LLC vs. PLLC: What’s the Difference and Which Is Right for Your Business?

When choosing a business structure, many professionals and small business owners compare LLCs and PLLCs to understand which one offers the best liability protection, tax treatment, and licensing benefits. Although they may seem similar, an LLC (Limited Liability Company) and a PLLC (Professional Limited Liability Company) serve different purposes depending on the type of business and state regulations.

This guide provides a detailed breakdown of LLC vs. PLLC, including requirements, advantages, disadvantages, and how to choose the right entity for your profession.

Overview: LLC vs. PLLC

FeatureLLCPLLC
Stands ForLimited Liability CompanyProfessional Limited Liability Company
Best ForMost businesses, freelancers, contractors, small businessesLicensed professionals (doctors, lawyers, accountants, etc.)
Who Can FormAnyoneOnly state-licensed professionals
PurposeGeneral business structureProfessional practices requiring state licensing
Liability ProtectionStrongStrong, but does not protect against malpractice
Formation RequirementsSimpleMore complex; requires license verification
State AvailabilityAll statesNot available in every state

What Is an LLC?

An LLC (Limited Liability Company) is a flexible business structure that provides liability protection for its owners—called members—while offering simple management and tax benefits.

Key Features of an LLC

  • Protects personal assets from business debts

  • Offers pass-through taxation by default

  • Easy to form in all states

  • No professional licensing required

  • Suitable for nearly all types of businesses

LLCs are popular among:

  • Online businesses

  • Retail stores

  • Consultants

  • Real estate investors

  • Startups and small businesses

What Is a PLLC?

A PLLC (Professional Limited Liability Company) is a specialized form of LLC designed for state-licensed professionals who provide services that require regulatory oversight. Not all states recognize PLLCs, but those that do require additional approval steps.

Who Can Form a PLLC?

PLLCs typically apply to:

  • Doctors

  • Dentists

  • Lawyers

  • Accountants

  • Architects

  • Psychologists

  • Engineers

  • Chiropractors

  • Real estate brokers (in some states)

All owners of a PLLC must usually hold the same professional license.

Key Differences Between an LLC and a PLLC

1. Licensing Requirements

LLC:

  • No professional license required

  • Anyone or any entity can be a member

PLLC:

  • Requires proof of professional licensure

  • All members must be licensed professionals

  • Often requires approval from a state licensing board

2. Liability Protection

LLC:

Protects members’ personal assets from:

  • Business debts

  • Lawsuits

  • Contracts

  • Accidents caused by employees

PLLC:

Provides similar protection, except:

  • Does not protect individual members from malpractice claims

  • Only protects from malpractice committed by other members

This distinction is crucial:
A PLLC does not shield you from your own professional negligence.

3. Formation Requirements

LLC:

PLLC:

  • Same steps as an LLC, plus:

    • Submit professional license documentation

    • Obtain approval from a state licensing board

    • Sometimes file a Professional Certificate of Good Standing

4. Naming Rules

LLC:

Names generally must include:

  • “LLC” or “Limited Liability Company”

PLLC:

Names must include:

  • “PLLC” or “Professional Limited Liability Company”

  • Some states require including the specific profession

5. State Restrictions

LLC:

  • Allowed in all 50 states

  • No special professional rules

PLLC:

  • Not all states offer PLLCs

  • Some states require PCs (Professional Corporations) instead

  • Some states limit which professions can form PLLCs

Before forming, professionals must check state-specific requirements.

Tax Differences Between LLC and PLLC

LLC Taxation

Default taxation:

  • Pass-through entity

  • Profits flow to members’ personal tax returns

But LLCs can elect:

  • S-Corp taxation

  • C-Corp taxation

PLLC Taxation

Taxed exactly the same as LLCs:

  • Pass-through by default

  • Can elect S-Corp or C-Corp status

There is no tax difference between LLC and PLLC.
The differences lie in regulation and licensing, not taxation.

Advantages and Disadvantages: LLC vs PLLC

LLC Pros

✔ Easy to form
✔ Flexible ownership structure
✔ No licensing required
✔ Lower administrative burden
✔ Available in every state

LLC Cons

✘ Not suitable for licensed professional practices in many states

PLLC Pros

✔ Meets state requirements for licensed professionals
✔ Protects members from each other’s malpractice
✔ Allows group practices with liability separation
✔ Provides same tax flexibility as an LLC

PLLC Cons

✘ Does not protect against your own malpractice
✘ Requires license verification
✘ Not available in every state
✘ More expensive to form

Should You Choose an LLC or PLLC?

Choose an LLC if:

✔ You’re not in a state-regulated profession
✔ You run a general business (online store, consulting, real estate, etc.)
✔ You want low cost and simple setup
✔ You don’t need licensing-board approval

Choose a PLLC if:

✔ Your state requires PLLCs for licensed professions
✔ You run or plan to join a professional practice (medical, legal, accounting, etc.)
✔ All members hold the same professional license
✔ You want liability separation from other practitioners

Important: Some states require professionals to form PCs (Professional Corporations) instead. Always check state laws.

Final Verdict: LLC vs. PLLC

  • An LLC is the best choice for general businesses seeking simplicity and liability protection.

  • A PLLC is required or recommended for licensed professionals in many states and offers protection aligned with professional regulations.

The two structures are similar, but the PLLC includes extra compliance steps due to the nature of regulated professional services.

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