The letters “LLC” and “PLLC” represent 2 different business formations. Therefore, it is helpful to know the difference between an LLC and PLLC. This article will clear up any confusion about how these 2 entities work.
So, what is the general difference between and LLC and PLLC?
The letters “LLC” and “PLLC” stand for limited liability company and professional limited liability company. A limited liability company is designed to protect a business owner’s personal assets and to limit his or her liability.
On the other hand, a professional limited liability company (PLLC) is set up for professional practices, such as lawyers, architects, dentists, or medical professionals.
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Like the LLC, the PLLC enjoys asset protection and limited liability. Both the LLC and PLLC do not have to report taxes for their business or professional practice. Instead, the owner records his or her income on his or her individual tax return.
According to the Chron website, both LLCs and PLLCs feature some of the same advantages. However, there are some things that are slightly different. While the articles of organization are similar for both entities, a PLLC filing entails more steps.
Typically, the licensed owners of a PLLC must sign all the filing paperwork and add a copy of their professional license or their license number during submittal.
In addition, a PLLC applicant must submit these documents and receive approval from their profession’s licensing board. Like an LLC, all documents must be filed with the Secretary of State where the PLLC is formed.
Because of these added legal requirements, establishing a PLLC typically takes longer than setting up a standard LLC.
Mollaei Legal Tip –
If you live and work in California and some other states in the U.S., you cannot form a PLLC if you offer certified professional services or licensed business services. Instead, in these cases, you must establish a professional corporation or PC.
In addition, California and some other states will not permit LLCs to feature the services of certified or licensed professionals.
If you want to find out more about this legislation and how it may affect the establishment of your professional practice, you need to contact me and my legal team for further details and help.
Book a call to speak to us here: https://mollaeilaw.com. We can help you make sense of the differences in set-up so you can succeed with your business and professional plans.
Is There Any Other Difference between an LLC and PLLC?
Now that you know the primary difference between an LLC and PLLC, you may wonder if there is any other difference that you should note. As indicated, another major difference involves the filing the Articles of Organization.
To help you with the process, I can offer the legal advice and direction you need to avoid making mistakes.
What is the Main Difference between an LLC and PLLC when Filing the Articles of Organization?
When filing the Articles of Organization for a PLLC, you will receive instructions on how to file from both your state’s licensing board and the Secretary of State. This difference between an LLC and PLLC is distinct, as it distinguishes the set-up of your PLLC from that of an LLC formation.
Therefore, during the filing of the articles of organization, a PLLC applicant, as previously mentioned, must get his or her state licensing board’s approval – one step that an LLC can forego.
What is the Difference between an LLC and PLLC with Respect to Naming?
If you name an LLC or PLLC, you need to follow specific naming formalities – formalities that further define the difference between an LLC and PLLC when choosing a name.
While each entity has certain rules it must follow for naming, per the provisions of a state’s law, the reason behind the process is the same. The name should be one that is designed to specify the company’s services without misleading the public.
LLC Name Rules
When naming an LLC, the owner must include the LLC designation after the name, as follow:
- Limited Liability Company
- Limited Liability Co.
PLLC Name Rules
When naming a PLLC, one of the following designations should be placed at the end of the name:
- Limited Liability Company
The professional services provided should be indicated in the PLLC name. If the proposed name of the business includes a reference to a specialization, the company must provide satisfactory proof that it has the authority to use the designation.
While the above information helps you distinguish between the nuances of forming an LLC and PLLC, you still need direct legal guidance when creating either of these 2 entities. You will also need to consult a lawyer when you start operating as an LLC or PLLC.
In addition, I will help your business or practice remain compliant after it begins operations. I am only just an email or phone call away. To schedule a legal consultation, email firstname.lastname@example.org today.
Where There Is No Difference Between an LLC and PLLC
Whether you form an LLC or PLLC, you will experience no difference between an LLC and PLLC with respect to the following:
- You will need to choose a unique business name.
- You will have to select a registered agent to handle the paperwork for formation of you LLC or PLLC. The registered agent should be based in the state where you establish your LLC or PLLC. The agent can be either a person or entity, and should be available during the regular business hours of 9:00 am to 5:00 pm, Monday through Friday. You will also need the registered agent, after forming your LLC or PLLC, to receive regular legal documentation.
- You must file Articles of Organization with the state where your LLC or PLLC is based.
- You have to get an employer identification number, or EIN, so you can file taxes or pay employees, if required. The number will also be needed to establish a business bank account.
- You must open a checking account for your business and set up a merchant’s account to receive payments.
- You will need my legal help to make sure you pay the associated fees for your business and stay compliant. You can always contact me anytime. Email email@example.com when you are ready to begin.
Both an LLC and PLLC are very much alike. Where the 2 entities differ is due to the ownership. While an LLC covers the needs of general business start-ups, a PLLC is designed for professional practices.
What To Do Next
After you note the difference between an LLC and PLLC, you may wonder what you need to do next to form an LLC or PLLC. That is how I can help.
You will need to retain my legal services before you can proceed with the start-up process. I can help you realize your goals of establishing a legal business or professional practice. Email firstname.lastname@example.org now.
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