Florida, like all other states, allows for different business structures. One of the most common business structures for people to use is the limited liability corporations (LLC). Some businesses, however, are eligible for registration as a professional limited liability corporation (PLLC). In this article, we will discuss the difference between an LLC and a PLLC.
What is a LLC?
Under Florida law, a limited liability corporation (LLC) is one where a business enjoys the liability protection of a corporation. However, they also enjoying the tax treatment of a partnership. LLCs do not have a limit on the scope of work that they perform. Nor do they have limits on ownership structure.
What is a PLLC?
A professional limited liability corporation (PLLC) is a corporate structure for specific businesses that can show they have the particular licenses to offer those professional services. A PLLC provides the same tax advantages as an LLC but does not offer the same liability protections. To be an owner of a PLLC, the owner must have a qualified licensing background. Additionally, the business cannot conduct business beyond the scope of the profession. Examples of PLLCs are law firms, medical practices, financial brokerages, etc.
Do LLCs and PLLCs Share Any Commonality?
As mentioned above, LLCs and PLLCs both provide the same tax advantages to the owners. Another commonality that they share is that the owners of both structures are “members”. Those “members” must be in the Articles of Organization.
How Are LLCs and PLLCs Different From Each Other?
As mentioned above, PLLCs only apply to specific professions where each member must be duly qualified or licensed in that profession. Additionally, while LLCs may provide a wide range of liability protection for their members, a PLLC is limited on liability protection due to the nature of the service provided. In other words, individuals members of an LLC cannot face personal liability for the business’s debts. On the other hand, in a PLLC, if one member commits malpractice, then the court holds that individual member liable.
What Professions Can Qualify For a PLLC?
The type of professions that can qualify to create are PLLC are defined in Florida Statutes as any professional occupation that requires specialized schooling, specialized licensing, or any kind of legal authorization. Most professions that fall into this category are service professions such as attorneys, medical providers, insurance agents, real estate agents, architects, etc.
Not Sure if an LLC or PLLC is Right For Me
If you are debating if an LLC or PLLC is right for you, contact Dowd Law for a consultation. We will go over your professional and educational background and business plan, ten determine which structure you may legally qualify to incorporate under. We will assist in the incorporation process and ensure that you do not face liability while simultaneously taking advantage of any potential tax benefits.