As a licensed professional in Georgia you can structure your business as a Georgia 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.
A Georgia PLLC is a limited liability company (LLC) formed specifically by people who will provide Georgia 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.
Note: Georgia law doesn't use the term PLLC. For this article, a PLLC simply means an LLC formed by licensed professionals providing professional services.
Georgia's LLC statute does briefly indicate that people providing professional services may form LLCs. However, the statute does not directly define professional service and there is no separate statute specifically for PLLCs. Georgia laws regulating some individual professions (for example, accountants, architects, and dentists) do indicate that members of those professions may form LLCs. For comparison purposes, be aware that other states' LLC laws often provide specific lists of professional services. These lists typically include, at a minimum, physicians, surgeons, dentists, lawyers, certified public accountants, professional engineers, architects, and veterinarians, but often include other professions, as well. If you're unsure whether members of your Georgia-licensed profession are allowed to form a Georgia PLLC, check the rules regulating your profession or consult with a local business attorney.
To form your Georgia PLLC you'll need to:
You can file the articles online by going to the SOS website. You can also file by mail. Filings by mail must include the separate Transmittal Information form (Form 231) which you can download from the SOS website. The current filing fee is $100.
A Georgia PLLC's name must contain the words "limited liability company" or "limited company" (the word "limited" can be abbreviated as "ltd." and the word "company" can be abbreviated as "co.") or the abbreviation "L.L.C.", "LLC", "L.C." or "LC". Other naming restrictions also apply. For additional important information on LLC names, check the Business Name, Location & Licenses section of the Nolo website.
Georgia's LLC Act does not mention restrictions on services or membership. (By way of comparison, Georgia's law for professional corporations, which are entities similar to PLLCs, states that professional corporations generally can only practice one profession, and that all corporation officers, employees, and agents must be licensed.) Georgia PLLCs and/or their members are subject to the regulation of the relevant state professional licensing authorities. If you have any questions about PLLC service or membership restrictions, check the rules regulating your profession and consult with a local business attorney.
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.
Forming your professional service business as a PLLC will protect you personally from:
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:
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 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:
The tax differences between PLLCs and PCs can become complicated. For example, Georgia imposes a $50 annual registration fee on LLCs. (More information on this fee 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.
Georgia allows professionals to form both PLLCs and PCs, 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.
For more information on the requirements for forming and operating an LLC in Georgia, 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.