To form a PLLC, confirm your state recognizes the structure, verify that your profession and every prospective member qualify, obtain any required licensing board approval, file Articles of Organization with the Secretary of State, adopt an operating agreement, and then get an EIN and open a business bank account. The sequence matters because a few states will not accept your formation paperwork until the licensing board signs off, and the IRS asks you to wait until the state has approved your entity before applying for an EIN.
Confirm Your State Recognizes PLLCs
This is the step most people skip, and it can waste weeks. Not every state has a PLLC statute. California, Delaware, Hawaii, Alaska, Georgia, Wisconsin, and several others do not permit PLLCs at all. In some of those states, licensed professionals must form a Professional Corporation instead. In others, professionals can use a standard LLC. A handful of states sit in between, allowing regular LLCs for professionals but imposing extra requirements on them.
Check with your Secretary of State or licensing board before you prepare any formation paperwork. If your state does not recognize PLLCs, your alternatives are typically a Professional Corporation or, where allowed, a standard LLC, and the liability protections and tax treatment differ between them.
Verify Professional Eligibility
In states that do allow PLLCs, not every profession qualifies. Each state maintains its own list. Doctors, attorneys, accountants, architects, and engineers appear on most lists; other professions may or may not, depending on where you practice.
Every member must hold a current, active license for the services the entity will provide. If one member’s license lapses, it can affect the entity’s ability to operate. Most states require all members to be licensed in the same profession, though some allow closely related professions to share a single PLLC.
Get Licensing Board Approval Where Required
Some states require a certificate of authorization or registration from your professional licensing board before, or shortly after, you file with the Secretary of State. In some states the Secretary of State will not accept your Articles of Organization until the board has signed off. Contact your board early. Ask whether they require pre-approval, what documentation they want, and how long review takes. Discovering this requirement after everything else is prepared creates avoidable delays.
Choose a Name and Registered Agent
Your PLLC’s name must include a designator such as “PLLC,” “P.L.L.C.,” or “Professional Limited Liability Company.” It must also be distinguishable from other entities already registered in your state, and some states require the name to indicate the type of professional service offered. Run a name availability search through your Secretary of State’s website before finalizing anything.
You also need a registered agent with a physical street address in your state of formation. The agent accepts legal documents and official notices on the PLLC’s behalf during business hours. A member can serve as the registered agent, but many professionals use a commercial service. If you are in surgery, in court, or with a client when a process server arrives, a dedicated agent makes sure nothing gets missed.
File the Articles of Organization
The Articles of Organization, called a Certificate of Formation in some states, is the document that officially creates your PLLC. You file it with the Secretary of State, and most states accept online, mail, or in-person filing. The form typically asks for:
- The entity name, including the required PLLC designator
- The professional purpose, meaning the specific licensed service the PLLC will provide
- The registered agent’s name and physical address
- The names, and sometimes addresses, of the organizers or members
Filing fees generally range from about $35 to $500 depending on the state, with most falling between $75 and $200. Processing times vary widely. Some states approve online filings within a day or two; others take several weeks for mailed applications.
A few states impose additional post-filing requirements. New York, for example, requires LLCs and PLLCs to publish a notice of formation in two newspapers within 120 days, with a separate filing fee and newspaper advertising costs on top of the initial formation fee. Failing to comply can result in the entity’s authority to do business being suspended. Check whether your state has any publication or notice requirement after filing.
Adopt an Operating Agreement
An operating agreement is the internal rulebook for your PLLC. Most states do not require you to file it with any government office, but a handful legally require you to have one. Operating without one in any multi-member PLLC invites disputes that the document exists to prevent.
A solid operating agreement covers:
- Ownership percentages for each member
- How profits and losses are allocated, which does not have to follow ownership percentages
- Management structure, meaning whether all members manage or a designated manager runs operations
- Voting rights and what decisions require a majority or unanimous vote
- Procedures for admitting new members, handling buyouts, or dealing with a member’s death or license revocation
- What triggers dissolution and how assets get distributed
For a single-member PLLC, the agreement still matters. It reinforces the separation between you and the entity, which is what protects your personal assets. Without documented separation, a court can treat the PLLC as an alter ego and disregard its liability shield. Have an attorney review the agreement before anyone signs.
Get an EIN and Open a Business Bank Account
An Employer Identification Number is a nine-digit federal tax ID issued by the IRS. Any PLLC with more than one member needs one because the IRS treats multi-member LLCs as partnerships, which file their own returns. A single-member PLLC with no employees and no excise tax liability technically does not need an EIN, but most banks require one to open a business account.
