New York PLLC (Professional LLC): A Complete Guide

A PLLC (professional limited liability company) is a type of new entity formed to practice a licensed profession. Regular limited liability companies (LLCs) and corporations can’t do this in New York. Creating a New York PLLC is an excellent choice for your practice. It has the best parts of an LLC, but with fewer restrictions than the other typical choice, which is to form a professional corporation (PC).

Starting a PLLC is a complex process. It can take several months, even if you make no mistakes. We’ve set up hundreds of PLLCs for New York professionals, and prepared this guide, hoping it will be helpful to you. However, if you’d prefer to put the entire process in the hands of an experienced lawyer, look at our start-to-finish fixed-fee New York PLLC formation service.

What’s a New York PLLC (Professional LLC)?

A New York professional service limited liability company (PLLC) is a type of LLC. A regular LLC and a PLLC are both registered under the New York Limited Liability Company Law. Both protect your personal assets if your company runs into problems. But, they’re different in what kind of activity they can engage in, who may own and run them, and their formation requirements.

Do you need a PLLC for your New York professional business?

New York law has a strict prohibition on the “corporate practice of professions.” This means is that you can’t practice a profession licensed by the New York State Education Department (NYSED) through a regular LLC or corporation. If someone told you otherwise, please do not believe them.

Professions licensed by NYSED include:

• Acupuncturists
• Architects
• Chiropractors
• Dentists
• Doctors
• Engineers
• Interior designers
• Mental health counselors
• Nurses (including NP, LPN and RN)
• Nutritionists
• Social workers
• Therapists (including PT, OT, CAT, MFT, SLP and massage)
• Veterinarians

The only registered business entities that can provide professional services in the State of New York are the PLLC, PC and registered limited liability partnership (LLP). Practicing a profession licensed by NYSED through any other business entity in New York is a criminal class E felony. Class E felonies carry jail sentences of 1-5 years.

If your type of business includes providing professional services, you’ll want to consider forming a PLLC. By creating PLLC, you’ll have the peace of mind that you’re starting your new business on a strong footing.

Benefits of New York PLLCs

Many professionals prefer the PLLC structure for their New York based practices. It combines the company level liability protections of corporations and LLPs with the flexibility of the LLC. This is particularly true for solo practitioners who would otherwise be unable to access LLP type protections.

Full liability shield

Charging order protection

Flexible scope of activities, including professional services

Flexible tax structure for maximum tax advantages

Can be a solo practice

Ready to set-up a PLLC for your New York business?

Free initial consultation with our NYC PLLC business lawyer

Downfalls of New York PLLCs

Many states are bureaucratic about the practice of licensed professions within their borders. New York is no different. These bureaucracies create certain disadvantages for New York PLLCs.

Ownership and management professional license restrictions

Long time and more requirements for forming

Less widely recognized nationally

Comparison of NY PLLC with other NY registered business entities

We usually recommend that professionals set up PLLCs for their practices. But sometimes, a different type of company might be a better choice. Below is a comparison of the New York PLLC against the PC, LLP, LLC and business corporation.

New York professional corporation (PC) vs PLLC

• Liability shield: Equal. Both provide the same full liability shield.
• Charging order protection: PLLC wins. New York PCs do not provide charging order protection. New York PLLCs do.
• Permitted activities: PLLC wins. New York PCs can only conduct professional practice. New York PLLCs can conduct professional practice and also do everything a regular LLC can.
• Taxation: PLLC wins. PCs are taxed as subchapter “C” corporations, unless they choose to be “S” corporations. Besides these, PLLCs can also choose to be taxed as sole proprietorships or partnerships.
• Solo practice: Equal. Both can be owned and managed by a single person.
• Ownership & management: Equal. Both must be owned and managed by licensed professionals.
• Formation time: Equal. Both take the same time for NYSED formation approval.
• National recognition: PC wins. PCs are more widely recognized than PLLCs in the United States.

