What is a Professional LLC in 2021: Comprehensive Guide
What is a Professional LLC
In simple words, PLLC or Professional LLC is a type of LLC that’s designed for licensed professionals, like accountants, real estate people, doctors, dentists, chiropractors.
The fact of the matter is if you’re in a particular profession and your state will have a whole list of these. It’s amazing what’s on the list accountants, real estate people, doctors, dentists, chiropractors, all kinds of people qualify as professionals.
And the state has an interest in protecting a business owner from what happens within the business.
However, if you’re going to be one of these professionals, the state not going to let this corporate shield protect you from your own malpractice from your own screw-up as a professional.
If you’re going to be a professional, we’re going to hold you liable. So in professional corporations or professional LLCs usually have a P alongside them it will protect you from what happens in the company.
If there is a slip and fall in the office or somebody gets hurt, or whatever, not due to your malpractice or your screw-up, then we’ll let this corporate shield protect you.
But if it’s a screw-up of your professional duty, then we’re not going to let the corporate shield protect you, we’re going to go after you. So the architects, everybody that’s the professional, you’re on the line for your liability, even the lawyers, and you’re going to have to answer that.
The Professional LLC usually can only be owned by other professionals of the same profession. That is a restriction on the ownership of those types of companies, either corporate or LLC.
Forming a Professional LLC
The steps to forming a Professional LLC are similar to forming an LLC. Here are the steps to forming an LLC.
- Purchase a Mailing Address: If you are a non-resident, you must have a mailing address to form an LLC.
- Selecting the Name: The next step to form an LLC is to select the name of your LLC.
- Hire a Registered agent: For forming an LLC, you have to hire a Registered agent. Registered agents receive all official mail and processing services on behalf of your business.
- File a Certificate of Formation: In this step of forming an LLC, you have to file the Certificate of Formation with the Department of State, which costs $90.
- Prepare an Operating Agreement: Having an Operating Agreement is not necessary to form an LLC, but it is highly recommended. An Operating Agreement is set out the rights and responsibilities of the members and managers of an LLC.
- Apply for EIN: The next step to form an LLC is to file and pay taxes in the United States your business must obtain an Employer Identification Number (EIN). You can apply for an EIN by completing Form SS-4 with the Internal Revenue Service (IRS).
This is how we will form an LLC now come to Professional LLC. For forming a Professional LLC, you have to file Articles of Organization with your state with all these steps. But before you can do this, you must submit them, along with a certified copy of your license, to your state’s professional licensing board for approval.
In this Comprehensive Guide, I mentioned the details of a professional LLC as well as how to form it. I hope this guide will find beneficial for you😊.