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What Is a Professional Limited Liability Partnership?

A professional limited liability partnership (PLLP) is a relatively recent type of business structure in the United States and Europe. PLLPs are more frequently used in the U.K., as many U.S. companies choose to operate as professional limited liability companies (PLLCs).

  1. Creation

    • At least two people are required to form a PLLP. The owners of a PLLP are called partners, and they must submit articles of formation to state or local government officials.

    Organization

    • Partners have varying degrees of authority over the business as specified by the individual company's regulations. Unlike corporations, PLLPs are not required to give all owners a voice in the organization; each company's management is organized individually.

    Taxation

    • The profit generated from a PLLP is divided among the partners. The PLLP itself is not subject to taxes. However, partners must pay personal income tax on the money they make from their ownership of the company.

    Liability

    • Partners of a PLLP are protected from most of the company's liability, including financial obligations. This liability varies with state and national laws. Some localities require at least one partner to be liable for the actions and operations of the PLLP.

    Requirements

    • Just like a partnership, a PLLP must always have at least two partners. Unlike their nonprofessional LLP counterparts, PLLPs do not have a maximum number of members. An LLP qualifies as "professional" only if the company provides professional services, such as legal, medical or accounting services.

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