By David M. Steingold , Attorney
Updated by Amanda Hayes , Attorney University of North Carolina School of Law
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As a licensed professional in New York, you can structure your business as a New York professional service limited liability company. Other states refer to this entity structure as a professional limited liability company. (While New York uses a slightly different name, the Empire State still uses the abbreviation PLLC for this business structure.) Structuring your business as a PLLC will give you protection from several important types of liability. It could also provide certain tax advantages compared to other ways of structuring your business.
A New York PLLC is a limited liability company (LLC) formed specifically by people who provide professional services licensed by the state of New York. In general, an LLC is a business registered with the state that consists of one or more people (or entities)—called "LLC members"—who own the business. Like other LLCs, PLLCs protect their individual members from claims for many (but not all) types of financial debts or personal injuries.
New York PLLCs are governed by Article 12 of New York's Limited Liability Company Law: N.Y. Ltd. Liab. Co. Law §§ 1201 and following (2024).
Under New York's LLC laws, a "professional service" is defined only generally, as any type of service to the public that can be lawfully provided by a member of a profession within the purview of that profession. (N.Y. Ltd. Liab. Co. Law § 1201 (2024).)
Other states' laws often provide itemized lists of professional services. These lists typically include, at a minimum, physicians, surgeons, dentists, lawyers, certified public accountants, engineers, architects, and veterinarians, but usually include other professions, as well.
While New York's LLC law doesn't provide an itemized list of professional services, it does have provisions that indicate that all of the following—when properly licensed by the state—constitute professional services:
(N.Y. Ltd. Liab. Co. Law §§ 1203 and following (2024).)
You can find a more comprehensive list of professions and their licensing requirements in Title 8 of New York's education laws. (N.Y. Educ. Law §§ 6500 and following (2024).)
If you're unsure whether your New York licensed or authorized profession is considered a professional service for the purpose of forming a PLLC, check with a local business attorney.
PLLCs must meet several requirements under New York law.
Your PLLC's business name must follow New York's special naming laws for PLLCs. Specifically, New York requires that your PLLC's name end with:
Generally, any name that a partnership or professional service corporation can use when practicing a profession, a PLLC can also use when practicing that same profession. (N.Y. Ltd. Liab. Co. Law § 1212 (2024).)
New York's LLC laws set certain restrictions on who can own and participate in a PLLC and what services a PLLC can provide.
All PLLC members must be licensed. Only persons who are licensed through the state to perform the services the PLLC provides can be PLLC members. (N.Y. Ltd. Liab. Co. Law § 1207 (2024).)
Moreover, if a PLLC member loses their license, they must give up their employment and financial interest in the PLLC. (N.Y. Ltd. Liab. Co. Law § 1209 (2024).)
PLLC must purchase the membership interests of former members. In New York, a PLLC is required to purchase the membership interest of any PLLC member who has died or has become disqualified to practice the professional services provided under the PLLC. However, the PLLC isn't required to purchase the membership interest if the member sells or transfers their interest to another authorized professional (N.Y. Ltd. Liab. Co. Law § 1210 (2024).)
PLLC members must sell their membership interests to other authorized professionals or to the PLLC. A departing PLLC member can sell or transfer their interest in the PLLC only to another professional who's eligible to be a member of the PLLC. At least a majority of the PLLC members, not including the departing member, must approve the sale by vote or written consent. (N.Y. Ltd. Liab. Co. Law § 1211 (2024).)
Only licensed individuals can provide professional services through the PLLC. A New York PLLC can only provide professional services through licensed individuals. (N.Y. Ltd. Liab. Co. Law § 1204 (2024).)
A PLLC can provide both professional and non-professional services. There are three main rules for the kinds of services a PLLC can provide in New York. A New York PLLC can provide:
(N.Y. Ltd. Liab. Co. Law § 1206 (2024).)
Finally, remember that New York PLLCs and their members must follow the regulation of the relevant state professional licensing authorities. Your profession might have additional requirements.
Special Membership Rules for Public Accountancy (CPA) FirmsIf you have a CPA firm, not all members must be licensed accountants. However, your PLLC must show that both:
Every PLLC member without a license must either be a person who actively participates in the business (for example, provides services to clients or takes part in the firm's day-to-day activities) or a partnership or PC whose owners are all natural persons who actively participate in the business.
(N.Y. Ltd. Liab. Co. Law § 1203 (2024).)
You must follow specific steps to form a PLLC in New York.
As discussed earlier, your PLLC needs to include the phrase "professional limited liability company," "limited liability company," or an abbreviation of those phrases. In addition, your PLLC must follow the same naming requirements as a New York LLC.
Specifically, the name of your PLLC must be distinguishable from the names of other business entities already on file with the New York Department of State (DOS). (N.Y. Ltd. Liab. Co. Law § 204 (2024).)
