As a licensed professional in Ohio you can structure your business as an Ohio limited liability company (LLC). 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.
Note: Ohio law doesn't use the term professional LLC (PLLC). For this article, a PLLC simply means an LLC formed by licensed professionals in Ohio that provides professional services.
Under Ohio law, a professional service is a service requiring a state license, certificate, or other legal authorization, and is provided by:
Anyone who is licensed or otherwise authorized to practice one of these professions in Ohio can form an Ohio LLC.
To form your Ohio PLLC you'll need to:
You can file your articles online or download a blank articles of organization form (Form 533A) from the SOS website. The form is the same form used by anyone who wants to create an LLC in Ohio. It includes a required authorization to be signed (or e-signed for online filings) by the new PLLC's statutory agent. The current filing fee is $99.
The name of an Ohio PLLC must include the words "limited liability company" without abbreviation or one of the following abbreviations: "LLC," "L.L.C.," "limited," "ltd.," or "ltd". In addition, the name must be distinguishable from all other previously registered business names, including all trade names and the names of all existing corporations, limited liability companies, limited partnerships, and limited liability partnerships and all business names that maintain an "active" or "hold" status. There are additional restrictions on using words like architect, accountant, and engineer in a name. Check with the state professional licensing board for any name rules or restrictions for your profession. For example, the Dental Board requires dentists to include in their business name at least the last name of the owner dentist or dentists.
Ohio law allows you to form PLLCs that provide either one professional service or specified combinations of several professional services. All members of an Ohio PLLC who provide professional services for the PLLC in Ohio must be licensed by the State of Ohio to provide those services. Ohio PLLCs and/or their members are subject to the regulation of the relevant state professional licensing authorities. Finally, always remember that Ohio PLLCs and/or their members are subject to the regulation of the relevant state professional licensing authorities.
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 all members of the PLLC, 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, PLLC members in some states 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 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:
Ohio allows professionals to form both PLLCs and professional corporations (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 Ohio, such as those relating to annual reports and taxes, see Nolo's article 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.