New York registered limited liability partnership (LLP) vs PLLC

• Liability shield: Equal. Both provide the same full liability shield.
• Charging order protection: Equal. Both provide charging order protection.
• Permitted activities: Equal. Both can conduct professional practice and engage in other business activity.
• Taxation: PLLC wins. LLPs are taxed as partnerships. Besides this, PLLCs can be taxed as sole proprietorships, or choose to be taxed as subchapter “S” or “C” corporations.
• Solo practice: PLLC wins. LLPs must have a minimum of two owners. PLLCs can have one.
• Ownership & management: Equal. Both must be owned and managed by licensed professionals.
• Formation time: LLP wins. New York LLPs do not need approval from NYSED to form. New York PLLCs do.
• National recognition: LLP wins. LLPs are more widely recognized than PLLCs in the United States.

New York LLC vs PLLC

• Liability shield: Equal. Both provide the same full liability shield.
• Charging order protection: Equal. Both provide charging order protection.
• Permitted activities: PLLC wins. New York PLLCs can practice licensed professions. New York LLCs cannot.
• Taxation: Equal. Both are taxed as sole proprietorships or partnerships. But both can also choose subchapter “S” or “C” corporation taxation.
• Solo practice: PLLC wins. An LLC cannot practice a profession in New York. A New York PLLCs can.
• Ownership & management: LLC wins. New York PLLCs must be owned and managed only by licensed professionals. LLCs don’t have ownership or management restrictions.
• Formation time: LLC wins. New York LLCs do not need approval from NYSED to form. New York PLLCs do.
• National recognition: LLC wins. LLCs are more widely recognized than PLLCs in the United States.

New York Business Corporation vs PLLC

• Liability shield: Equal. Both provide the same full liability shield.
• Charging order protection: PLLC wins. New York business corporations do not provide charging order protection. New York PLLCs do.
• Permitted activities: PLLC wins. New York PLLCs can practice licensed professions. New York business corporations cannot.
• Taxation: PLLC wins. Corporations are taxed as subchapter “C” corporations, unless they choose to be “S” corporations. Besides these, PLLCs can also choose to be taxed as sole proprietorships or partnerships.
• Solo practice: PLLC wins. A New York business corporation cannot practice a profession. A New York PLLCs can.
• Ownership & management: Business corporation wins. New York PLLCs must be owned and managed only by licensed professionals. Business corporations don’t have ownership or management restrictions.
• Formation time: Business corporation wins. New York business corporations do not need approval from NYSED to form. New York PLLCs do.
• National recognition: Business corporation wins. Business corporations are more widely recognized than PLLCs in the United States.

How to form a PLLC in New York: A step-by-step guide

Starting a PLLC in New York is a long and arduous process. Mistakes can lead to significant delays. Also, many of the internal rules NYSED uses to review PLLC applications are unpublished. Our law firm has formed hundreds of PLLCs for clients, and we hope this guide will help you benefit from our experience. However, if you’d like us to handle the process from start to finish, look at our flat-fee package for forming a PLLC in New York.

Choose a name

• Licensed mental health counselors cannot use “LMHC,” but licensed clinical social workers can use “LCSW.”
• Cannot use made-up words.
• Use of “and,” “&” and “/” are restricted.
• Use of plural words is restricted.
• Use of “MD” requires actual MD degree (not equivalent).
• Cannot use “hospital,” “clinic” or “center” unless a veterinary practice.
• Cannot use words NYSED considers undignified or inappropriate.
• Cannot use “advanced,” “best,” “exceptional,” “expert,” “outstanding,” “premier,” “special,” “super,” or “ultimate.”

Draft New York PLLC articles of organization

Prepare and execute professional practice entity (PPE) Affidavit

Prepare and submit the New York PLLC formation application to NYSED

• Articles of organization
• PPE affidavit
• Cover letter requesting consent to form a PLLC, stating license information for all owners and managers, and explaining the PLLC name
• Contact information sheet,
• Check for $10/owner

Send the application to

NY State Education Department
Office of the Professions
Division of Professional Licensing Services
Professional Corporations Unit
89 Washington Avenue
lbany, NY 12234-1000

In a few months, if NYSED approves, you’ll receive a “Form PLS709” certificate of authority, which is the consent to forming a PLLC. If NYSED rejects, you might be back to square one, depending on the situation.

