The type of business organization that an entrepreneur forms will impact everything from tax obligations to growth opportunities in the future. Different business models require different structures, and choosing the right entity is a critical aspect of the business startup process.
Those who are hoping to develop a successful company or professional practice might consider forming a limited liability company (LLC). On the other hand, they may also consider forming a professional limited liability company (PLLC).
What differentiates an LLC from a PLLC in Pennsylvania?
A PLLC Is A Type Of LLC With Special Factors
Those hoping to form an LLC to establish a professional practice while limiting their personal liability may need to form a PLLC. The process will be very similar to the process of starting an LLC.
One of the main differentiators between the two will be the language used in the Certificate of Organization. The paperwork for the business will also need to include a description of the professional services the organization will provide. Typically, only those who have a professional license and intend to use the business to practice can form a PLLC.
Commonly, only those in highly-regulated professions start PLLCs instead of LLCs to practice their profession. The industries that might require the use of a PLLC include:
- law
- medicine
- veterinary medicine
- accounting
- dentistry
- optometry
- orthopedic care
- chiropractic care
- psychology
Professionals hoping to pursue success in one of those fields might choose to start a PLLC instead of a basic LLC for better control over the business and personal protection.
Mistakes During Formation May Limit Benefits
Whether an entrepreneur chooses to create a PLLC or an LLC, seemingly small mistakes during the process could prevent them from reaping optimal benefits for their work and investment. From maintaining separate financial accounts to properly completing state forms, there are many important steps that professionals will need to take while starting a practice to develop their careers.
Learning more about different business entities can help those who are hoping to start a company pursue the right solution for their needs with the assistance of an experienced legal professional.