Professional LLC (PLLC) Operating AgreementLicensure restrictions, malpractice liability that survives the shield, and state-by-state availability
What a PLLC Protects and What It Doesn't
The most important thing to understand about a PLLC is what it does not protect: a licensed professional member remains personally liable for the member's own professional malpractice. If a physician member of a medical PLLC misdiagnoses a patient, the patient can sue both the PLLC and the physician personally. The physician's personal assets (home, savings, other investments) are at risk, just as they would be if the physician practised as a sole proprietor.
What the PLLC does protect: general business liabilities. If the PLLC's landlord sues over unpaid rent, the claim is against the PLLC only, not against members personally. If an employee sues for wrongful termination, the claim is against the PLLC. If the PLLC's equipment vendor sues over unpaid invoices, the claim is against the PLLC. Members' personal assets are protected from these general business risks just as they would be in a standard LLC.
The PLLC also protects a member from another member's professional malpractice. If Physician A in a two-member medical PLLC commits malpractice, Physician B is not personally liable. The patient can sue the PLLC (collecting from PLLC assets) and Physician A personally, but cannot reach Physician B's personal assets. This protection is the primary reason multi-member professional practices use the PLLC structure rather than partnership.
Liability Shield Coverage Map
| Type of Claim | Member Personally Liable? | Notes |
|---|---|---|
| General business contracts | Protected | PLLC shield applies as in standard LLC |
| Employee claims (wrongful termination, discrimination) | Protected | PLLC shield applies |
| Lease, equipment, and vendor obligations | Protected | PLLC shield applies |
| Member's own professional malpractice | NOT protected | Member personally liable; LLC may also be liable but not in lieu of member |
| Other member's professional malpractice | Protected | Non-acting members not personally liable; only the LLC and the acting member |
| Negligent supervision of staff | Partially protected | Member who failed to supervise may be liable; uninvolved members protected |
Because malpractice survives the shield for the acting member, professional malpractice insurance is not optional for PLLC members. Most states require members to maintain minimum coverage as a condition of licensure or PLLC operation.
Professions Typically Requiring PLLCs
| Profession | PLLC Required (most states)? | State Board Involvement |
|---|---|---|
| Physicians and surgeons (MD, DO) | Yes in most states | State medical board approval required for ownership transfers |
| Dentists (DDS, DMD) | Yes in most states | State dental board notification typically required |
| Attorneys (JD admitted to practice) | Yes in most states; California uses PC | State bar notification or approval typical |
| Certified Public Accountants (CPA) | Yes in most states | State board of accountancy registration |
| Architects | Yes in most states | State architecture board registration |
| Engineers (PE) | Yes in most states | State engineering board registration; firm certification often required |
| Psychologists | Yes in most states | State psychology board notification |
| Chiropractors | Yes in most states | State chiropractic board notification |
Sample PLLC Clauses
State Variations Worth Knowing
California prohibits PLLCs entirely. California-licensed professionals (physicians, attorneys, accountants, etc.) must use a Professional Corporation (PC) or, for some professions, a Registered Limited Liability Partnership (LLP). A non-California licensed professional forming a PLLC in another state and registering to do business in California typically faces difficulty because California does not recognise the structure for in-state services.
New York permits PLLCs (NY LLC Law § 1207). The agreement must be adopted within 90 days of formation (the standard NY rule applies). Ownership is restricted to licensed New York professionals in the same field. The NY publication requirement (NY LLC Law § 206) applies to PLLCs the same as to standard LLCs.
Texas permits PLLCs and uses the term "Professional Limited Liability Company" with the abbreviation "PLLC" or "P.L.L.C." (Tex. BOC § 304.001). Some Texas professions (medicine, dentistry) have specific additional ownership restrictions: ownership must be 100% by licensed professionals in the same field.
Most states require the state professional licensing board to approve PLLC formation, ownership transfers, or member additions. Build the licensing-board approval into the operating agreement as a condition precedent to any membership change.
Five PLLC-Specific Mistakes
It does not. Members remain personally liable for their own professional malpractice. Only general business liabilities and other members' malpractice are shielded.
Most states prohibit non-professional ownership. A non-professional minority partner can void the PLLC's licensure entirely.
Many states require licensing-board approval for ownership transfers or new-member admissions. Skipping this step can void the transfer and trigger licensure issues.
Insurance is the actual liability layer for the most likely claims. PLLC formation does not reduce the need for high-limit malpractice coverage; it makes coverage more important, not less.
California prohibits PLLCs. Use Professional Corporation (PC) or Registered Limited Liability Partnership (LLP) for California-licensed professionals.
Multi-Member Template →
General multi-member structure used inside PLLCs.
Buyout Provisions →
Mandatory buyout on license loss is a standard PLLC clause.
California LLC OA →
California prohibits PLLCs; use PC or LLP instead.
New York LLC OA →
NY permits PLLCs with the standard 90-day rule.
Interactive Builder →
Generate a PLLC outline including licensure clauses.