Apply online through the IRS website after the state has approved your Articles of Organization. The IRS specifically warns that applying before your entity exists at the state level can delay the process. The online application is free, takes about 15 minutes, and issues the EIN immediately. It is available Monday through Friday from 6:00 a.m. to 1:00 a.m. Eastern Time, and limited hours on weekends. You can only apply for one EIN per responsible party per day, and the application cannot be saved partway through, so have your information ready before you start.1Internal Revenue Service. Get an Employer Identification Number
With the EIN and filed Articles of Organization in hand, open a dedicated business bank account. Banks generally require the formation documents, the EIN confirmation, personal identification for account signers, and sometimes a copy of the operating agreement.2U.S. Small Business Administration. Open a Business Bank Account Mixing business and personal funds is one of the fastest ways to lose the liability protection a PLLC provides, because courts can pierce the veil of an entity that functions as a personal bank account.
Choose How the PLLC Will Be Taxed
The IRS does not have a special tax classification for PLLCs. It treats them the same as regular LLCs. A single-member PLLC is a disregarded entity that reports income on the owner’s personal return, and a multi-member PLLC defaults to partnership taxation, where the entity files an informational return and each member reports their share on their personal return.3Internal Revenue Service. LLC Filing as a Corporation or Partnership
Under the default classification, members who actively participate in the business owe self-employment tax on their share of profits. For professionals in service-based practices like law, medicine, and accounting, there is essentially no way to avoid self-employment tax on active income under the default structure.
S Corporation Election
A PLLC can elect to be taxed as an S corporation by filing IRS Form 2553. The election does not change the entity’s legal structure, just how it is taxed. S-corp taxation lets working members split income between a reasonable salary, which is subject to payroll taxes, and distributions, which are not subject to self-employment tax. For higher-earning professionals, the payroll tax savings can be significant.
To qualify, the PLLC must be a domestic entity with no more than 100 members, all of whom are U.S. citizens or residents. The entity can have only one class of ownership interest, and certain entities such as insurance companies and financial institutions using specific accounting methods are ineligible.4Office of the Law Revision Counsel. 26 USC 1361 – S Corporation Defined Form 2553 must be filed no later than two months and 15 days after the beginning of the tax year the election should take effect, which means March 15 for calendar-year entities. Every member must sign the form.5Internal Revenue Service. Instructions for Form 2553
C Corporation Election
A PLLC can elect C-corporation taxation by filing Form 8832. This is less common for professional practices because C-corp income is taxed twice, once at the corporate level and again when distributed to members. It can make sense in specific situations, such as when a practice plans to retain significant earnings or wants to offer fringe benefits that are tax-deductible only for C corporations.6Internal Revenue Service. Limited Liability Company – Possible Repercussions Talk to a tax advisor before making either election, because once made, the classification generally cannot be changed again for 60 months.
Know What the PLLC Does Not Protect
The liability protection is real but limited in a way that catches some professionals off guard. A PLLC shields your personal assets from the business’s general debts and obligations. If the practice is sued over a lease dispute, an unpaid vendor, or a slip-and-fall in the waiting room, your house and personal savings are generally protected.
A PLLC does not protect you from your own professional negligence. If you commit malpractice, you are personally liable regardless of the entity structure. The PLLC protects you from another member’s malpractice, not your own. That is why malpractice insurance remains essential after formation. Some states require PLLC members to carry professional liability coverage as a condition of operating, with minimum amounts that vary by profession. Even where insurance is not legally mandated, the PLLC structure assumes you will carry it against your own professional acts.
Stay on Top of Ongoing Compliance
Forming the PLLC is the beginning. Most states require annual or biennial reports filed with the Secretary of State, updating the state on your registered agent, business address, and member information. Filing fees for these reports range from nothing in some states to several hundred dollars in others.
Every member must keep their professional license current and in good standing, which means completing continuing education, paying licensing fees on time, and following the ethical standards set by the profession’s governing board. If a member’s license is suspended or revoked, the PLLC may need to act quickly, whether by removing that member or, in serious cases, dissolving the entity.
Keep the operating agreement updated as circumstances change. New members joining, existing members leaving, changes in profit-sharing, and shifts in management structure should all be reflected. Maintain clean financial records that clearly separate business and personal transactions. An annual review with an attorney or accountant is a small investment against much larger problems later.
Depending on your profession and location, you may also need state or local business licenses, professional permits, or specialty registrations beyond your individual professional license. Those requirements vary by jurisdiction and profession, so research what applies to your specific practice.