What are LLCs and PLLCs?

Limited Liability Companies (LLCs) and Professional Limited Liability Companies (PLLCs) are both types of business structures that provide personal asset protection for their owners, but there are some key differences between the two.

LLCs are a popular choice for small businesses because they offer personal asset protection while also allowing for flexible management structures and pass-through taxation. This means that the business itself is not taxed on its income, but instead, the profits and losses are passed through to the individual owners, who report it on their personal tax returns. LLCs can be owned by a single individual or by multiple individuals and can be managed by its owners (members) or by appointed managers.

PLLCs, on the other hand, are a specific type of LLC designed for professional services businesses such as doctors, lawyers, and accountants. Like LLCs, PLLCs offer personal asset protection and pass-through taxation. However, PLLCs have additional requirements and regulations to meet in order to be formed and operate. For example, PLLCs must be owned and managed by licensed professionals in the same field, and they are often subject to additional state-specific regulations.

In summary, LLCs and PLLCs both provide personal asset protection and pass-through taxation for their owners, but PLLCs are specifically designed for professional service businesses and have additional requirements and regulations to meet. As always, it is important to consult with a business attorney to determine which business structure is best for your specific situation.