownership group and select from several options how to handle LLC member death, withdrawal, and removal (similar to corporate buy-sell agreement for shareholders).
- Have a question about PLLCs? Go to Ask a Lawyer.
Links to articles on compensation agreements for professional service practice groups:
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