Does a PLLC protect me from malpractice lawsuits?

No. A PLLC protects your personal assets from general business debts, but it does NOT shield you from claims arising from your own professional malpractice or negligence. You need professional malpractice insurance for that protection. This is the most common misconception about PLLCs.

Which states require a PLLC for professionals?

Requirements vary by state and profession. States like California, New York, Texas, and most others require licensed professionals to form a PLLC or PC (Professional Corporation). A few states like Alaska, Colorado, and New Hampshire allow licensed professionals to use a regular LLC. Always check with your state licensing board.

Can a non-licensed person own part of a PLLC?

Generally no. PLLC ownership is restricted to individuals who hold the relevant professional license. If your business has both licensed and non-licensed owners, you may need a different structure (such as a management company LLC that contracts with the PLLC).

Is a PLLC taxed differently than an LLC?

No. A PLLC has the same tax treatment options as a regular LLC — pass-through by default, with the option to elect S-Corp or C-Corp taxation. The 'professional' designation affects liability and ownership rules, not tax treatment.

2026 Comparison

LLC vs PLLC: Which Is Right for Your Business?

A Professional Limited Liability Company (PLLC) is a special type of LLC required in many states for licensed professionals such as doctors, lawyers, accountants, architects, and engineers. The key difference is who can own it: only licensed professionals in the same field can be members of a PLLC, while anyone can own a regular LLC.

Feature	LLC	PLLC
Who can form it	Anyone	Only state-licensed professionals
Liability protection	Personal assets protected from business debts	Same, but NOT protected from your own professional malpractice
Formation document	Articles of Organization	Articles of Organization for PLLC (some states)
State filing fee	Varies by state ($50-$500)	Same as LLC in most states
Operating agreement	Recommended	Required in most states
Tax treatment	Pass-through (default)	Pass-through (default) — same as LLC
Professional license required	No	Yes — must maintain active license
Malpractice insurance	Optional (recommended)	Often required by state

LLC: Pros, Cons, and Best For

Understanding the strengths and weaknesses of a LLC is essential for making an informed decision. Here is a detailed breakdown of what you can expect.

Advantages of LLC

No professional license requirement
Simpler formation process
Broader ownership flexibility
Works for any business type

Disadvantages of LLC

Licensed professionals in certain states CANNOT use a regular LLC — must use PLLC
Does not signal professional credentials to clients

LLC Is Best For

Any business that does not require a professional license
Freelancers, e-commerce, real estate investors, consultants (non-licensed)

PLLC: Pros, Cons, and Best For

Now let us look at the other side. Here is what you need to know about a PLLC and when it makes sense for your situation.

Advantages of PLLC

Required in many states for licensed professionals
Provides liability protection for business debts (not malpractice)
Signals professional standing to clients and partners
Same tax flexibility as a regular LLC

Disadvantages of PLLC

Only available to licensed professionals
Does NOT protect against your own professional malpractice claims
Members must maintain active professional licenses
Malpractice insurance often required

PLLC Is Best For

Doctors, dentists, and healthcare practitioners
Lawyers and attorneys
CPAs and accountants
Architects, engineers, and licensed consultants

Which Should You Choose? Decision Guide

Use this quick decision guide to match your situation to the right entity structure. Consider multiple criteria — the right choice depends on your specific circumstances, goals, and priorities.

If you are a licensed professional (doctor, lawyer, cpa):Check your state's rules — many require a PLLC. If your state requires it, you must form a PLLC.

If you are not a licensed professional:Regular LLC. You cannot form a PLLC without a professional license.

If you want malpractice protection:Neither an LLC nor a PLLC protects you from your own professional malpractice. You need malpractice insurance for that.

If your state does not require pllc for your profession:You can use a regular LLC even as a licensed professional in some states. Check your state's professional licensing board.

Frequently Asked Questions

Ready to Form Your Business?

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