Professional limited liability companies by licensed professionals like lawyers, doctors, architects and engineers is permitted under the Limited Liability Company Acts of most states or jurisdictions.
The features of professional limited liability companies are broadly similar to regular limited liability companies with a few conspicuous differences. The special characteristics of professional limited liability companies are as follows:-
Though members of such companies are not responsible for the debts and obligations of the entity yet they are burdened with personal liability for any malpractice or negligence in course of discharge of their professional duties even under the banner of the company.
In many states or jurisdictions membership in professional limited liability companies is restricted only to licensed professionals.
At the end of the name of such company the words ‘professional limited liability company’ or the initials ‘PLCC’ must be added.
Requirements of professional limited liability companies vary from state to state.
Some states permit the stock of shares of professional limited liability companies to be owned by present or past employees rendering professional services, the heir or successor of such a deceased employee but only for two years from the death.
Though in some states only licensed practitioners of the particular service that the company renders can own its stock or serve on its board of directors, yet in other states or jurisdictions the requirement of professional limited liability company is met, where at least half of the shareholders or directors are licensed professionals.
The State of California does not permit professional limited liability companies though it allows professional corporations.
