You may have heard of a PLLC, PLC, or a PC or seen them appended to the end of a company name and wondered what they are. If so, this is the article is for you. PLLC (or PLC) stands for "professional limited liability company" while PC refers to a "professional corporation." Both are separate legal entities, separate from their owners (members for a PLLC/PLC and shareholders for a PC). In Virginia, they are the form of entity required for certain heavily state regulated professions where either state law or the regulatory bodies of the specific profession require their practitioners to form as a PLLC or PC. Examples of such professions are medical doctors, lawyers, certified public accountants, professional engineers, architects, and certain other health care providers and practitioners of the healing arts.
The key difference between PLLC’s/PC’s and a normal LLC/corporation is that the PLLC and PC do not provide the owners with limited liability protection for their own acts of professional malpractice related to the services they provide. This means that if your doctor commits an act of medical malpractice while treating you, they cannot hide behind the veil of limited liability protection when you make a claim against them. This is for public policy reasons to protect the general public from harm.
So you may be asking yourself, why would a doctor, lawyer or CPA form an entity at all if they are not able to get limited liability protection like other businesses? For two reasons: (1) the prohibition on limited liability protection only applies to acts of professional malpractice. If you slip and fall in your doctor’s waiting room that is not medical malpractice – that’s just negligence and your doctor would be personally protected from that claim. And (2) for the tax benefits that operating as an entity allows (namely, the S corp. election).
The laws and rules regarding PLLC’s and PC’s are extremely state-specific so be sure to check your particular state’s laws, especially if you’re outside of Virginia. And if you would like to create a PLLC or a PC correctly, we can help (just use our LLC order form or corporation order form).Spread the Word