What is a PLLC? This question comes up every now and then.
What is a PLLC?
We created PLLCs, or professional limited liability companies, as a slight change from regular LLCs for certain professions. For example, architects and lawyers must use PLLCs, not LLCs, to contain their businesses.
Primarily, they follow the same rules with one major difference. State licensing boards govern many of the rules of PLLCs as well as collect annual fees for them. For example, in North Carolina, lawyers must pay $50 per year to the Stat Bar. Typically, LLC owners must pay $200 per year to the Secretary of State. What a deal!
Business owners do not have a choice as to whether use a professional limited liability company opposed to a traditional LLC. When a company’s service fits into a “professional service” definition under NCGS § 55B-2(6), it must be filed as a PLLC, PA, or sole proprietor.
The following professions are covered under 55B-2(6):
- Public Accountants
- Practice of Medicine
- Nursing Practice Act
- Practicing Psychologists
- Marriage and Family Therapy Licensure
- Occupational Therapy
- Licensure Act for Speech and Language Pathologists and Audiologists
- Licensed Professional Counselors
- Engineering and Land Surveying
- Landscape Architects
- Social Worker Certification and Licensure Act
- North Carolina Soil Scientist Licensing Act
I provided a full list because I didn’t want to leave anyone out.
Licensing Board Review
If you’re subject to this requirement, your licensing board will have to approve your articles of organization. Therefore, the time it takes you to file will take a fair amount longer. Certain licensing boards are faster than others. Fortunately for me, the State Bar is very fast. Unfortunately, other boards have taken several months.
Difference Between PLLC and PA
The difference between these two entities is the same as the difference between LLCs and corporations. A PA is a professional association, which is a corporation.
Does it Cost More?
Probably. All of the licensing boards I’ve worked with charge an administrative fee on their end prior to paying the filing fee. Therefore, it’ll cost you slightly more. The larger concern is timing.
To get started, you need to draft your articles of organization. Then, you submit those articles, with whatever cover sheet they require, to your licensing board. At this point, you will also pay the fee. Once you get the approved articles back from the board, you submit to the Secretary of State’s office with the approved cover sheet.
From there, it usually takes the 3-10 days for the Secretary of State to approve your articles.
Hope this helps you understand PLLCs!