What Makes an LLC Different Than a PLLC?

By Elizabeth Rayne

When forming a new business, particularly if professional in nature, you should understand the difference between Limited Liability Companies and Professional Limited Liability Companies. An LLC is a business entity that is formed under state law. Some states allow for the formation of specialized LLCs, such as a the PLLC. Each state has different restrictions on each business type, and LLCs and PLLCs are not business entities that are available in every state.

Limited Liability Corporations

An LLC, in general, is a kind of hybrid between a corporation and partnership. An LLC provides a flexible management structure similar to a partnership. However, unlike a partnership, if the business is sued or goes bankrupt and cannot pay its debts, the members are not usually personally responsible. Each member's liability is limited to how much they contributed to the business, meaning that if a member contributed $1,000 to the startup capital of the business, she may not get this back if the LLC does not make money.

LLC Membership

In an LLC, there is no limitation on who may be an owner, or member. The business may be owned by one or more individuals and/or other business entities. Generally, an LLC may be organized for any type of business from retail to landscaping. However, some states provide that specific business types are barred from forming an LLC. This usually includes businesses in professional fields.

Ready to start your LLC? Start an LLC Online Now

PLLC Restrictions

In contrast, the members of a PLLC must usually be licensed professionals. In most states, there is a specific list of professions that may pursue a PLLC, such as accountants, attorneys or architects. Businesses that do not fall into one of the categories are not allowed to form a PLLC. When registering the PLLC, you will likely be required to provide proof that every member of the PLLC is properly licensed in the profession. No other business, nor a person not licensed in the profession, may be a member of a PLLC.

PLLC Liability

In many states, members of a PLLC remain personally liable for malpractice claims. For example, if a patient sues a doctor for malpractice, the doctor may be personally liable even if she is a member of a PLLC. However, other members of the PLLC may not be liable for the other doctor's malpractice claims. It is in the best interest of PLLC members to hold professional liability insurance. However, like an LLC, PLLC members will not be personally liable for the debts of the business unrelated to malpractice claims, such as payment due on leased office space.

Ready to start your LLC? Start an LLC Online Now
Can Accountants Form an LLC?


Related articles

Is a 1099 Required for an LLC?

A limited liability company, or LLC, is a relatively modern business organization that provides business owners with a great deal of flexibility in management and taxation. The IRS does not have a specific designation for LLCs, so owners may elect partnership taxation or corporate taxation. But the IRS does have requirements regarding independent contractors. Therefore, LLCs that use independent contractors or other professional services typically fall within IRS 1099 requirements.

Difference Between LLC & LLP

An important aspect of starting a business is choosing which type of business entity to create. Two popular business entities are limited liability companies, or LLCs, and limited liability partnerships, or LLPs. Each entity has unique characteristics, but both are also similar in many ways, including the way they are taxed by the IRS.

What Financial Liability Does Each Member of an LLC Accrue?

Limited liability companies play a valuable role in today's business world and are a common alternative to corporations. LLCs must be organized under state law and exist independently of the members. Owners of this type of business structure are generally free from personal liability for company debts beyond the loss of any investments. However, the shield is not absolute, and owners can be responsible if a business debt was personally guaranteed or any fraud or commingling of assets occurred.

LLCs, Corporations, Patents, Attorney Help LLCs

Related articles

What Is a Professional Limited Liability Company?

The exact definition of a professional limited liability company (PLLC) may vary from state to state. Some states ...

LLC Vs. PC Solo Practice

Limited liability companies and professional corporations are two forms of business structure available in most states ...

What's an LLC?

An LLC, or limited liability company, is a flexible form of business entity that provides its owners with the safeguard ...


A PA, or professional association, is a business entity that is limited to specific professions. In contrast, an LLC, ...

Browse by category
Ready to Begin? GET STARTED