What Is the Difference Between LLC & Pllc?
The IRS sees little difference between a Limited Liability Company (LLC) and a Professional Limited Liability Company (PLLC). Both offer similar legal protection and both follow similar tax rules. The difference lies in state filing requirements.
Other People Are Reading
-
What is an Limited Liability Company (LLC)?
-
An LLC limits potential liability exposure to business lawsuits and debts. Members can also elect to pay taxes either as a corporation, partnership or sole proprietorship.
How is an LLC created?
-
Most states only require a filed LLC Articles of Organization although many will also recommend an Operating Agreement to outline the rights and responsibilities of the LLC owners.
-
What is a Professional Limited Liability Company (PLLC)?
-
Certain states do not allow doctors, lawyers, architects or accountants to form LLCs. Instead, these businesses must form a PLLC, a designation requiring additional filing documentation.
How is a PLLC created?
-
Establishing a PLLC typically involves the following documents: A business name ending in PLLC; Employer Identification Number (EIN); Articles of Organization signed by one of the licensed professionals; Certified copy of the professional license; Signed Operating Agreement; Approval from the state professional licensing body.
What is the difference?
-
State documentation demands are the sole difference between an LLC and a PLLC, as overall liability protection and IRS tax advantages remain the same.
-
