What is a PLLC and How Does it Differ from an LLC?
PLLC stands for professional limited liability company, which is similar to a regular LLC, or limited liability company. The main difference is there are requirements and restrictions that limit the formation of a PLLC to a business that provides a “professional service.”
Chapter, 621, Florida Statutes defines the term “professional service” as any personal service to the public that requires the provider to have a license or other legal authorization to render said service. Some examples of professions that fall under the “professional service” definition include, but are not limited to:
- Certified Public Accountants
- Physicians and Surgeons
- Life Insurance Agents
- Osteopathic Physicians
- Doctors of Medicine
Forming a PLLC in Florida
The process of creating a PLLC in Florida starts by obtaining a state license for each professional who will be a member of the PLLC. You will need to file articles of organization with the Florida Division of Corporations. You will need to include a statement of specific purpose, like accounting services, veterinary services, or another professional service.
Like an LLC, a PLLC must include a designation after its name. Options include “professional limited liability company,” “P.L.L.C.,” or “PLLC.” PLLCs are limited to a single professional service, and all members in the PLLC have to be licensed to provide the professional services.
Liability Protections with a PLLC
While the PLLC offers some personal liability protection, it will not insulate a manager or member from all types of liability. Some of the protections a PLLC offers include:
- Creditors looking to collect unpaid business debts that are owed solely by the PLLC;
- Liability for the malpractice of another PLLC member; or
- People who end up injured in connection with your PLLC where there is no connection with your own professional malpractice or a tort.
A member, however, can be held personally liable in some cases, which include:
- A personal guarantee to a bank regarding repayment of a business loan
- Accusation of malpractice or egregious mishandling
- Negligent or intentional commission of a tort
While operating agreements are not required in Florida, it’s a better practice to have an operating agreement for your PLLC. Member disputes are not uncommon in Florida, including in all types of limited liability companies. An operating agreement helps define the ground rules for the operation of the business and puts all members on notice of those rules.
If you need to consult a Florida Bar Board Certified Business Litigation attorney for a dispute with a PLLC member or manager, contact McCabe Rabin, P.A. at 561-659-7878 to schedule a consultation.