Hire registered agent (optional)

Submit articles of organization to NYDOS

• NYSED approved articles of organization
• PLS-709 issued by NYSED
• $200 filing fee
• $10 certification fee
• $25 expedite fee (recommended)
• Cover letter requesting 24-hour expedited handling and certification of filed documents

Send the package to

Attention: Expedited Handling
New York Department of State
Division of Corporations
One Commerce Plaza
99 Washington Avenue
Albany, NY 12231-0001

Once processed, NYDOS will send you a certified copy and filing receipt for the articles.

Get Federal Employer Identification Number (EIN)

Create an operating agreement for PLLC

Complete organization of PLLC

• Operating agreement
• Statement of the organizer
• Initial resolutions of members (owners)
• Initial resolutions of managers
• Membership (ownership) notices or certificates
• Membership ledger

These steps formally record the official acts of the PLLC, who owns how much of it, and who runs it.

File certified articles of organization with NYSED

Publish legal notices of PLLC formation

File PLLC certificate of publication with NYDOS

• Certificate of publication
• Affidavits of publication from two newspapers
• $50 filing fee
• $25 expedite fee (recommended)
• Cover letter requesting expedited filing of the certificate of publication

Once processed, NYDOS will mail you a filing receipt for the certificate. This serves as proof that your PLLC completed the New York publication process.

Ready to start a PLLC for your New York practice?

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NY PLLC checklist: Formation essentials

• Draft NY PLLC articles of organization
• Draft and notarize professional practice entity (PPE) affidavit
• Draft NY PLLC formation application cover letter, including license information and explanation of PLLC name
• Send articles, affidavit, cover letter and $10/owner to NYSED office of professions, to get a certificate of authority
• Send the certificate of authority and approved NYSED approved articles NYDOS, with a cover letter requesting certification and expedited processing, and $235
• Get certified articles and filing receipt from NYSED
• Get Employer identification number (EIN)
• Create an operating agreement
• Draft, execute and certify organizational documents, including operating agreement, statement of the organizer, initial resolutions of members, initial resolutions of managers, membership notice and membership ledger
• File certified NY PLLC articles of organization with NYSED
• Draft legal notice of publication
• Contact county clerk of PLLC’s office county, as stated in articles, to get designated newspapers in the county for legal notices
• Hire designated newspapers to publish legal notices
• Get affidavits of publication from newspapers
• Draft NY PLLC certificate of publication
• Send affidavits and certificate to NYDOS, with a cover letter requesting expedited processing, and $75.

Ongoing requirements for New York PLLCs

After you’ve successfully set up your PLLC, you’ll have to keep up to date with certain things to keep it in good standing. Otherwise, New York may shut down your PLLC.

Biennial statements

Tax obligations

Forming a New York professional limited liability company (PLLC): Final thoughts

Forming a New York PLLC for your practice is an excellent choice for your practice. Compared to other options, the PLLC provides the widest amount of protection for your assets and ownership; and is the most flexible in terms of activities and taxation.

On the other hand, setting up a PLLC is a long and difficult process, even when done with no mistakes. We’ve helped hundreds of New York professionals establish their practices, and would be happy to assist with forming your PLLC.

New York PLLC: Frequently Asked Questions (FAQ)

What does forming a PLLC in New York cost?

Do you need a lawyer to form a PLLC in New York?

Can you convert an LLC into a New York PLLC?

Can you start a New York practice without a PLLC?

Can you form a New York PLLC with someone from a different profession?

• Certified behavior analyst assistant
• Creative arts therapist
• Dentist
• Licensed behavior analyst
• Licensed clinical social worker
• Marriage and family therapist
• Doctor
• Mental health counselor
• Psychoanalyst

Want to form a New York PLLC?

Free initial consultation with our PLLC formation lawyer in NYC

This blog post is provided for general informational purposes only. It is not legal advice, and should not be a substitute for legal advice. If you have questions or comments about the post, or would like to learn more about something in the post, please feel free to contact me.