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Professional LLCs

It is worth noting that if you are setting up a company to practice your profession, you should check to see if your state will require you to set up a Professional Limited Liability Corporation (PLLC) or Professional Corporation (PC).  Most doctors and those in medical practice will be required to do so, but some states require a whole list of other professions as well.

The state has an interest in protecting a business owner form what happens in the business, but not to let the corporate shield to protect professionals from the results of their malpractice.  Some have thought that this means they shouldn’t set up a company at all.  Not so. There is still plenty of protection from the corporate shield for things that might happen at or around your place of business that are not directly related to your practicing your profession.

If your professional practice needs to form a company for limiting business liability, retirement planning or other reasons, then a PLLC is a good option for you. PLLCs do not provide protection from any liabilities coming from malpractice (so malpractice insurance is definitely required) but does offer limited liability for normal business risks.

Because additional charging order protection is offered by the LLC–and PLLC–structure by having multiple members, it is important to know that many states require that all owners of a PLLC be members of the same profession. If any of those members faces economic hardship through malpractice settlement, health costs, bankruptcy, etc., the debtors will only be able to get the economic benefit from the company, rather than controlling membership interests.  The professional and the other members will retain control of the company itself.

The state also has a stake in making sure the proper licenses are held by all professionals, and that there is a proper business license for your company as well.  As a rule of thumb, if your state requires you to have a license in order to practice your profession, then it will probably also require you to form a PC or PLLC if you wish to form a company in order to practice that profession.  Call your state licensing board to determine if a PC or PLLC should be established prior to forming your business.  State by state information for filing to start your business can be found at

Links to the lists for a few states are as follows:


>>>>>California is the only state that does not allow professionals to form PLLCs


New York