How to Form a PLLC in Connecticut

Here are the basic rules for forming professional limited liability companies (PLLC) in Connecticut.

By , Contributing Author

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As a licensed professional in Connecticut you can structure your business as a Connecticut professional limited liability company (PLLC). This will give you protection from several important types of liability. It also may provide certain tax advantages compared to other ways of structuring your business.

What is a Connecticut PLLC?

A Connecticut PLLC is a limited liability company (LLC) formed specifically by people who will provide Connecticut licensed professional services. LLCs in general are businesses registered with the state that consist of one or more people—called LLC members—who own the business. Like other LLCs, PLLCs protect their individual members from people with claims for many (but not all) types of financial debts or personal injuries.

What is a Professional Service in Connecticut?

Under Connecticut's LLC Act, a professional service is a service provided by:

  • dentists
  • natureopaths
  • chiropractors
  • physicians and surgeons
  • doctors of dentistry
  • physical therapists
  • occupational therapists
  • podiatrists
  • optometrists
  • nurses
  • nurse-midwives
  • veterinarians
  • pharmacists
  • architects
  • professional engineers
  • jointly by architects and professional engineers
  • landscape architects
  • real estate brokers
  • insurance producers
  • certified public accountants and public accountants
  • land surveyors
  • psychologists
  • attorneys-at-law
  • licensed marital and family therapists
  • licensed professional counselors
  • licensed or certified alcohol and drug counselors, and
  • licensed clinical social workers.

Anyone who is licensed to practice one of these professions in Connecticut can form a Connecticut PLLC.

How Do I Form a Connecticut PLLC?

To form your Connecticut PLLC you'll need to:

  • have the state license for each professional who will be a member of the company
  • check with the relevant state licensing board for your profession to see if its approval is required (and, if so, obtain the necessary documentation showing that approval), and
  • with the Connecticut Secretary of the State (SOTS).

You can download a blank articles of organization form (Form LC-1-1.0) from the SOTS website or you can file your articles online. The articles form is for LLCs generally rather than just for PLLCs. The current filing fee is $120.

Naming Restrictions

The name of any Connecticut LLC, including a PLLC, must contain the words "Limited Liability Company" or the abbreviations "L.L.C." or "LLC". The word "Limited" may be abbreviated as "Ltd." and the word "Company" may be abbreviated as "Co." For additional important information on LLC names, check the Business Name, Location & Licenses section of the Nolo website.

Service and Membership Restrictions

A Connecticut PLLC generally can only provide one kind of professional services along with directly related (ancillary) services. However, PLLCs providing any of the following combinations of professional services are allowed:

  • psychology, marital and family therapy, social work, nursing and/or psychiatry
  • medicine and surgery, occupational therapy, social work and alcohol and/or drug counseling; and
  • medicine and surgery and chiropractic.

Generally speaking, all members of a Connecticut PLLC must be licensed to provide the professional service (or services) offered by the PLLC, and the services must be provided only by the PLLC's licensed members, managers, employees, or agents. Connecticut PLLCs and/or their members are subject to the regulation of the relevant state professional licensing authorities.

Operating Agreement

You should make sure you have an operating agreement for your PLLC. Unlike professional licenses, articles of organization, naming restrictions, and service restrictions, this is not a state requirement. However, it is important to have an operating agreement so that other members of the PLLC (if any), as well as outside companies and businesses (for example banks), know what the internal rules are for the company. Depending on your own level of knowledge and expertise, you should consider having a lawyer assist you in preparing this document.

A PLLC Will Not Protect You From All Liability

Forming your professional service business as a PLLC will protect you personally from:

  • creditors seeking to collect unpaid debts owed solely by the PLLC
  • liability for the malpractice of other PLLC members, and
  • people who are personally injured in connection with your PLLC because of things having nothing to do with your own professional malpractice or torts (for example, if someone slips and falls in your PLLC's offices).

Regarding protection from liability for the malpractice of fellow PLLC members, be aware that, for some professions in some states, PLLC members are required to have a minimum amount of malpractice insurance before they are eligible for such protection. Therefore, it's always a good idea to double check your state's PLLC laws, as well as your state's rules for your particular profession, regarding minimum insurance requirements.

Meanwhile, you are personally responsible if:

  • you personally guarantee repayment of a business loan
  • you engage in professional malpractice (such as completely botching a patient's treatment or egregiously mishandling a client's case), or
  • you intentionally or negligently commit a tort (such as assaulting someone).

Because you are not protected from your own malpractice, you should make sure you have professional liability insurance—and, if applicable, that your coverage meets any minimum insurance requirements.

A PLLC is Different From a Professional Corporation

A PLLC is not the same thing as a professional corporation (PC). A PLLC is a newer type of business entity than a PC. Here are some of the key differences:

  • a PLLC, like other LLCs, is comprised of members, but a PC, like other corporations, is comprised of shareholders
  • following from the previous point, PLLC ownership consists of so-called membership interests in the business, but PC ownership is based on shares of stock; and
  • a PLLC, like other LLCs, is a so-called pass-through tax entity, meaning that in most states only the individual members have income tax obligations, while a PC, like other corporations, usually has its own income tax obligations.

The tax differences between PLLCs and PCs can become complicated. Connecticut imposes a separate biennial Business Entity Tax (BET) on PLLCs. (More information on this tax is available in other Nolo LLC articles.) Moreover, a PC can elect a special tax status (S corporation status) that effectively makes it a pass-through tax entity like a PLLC. And, meanwhile, PCs that don't elect special status may be subject to double taxation—in other words, both the PC itself and its shareholders may have to pay taxes on business income.

Connecticut allows professionals to form both PLLCs and PCs (state law technically refers to the latter as professional service corporations), and both PLLCs and PCs provide liability protection for, respectively, their members or shareholders. Because the protection is essentially the same for both PLLCs and PCs, but PLLCs are simpler to create and operate, many professionals prefer the PLLC structure.

Additional Information

For more information on the requirements for forming and operating an LLC in Connecticut, such as those relating to annual reports and taxes, see Nolo's articles in 50-State Guide to Forming an LLC and 50-State Guide to Annual Report and Tax Filing Requirements for LLCs, along with the other articles on LLCs in the LLC section of the Nolo website.

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