You can see which names have already been registered with the state by searching through the DOS's business entity database.
Before registering your PLLC, you can reserve a business name for 60 days with the DOS. To reserve a name, mail an Application for Reservation of Name to the DOS. (N.Y. Ltd. Liab. Co. Law § 205 (2024).)
As of 2024, the fee to reserve a name is $20.
To form your New York PLLC, you must file Articles of Organization with the DOS. Your articles must include the following information:
(N.Y. Ltd. Liab. Co. Law §§ 203 and 1203 (2024).)
You must also attach certificates issued by an authorized licensing authority certifying that each of the proposed members and managers of the PLLC (including owners and governing individuals of any entity that's a member or manager of the PLLC) is authorized by law to practice the profession the LLC is being formed. If a business is a member or manager of the PLLC, then you must also attach a certificate issued by the authorized authority showing that the business is validly existing and authorized to do business. (N.Y. Ltd. Liab. Co. Law § 1203 (2024).)
As of 2024, the filing fee for Articles of Organization (Professional Service) for LLCs is $200.
Within 30 days of filing your articles of organization with the DOS, you must send a certified copy of the articles to the relevant licensing authority over your PLLC's profession. (N.Y. Ltd. Liab. Co. Law § 1203 (2024).)
Within 120 days of filing your PLLC's articles of organization, you must publish a copy of the articles or a notice containing the same information in the articles. You must file the notice once a week for six consecutive weeks. You must publish the notice in two newspapers in the county where your PLLC's principal office is located. The county clerk will designate the available newspapers. One newspaper must be printed daily and one newspaper must be printed weekly.
You must provide a Certificate of Publication to the DOS proving that you fulfilled this publication requirement. As of 2024, the fee to file this certificate is $50. Newspapers also charge a fee to publish notices.
(N.Y. Ltd. Liab. Co. Law § 1203 (2024).)
One of the first tasks after officially registering your PLLC with the state should be to create an operating agreement. New York requires PLLCs (and LLCs) to adopt a written operating agreement. You must adopt this agreement within 90 days of filing your articles of organization. However, the agreement doesn't need to be filed with the state. (N.Y. Ltd. Liab. Co. Law § 417 (2024).)
A PLLC's operating agreement should contain information about:
(N.Y. Ltd. Liab. Co. Law § 417 (2024).)
Because New York has specific rules about who can own an interest in PLLCs, your operating agreement should include buyout (also called "buy-sell") provisions. Alternatively, you can draft a separate buyout agreement. A buyout agreement covers what happens to a member's ownership share when that member is no longer part of the company, including who can buy their share, how much the share is worth, and what events can trigger a buyout.
Depending on your level of knowledge and expertise, you should consider having a lawyer assist you in preparing an operating agreement and buyout agreement.
In addition to filing articles of organization with the DOS, your PLLC might have other filing and financial obligations. PLLC members also have their own legal responsibilities, such as maintaining and renewing their professional licenses.
Your PLLC might be responsible for paying and filing the following taxes:
Depending on your location and service industry, you could have additional regulatory requirements to follow.
Forming your professional service business as a PLLC will protect you personally from:
Regarding protection from liability for the malpractice of fellow PLLC members, be aware that, for some professions in some states, PLLC members are required to have a minimum amount of malpractice insurance before they're eligible for such protection. Therefore, it's always a good idea to double-check your state's PLLC laws, as well as your state's rules for your particular profession, regarding minimum insurance requirements.
PLLCs give owners limited liability, meaning you'll still be liable in some instances, such as if:
Because you're not protected from your own malpractice, you should make sure you have professional liability insurance—and, if applicable, that your coverage meets any minimum insurance requirements.
Every state has different rules for what kind of business entity professionals can form. Some states require professionals to form a special entity, while other states give professionals the option. The type of professional entity available also depends on your state. Some states recognize PLLCs and professional corporations (PCs). Other states recognize only one or neither.
There are some important differences between PLLCs and PCs:
The tax differences between PLLCs and PCs can become complicated. For example, a PC can elect a special tax status (S corporation status) that effectively makes it a pass-through tax entity like a PLLC. PCs that don't elect special status can be subject to double taxation—in other words, both the PC itself and its shareholders have to pay taxes on business income.
New York allows professionals to form both PLLCs and PCs. New York calls PCs "professional service corporations." Both PLLCs and PCs provide liability protection for, respectively, their members or shareholders. Because the protection is essentially the same for both PLLCs and PCs, but PLLCs are simpler to create and operate, many professionals prefer the PLLC structure.
The DOS has helpful information about forming and running a business and business licenses. You can also check out the LLC section of our website for guidance and tips on how to form, manage, operate, and dissolve your PLLC.
Before forming a PLLC, make sure you understand the advantages and disadvantages as well as the requirements and restrictions of the business entity structure. Consider speaking with a local business attorney about your options.