Texas PLLC vs. LLC: Key Differences, Requirements & How to Choose the Right Structure

Choosing the right business structure is a major step when forming a company in Texas—especially if you’re a licensed professional. Many entrepreneurs compare a Texas LLC to a Texas PLLC to determine which one provides the strongest protection, meets legal requirements, and aligns with state regulations.

This guide clearly explains the differences between a Texas PLLC and LLC, who each entity is for, how they work, and which one is best for your situation.

Overview: Texas PLLC vs. LLC

FeatureTexas LLCTexas PLLC
Stands ForLimited Liability CompanyProfessional Limited Liability Company
Best ForMost Texas businessesState-licensed professionals
Who Can OwnAnyoneOnly professionals licensed in Texas
Licensing VerificationNot requiredMandatory
Personal Liability ProtectionStrongStrong, but no protection against personal malpractice
Formation ComplexitySimpleMore complex, must meet Texas professional rules
Allowable ProfessionsAny lawful businessMedical, legal, dental, accounting, therapy, architecture, etc.

What Is a Texas LLC?

A Texas LLC (Limited Liability Company) is a flexible business structure that provides liability protection and pass-through taxation. It is the most common choice for small businesses and entrepreneurs.

Key Features of a Texas LLC

  • Protects personal assets from business debts

  • Easy formation and maintenance

  • Anyone can be an owner (U.S. resident, non-resident, business entity)

  • Works for nearly all business types

  • No professional licensing oversight

Who Should Choose a Texas LLC?

  • Consultants, freelancers, and online businesses

  • Retailers and service companies

  • Real estate investors

  • Startups and small businesses

If your business does not require a Texas state professional license, a regular LLC is typically sufficient.

What Is a Texas PLLC?

A Texas PLLC (Professional Limited Liability Company) is a specialized LLC structure designed for individuals who offer state-licensed professional services.

Texas requires certain professionals to form a PLLC instead of a standard LLC.

Who Must Form a PLLC in Texas?

Professions requiring a Texas license, such as:

  • Doctors and medical professionals

  • Dentists

  • Lawyers

  • Chiropractors

  • Psychologists and counselors

  • Architects

  • Engineers

  • CPAs and accounting professionals

  • Veterinarians

  • Optometrists

  • Physical therapists

  • Real estate brokers (in some situations)

Important:
All PLLC owners must hold the same type of Texas professional license.

Why Texas PLLCs Exist

Texas law requires professional service providers to form an entity that complies with the Texas Professional Entities statutes. PLLCs ensure these businesses follow proper licensing and ethical regulations.

Key Differences Between Texas PLLCs and LLCs

Below is a detailed comparison of how Texas distinguishes between the two entities.

1. Licensing Requirements

Texas LLC:

  • No professional license required

  • Owners can be individuals, companies, or foreign entities

Texas PLLC:

  • Members must be licensed in Texas for the same profession

  • Requires approval or verification with the appropriate state licensing board

  • Cannot be owned by non-licensed individuals or companies

2. Liability Protection

Both LLCs and PLLCs provide liability protection, but with important distinctions.

Texas LLC Liability Protection

Protects personal assets from:

  • Business debts

  • Employee actions

  • Contract disputes

  • Accidents on business property

Texas PLLC Liability Protection

Protects against:

  • Business liabilities

  • Other members' malpractice

  • Non-professional claims

Does not protect against your own malpractice or negligence.
No entity in Texas can shield a professional from personal malpractice liability.

3. Formation Requirements

Texas LLC Requirements

  • File Certificate of Formation (Form 205)

  • Pay filing fee

  • Appoint a Registered Agent

  • Create an Operating Agreement (recommended, not required)

Texas PLLC Requirements

All LLC steps plus:

  • Use Certificate of Formation (Form 206)

  • Provide professional license information

  • Follow Texas Occupations Code and licensing board rules

  • All managers/members must hold the same Texas license

4. Naming Rules

Texas LLC

Must include:

  • “LLC,” “L.L.C.,” or “Limited Liability Company”

Texas PLLC

Must include:

  • “PLLC,” “P.L.L.C.,” or “Professional Limited Liability Company”

Texas prohibits PLLCs from using misleading or unlicensed professional terms.

5. Who Can Own or Manage the Company?

Texas LLC:

  • Anyone

  • Other companies

  • Non-U.S. residents

Texas PLLC:

  • Only individuals licensed in the specific profession

  • No corporate or non-licensed owners

  • Non-licensed employees are allowed, but not as owners

6. Tax Treatment

There is no tax difference between a Texas LLC and a Texas PLLC.

Both can choose:

  • Default pass-through taxation

  • S-Corp election

  • C-Corp election (rare but allowed)

Both also pay the Texas franchise tax once revenue crosses the state threshold.

Pros & Cons: Texas LLC vs. Texas PLLC

Texas LLC Pros

✔ Easy to form
✔ Open ownership
✔ Lower regulatory requirements
✔ Suitable for almost all business types
✔ Flexible tax options

Texas LLC Cons

✘ Not available to regulated professions requiring PLLCs

Texas PLLC Pros

✔ Complies with Texas licensing laws
✔ Separates liability between licensed professionals
✔ Allows licensed members to run joint practices
✔ Offers same tax flexibility as LLCs

Texas PLLC Cons

✘ More complex formation
✘ Only licensed professionals can own it
✘ Doesn’t protect against personal malpractice
✘ More regulatory oversight

Which Should You Choose: Texas PLLC or LLC?

Choose a Texas LLC if:

✔ You do not need a Texas professional license
✔ You’re starting a typical small business
✔ You want minimal paperwork and simple rules
✔ You want the ability to bring in investors or partners

Choose a Texas PLLC if:

✔ You are a Texas-licensed professional
✔ Your profession is regulated by a Texas state board
✔ All owners will hold the same type of license
✔ You are opening a professional practice (medical, legal, accounting, therapy, etc.)

In Texas, you cannot legally operate a licensed professional service under a standard LLC if your profession requires a PLLC.

Final Verdict: Texas PLLC vs. LLC

  •  Texas LLCA works for almost every business type and is easier to set up and maintain.

  • A Texas PLLC is required for Texas-licensed professionals and offers the same protections as an LLC but with additional compliance rules.

Your choice depends entirely on whether your business activities require state licensing.

Get Free Consultation with FormLLC

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