New York PLLC Formation for Licensed Professionals
Physicians, dentists, attorneys, architects, engineers, accountants, veterinarians, psychologists, therapists, and other licensed professionals in New York cannot form a standard LLC. State law requires a Professional Limited Liability Company (PLLC) with NYSED approval before filing.
Call toll-free: (888) 275-2620. Available 24/7.
| LL.M. in Taxation | MBA | Over 25 Years of Practice |
The PLLC formation process differs from a standard LLC and requires approval from the New York State Education Department (NYSED) before any Department of State filing. The firm handles the full process — NYSED application, Articles of Organization, publication, operating agreement, EIN, and tax election — with the entity structured for both regulatory compliance and tax efficiency from day one.
Why a PLLC Instead of an LLC?
New York Business Corporation Law § 1503 and Limited Liability Company Law § 1207 restrict standard business entities for licensed professionals. If your profession is regulated by NYSED — which covers over 50 licensed professions — you must form either a Professional Corporation (PC) or a Professional Limited Liability Company (PLLC). You cannot use a standard LLC, a standard corporation, or a general partnership for the practice of your profession.
The PLLC structure provides limited liability protection for the business debts and obligations of the entity. It does not shield individual members from liability for their own professional malpractice. Each professional remains personally liable for their own acts, errors, and omissions in the practice of their profession. The PLLC protects you from liability for the malpractice of your partners — not your own.
The PLLC Formation Process — Six Steps
Forming a PLLC in New York requires several steps that do not apply to standard LLC formation. The firm handles each one.
NYSED Approval
Before any filing with the Department of State, the New York State Education Department (Office of the Professions) must approve the proposed entity. NYSED verifies that every proposed member holds a valid, current professional license in New York. Out-of-state-licensed members must provide a certificate of good standing from their licensing jurisdiction. NYSED reviews the entity name, the profession to be practiced, and the license status of each member. Approval typically takes several weeks.
Articles of Organization
Once NYSED approval is in hand, the firm files the Articles of Organization with the New York Department of State, attaching the NYSED consent letter. The entity name must include “Professional Limited Liability Company” or the abbreviation “PLLC,” must be distinguishable from other registered entities, and must not be misleading to the public regarding the profession practiced.
Publication Requirement
A newly formed PLLC must publish a notice of formation in two newspapers (one daily, one weekly) designated by the County Clerk in the county where the PLLC’s principal office is located, for six consecutive weeks. Affidavits of publication and a Certificate of Publication must be filed with the Department of State within 120 days of formation.
⚠ Publication costs vary dramatically by county.
Plan for approximately $200 in many upstate counties versus $1,900 or more in Manhattan (New York County). Choosing a principal office in a low-cost publication county can produce significant savings if the practice’s actual operations and licensing permit it.
Operating Agreement
New York requires the PLLC to adopt a written Operating Agreement. A PLLC operating agreement covers all the standard provisions of an LLC operating agreement — ownership, management, distributions, transfer restrictions, withdrawal, death and disability, dispute resolution, and dissolution — plus provisions specific to professional practice: the requirement that only licensed professionals may be members, what happens if a member’s license is suspended or revoked, and any profession-specific restrictions imposed by the licensing authority.
EIN Registration
The firm obtains the federal Employer Identification Number (EIN) from the IRS. The PLLC needs the EIN before it can open a business bank account, hire employees, or file tax returns.
Tax Election
A PLLC is a pass-through entity by default. A single-member PLLC is a disregarded entity. A multi-member PLLC is taxed as a partnership. The PLLC can also elect S-Corp taxation, which for many professional practices producing significant income generates meaningful self-employment tax savings. The firm analyzes your income projections and recommends the appropriate classification.
Ready to form your PLLC?
Call toll-free: (888) 275-2620 — available 24/7.
Professions That Require a PLLC
NYSED regulates over 50 licensed professions. The most common professions forming PLLCs include physicians and surgeons, dentists and oral surgeons, attorneys, certified public accountants, architects, professional engineers, veterinarians, psychologists, licensed clinical social workers, physical therapists, occupational therapists, optometrists, pharmacists, registered nurses and nurse practitioners, podiatrists, and chiropractors. If your profession requires NYSED licensure, you must use the PLLC (or PC) structure. If you are unsure whether your profession qualifies, contact the firm to confirm.
PLLC vs. Professional Corporation (PC)
Licensed professionals in New York can choose between a PLLC and a PC. Both require NYSED approval and restrict membership to licensed professionals. The differences are structural and tax-related.
| Feature | PLLC | Professional Corporation (PC) |
|---|---|---|
| Management | Member-managed or manager-managed; flexible | Board of directors and officers required |
| Formalities | No bylaws, board, or annual meeting requirements | Bylaws, annual meetings, minutes required |
| Profit allocation | Customizable in operating agreement | Generally must follow share ownership |
| Default taxation | Pass-through (disregarded entity or partnership); S-Corp or C-Corp election available | C-Corp (double taxation) unless S-Corp election made |
| Best for | Solo practitioners and small professional groups; tax-efficient and flexible | Larger multi-professional groups; situations requiring corporate entity for credentialing or contracts |
For most solo practitioners and small professional groups, the PLLC is the more flexible and tax-efficient structure. The firm evaluates your specific situation and recommends the right entity. For non-professional businesses considering corporate structures, see our corporation formation page and our business formation hub.
