Texas Professional LLC (PLLC) — Formation for Licensed Professionals
If you hold a state-regulated professional license in Texas, you may be required to form a Professional Limited Liability Company (PLLC) instead of a standard LLC. Texas PLLCs are governed by both the Texas Business Organizations Code (Professional Entities) and Chapter 101 (LLCs). The formation process is similar to a standard LLC with key additional requirements. See all LLC types or our formation guide.
Who Must Form a PLLC in Texas
Under the Texas Business Organizations Code, the following professions must use a professional entity (PLLC, PC, or PA) rather than a standard LLC:
- Licensed attorneys (State Bar of Texas)
- Certified Public Accountants (Texas State Board of Public Accountancy)
- Licensed physicians and surgeons (Texas Medical Board)
- Licensed dentists (Texas State Board of Dental Examiners)
- Licensed architects (Texas Board of Architectural Examiners)
- Licensed professional engineers (Texas Board of Professional Engineers)
- Licensed veterinarians (Texas State Board of Veterinary Medical Examiners)
- Licensed psychologists (Texas State Board of Examiners of Psychologists)
- Licensed optometrists
- Other professions whose licensing board requires a professional entity
If your profession is not on this list, you can use a standard LLC. Many professionals (real estate agents, financial advisors, consultants, therapists without certain licenses) do NOT need a PLLC in Texas.
How a PLLC Differs from a Standard LLC
| Feature | Standard LLC | PLLC |
|---|---|---|
| Liability protection for business debts | Yes | Yes |
| Protection from other members' malpractice | N/A | Yes |
| Protection from YOUR OWN malpractice | Yes | No — you remain personally liable |
| Members must be licensed | No requirement | Yes — all members must hold the relevant license |
| Licensing board approval | Not needed | Required before formation |
| Formation fee | $300 | $300 (same) |
| Name requirement | Must include "LLC" | Must include "PLLC" or "Professional Limited Liability Company" |
Critical distinction: A PLLC does NOT shield you from personal malpractice liability. If you commit malpractice, you are personally liable regardless of the entity. The PLLC protects you from: (1) the malpractice of your partners/co-members, (2) general business debts and liabilities, and (3) contractual obligations of the entity.
Formation Process
Ready to get started?
Get Started- Obtain approval from your licensing board — Before filing with the SOS, most boards require you to submit the proposed Certificate of Formation for review. Contact your board for their specific process.
- File Certificate of Formation (Form 205) with the Texas Secretary of State
- Entity type: Professional Limited Liability Company
- Name must include "PLLC" or "Professional Limited Liability Company"
- Must state the professional service(s) to be rendered
- Must list all members/managers (all must be licensed in the profession)
- Filing fee: $300
- Provide proof to your licensing board — After the SOS files your certificate, submit the filed copy to your licensing board to activate your practice authority
- All other steps are the same as a standard LLC (EIN, operating agreement, bank account)
Texas-Specific PLLC Rules
Licensing requirement for all members : Every owner (member) and manager of a Texas PLLC must hold a valid license in the profession. If a member's license lapses, they must divest their ownership interest within a reasonable time or the PLLC risks non-compliance.
Scope limitation: A PLLC can only render the professional services specified in its Certificate of Formation. You cannot use a PLLC formed for accounting to also practice law.
Multi-profession firms: Under the Texas Business Organizations Code, certain professions can form joint PLLCs (e.g., a medical PLLC with both physicians and physician assistants). Check your specific licensing board for permitted combinations.
Annual compliance: Same as standard LLCs — Franchise Tax Report and PIR due May 15 with the Comptroller. Additionally, licensing boards may require annual confirmation that the PLLC remains in compliance.
FAQ
Can I form a standard LLC instead of a PLLC for my practice?
If your licensing board requires a professional entity, no. The SOS may reject a standard LLC Certificate of Formation if the stated purpose involves a regulated profession. Even if somehow filed, operating a regulated practice through a non-professional entity may violate licensing rules and expose you to disciplinary action.
What if one member loses their license?
That member must divest their ownership interest. The operating agreement should address this scenario with specific timelines and buyout provisions. If not addressed, the Texas Business Organizations Code provides that the person's membership interest must be transferred within a reasonable time.
Do PLLCs pay different taxes?
No. PLLCs are taxed identically to standard LLCs for both federal and Texas franchise tax purposes. The PLLC designation is purely a liability and licensing distinction, not a tax distinction.
Can a PLLC have non-licensed employees?
Yes. Employees (staff, administrators, office workers) do not need to be licensed. Only owners (members) and managers must hold the professional license. The restriction applies to ownership, not employment.
Is malpractice insurance still necessary with a PLLC?
Absolutely. Since the PLLC does not protect you from your own malpractice, insurance is essential. The PLLC protects against general business liability and co-member malpractice — but your own professional negligence remains your personal responsibility.