Where the IRS is concerned, there is little difference between a Limited Liability Company (LLC) and a Professional Limited Liability Company (PLLC). Both offer similar legal protection and both follow similar tax rules. The big exception lies in state filing requirements.

What is an Limited Liability Company (LLC)?

An LLC structure will limit potential liability exposure to business lawsuits and debts. LLC members can also elect to pay taxes either as a corporation, partnership, or sole proprietorship.

Creating the LLC

Most states require only a filed LLC Articles of Organization although many also strongly recommend an Operating Agreement outlining the rights and responsibilities of the LLC owners.

What is a Professional Limited Liability Company (PLLC)?

Certain states do not allow professionals such as doctors, lawyers, and accountants to form an LLC. Instead, they must establish a PLLC. PLLCs require more documentation than an LLC.

Creating the PLLC

Typical PLLC filing documentation includes the following: • A business name ending in PLLC; • Employer Identification Number (EIN); • Articles of Organization signed by one of the licensed professionals; • Certified copy of the professional license; • Signed Operating Agreement; • Approval from the state professional licensing body.

So what's the difference?

Aside from a particular state's filing demands, there is no tax or liability difference between an LLC and a PLLC.

Source:

Nolo.com. How LLCs are Taxed

Bankrate.com. Starting a small business? Start here with state and local resources

More Information:

Limited Liability Company FAQ

IRS Forms for Limited Liability Companies