Professional Liability Insurance
A PLLC provides limited liability protection for business obligations but does not protect individual members from their own professional malpractice claims. Professional liability (malpractice) insurance is essential for every PLLC member. Some professions require malpractice coverage by law or as a condition of licensure. Even where not legally required, carrying adequate coverage is a baseline risk management measure.
Multi-Professional PLLCs
New York permits certain related professions to practice together in a single PLLC. Physicians and physician assistants, for example, can form a PLLC together. Unrelated professions generally cannot — a dentist and an accountant cannot be members of the same PLLC. The rules vary by profession, and NYSED evaluates each application. The firm advises on whether your proposed PLLC membership structure is permissible before submitting the NYSED application.
Ongoing PLLC Compliance Obligations
After formation, a PLLC has continuing obligations:
- Every member must maintain a current, valid New York professional license
- If a member’s license is suspended, revoked, or lapses, the membership must be addressed (typically through buyout or withdrawal as specified in the operating agreement)
- Biennial Statement filing with the Department of State (every two years)
- Annual filing fee (Form IT-204-LL for multi-member PLLCs)
- Profession-specific regulatory obligations imposed by the licensing authority
- If S-Corp election was made: ongoing payroll, reasonable compensation analysis, and corporate return filing
- Compliance with the federal Corporate Transparency Act (CTA) beneficial ownership reporting, where applicable — see our FinCEN BOI compliance page
- Compliance with the New York LLC Transparency Act (LLCTA), which extends similar reporting to PLLCs — see our NY LLCTA compliance page
Frequently Asked Questions
Can a non-licensed person be a member of a PLLC?
No. Every member of a PLLC must hold a current, valid New York license in the profession the PLLC practices. A spouse, family member, or business partner who is not licensed cannot hold an ownership interest. Non-licensed individuals can be employees of the PLLC but not members.
Can I convert my existing sole proprietorship into a PLLC?
Yes. The firm handles the transition, including the NYSED application, formation filings, transfer of practice assets to the new entity, contracts and lease assignments, payer and credentialing updates, and tax-classification planning. The conversion is most often done at the start of a calendar year for cleaner tax accounting.
Do I need malpractice insurance if my PLLC has limited liability protection?
Yes. The PLLC’s limited liability shield does not protect you from your own professional malpractice. Every member remains personally liable for their own clinical or professional acts. Malpractice insurance is essential and, for many professions, required by the licensing authority or by hospital and payer contracts.
How long does PLLC formation take?
NYSED approval typically takes several weeks. Department of State filing is much faster (often days, with expedited options available for an additional fee). The publication requirement runs six consecutive weeks. Total elapsed time from start to fully compliant formation is usually two to three months. The PLLC can begin operating after the Articles of Organization are filed; publication can be completed in parallel.
Can my PLLC have just one member?
Yes. A single-member PLLC is permitted in New York. By default, a single-member PLLC is treated as a disregarded entity for federal tax purposes (income reported on the owner’s Schedule C or a similar form). The single-member PLLC can elect S-Corp taxation if it produces a better tax result.
What happens if a member’s license is suspended or revoked?
The unlicensed individual can no longer be a PLLC member. The operating agreement should address this scenario in advance — typically through a mandatory buyout at a defined valuation, with payment terms designed to protect the remaining members and the practice’s cash flow. A well-drafted operating agreement avoids a forced sale or dissolution under unfavorable conditions.
Does the federal Corporate Transparency Act apply to my PLLC?
Reporting requirements under the federal CTA and the New York LLC Transparency Act (LLCTA) have changed several times since enactment. Whether your PLLC must file beneficial ownership information depends on the current state of these rules and any applicable exemptions. The firm tracks the requirements and advises on filing.
How We Help
The firm handles the full PLLC formation process from start to finish — NYSED application, Articles of Organization, publication, operating agreement, EIN, and tax election. For existing PLLCs, the firm reviews and updates operating agreements, advises on tax-classification changes, handles membership transitions when professionals join or leave, and ensures ongoing regulatory and CTA/LLCTA compliance.
Related pages: LLC formation · Corporation formation · Business formation hub · Healthcare law · Healthcare law for medical professionals
Contact Us
Call toll-free: (888) 275-2620. Available 24/7.
The firm forms PLLCs for licensed professionals in all 62 New York counties.
Our law firm has over 3,000 client testimonials across Google, BBB, Trustpilot, and other platforms. View verified client reviews.
Last reviewed by Attorney Ronald S. Cook — May 2026
This page is for informational purposes only and does not constitute legal advice.
