LLC Domestic Vs. LLC Professional
A limited liability company (LLC) is a business structure allowing owners to have limited personal liability for the company’s debts and actions without the complexities of forming a corporation. It can take the form of a domestic or professional LLC.
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Domestic LLC
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Limited liability companies are subject to state and federal laws. A domestic LLC consists of one or more members who are the company's owners and is formed in the state where it will conduct business. In contrast to the professional LLC, it cannot provide professional services unless authorized by law.
Domestic LLC Formation
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LLC filing forms and fees can be found on the Internet. To form a domestic LLC, you must file a certificate of organization, signed by the appointed organizer, with your state's corporation commission and include a filing fee. A state commissions directory can be found on the Internet (see Resources).
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Professional LLC
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Check your state's provisions for professions that qualify for professional LLC. The professional LLC provides professional services that require a state license to practice, such as doctors, lawyers, accountants, architects and dentists, to name a few.
Professional LLC Formation
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Legal professionals can help form a limited liability company. Forming a professional LLC is similar to a forming a domestic LLC, except the professional must obtain state licensing approval for the profession. The licensed professional, as organizer, must sign the certificate of organization.
LLC Benefits
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Seek professional guidance for choosing the best tax classification. IRS guidelines allow pass-through taxation for an LLC. It can be classified as a corporation, partnership or sole proprietorship depending on the business structure. Members can benefit from having limited liability to the extent of their ownership investment. Management has flexible options, and the membership qualifications are broad-based.
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References
Resources
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