New York State’s laws allow licensed professionals to form limited liability companies. As noted on NYSED.gov, individuals providing services that require a license issued by the Empire State’s governing board may operate through professional limited liability companies.
More than 30 different types of licensed professions qualify to operate under a PLLC. Architects, engineers, dentists and medical practitioners are eligible to apply. Therapists, social workers and veterinarians may also form PLLCs.
The basics of forming a PLLC in New York
Before applying for a PLLC, applicants must contact the Office of the Professions and receive a Certificate of Authority. The three-part application for a COA includes an affidavit and the Articles of Organization 1203. Applicants must also include a third form referred to as a “Professional Practice Entity,” which provides your contact information.
After obtaining a Certificate of Authority, you may send it with a Certificate of Incorporation to the Department of State. Applications must include the professional service you intend to provide and your firm’s name. You may add partners as members who could help you manage the company. If you operate as a solo practitioner, however, the state may reject your application if your firm’s name includes words describing a plural operation such as “associates” or “group.”
The benefits of operating as a PLLC
When establishing a new practice, you may form a PLLC as protection against personal liability from lawsuits. While PLLCs generally may not offer protection from malpractice, they may reduce the risk of losing business assets to creditors, as noted by Nerd Wallet. You may also take advantage of a pass-through tax structure recognized by the IRS.
Licensed practitioners in New York who wish to form a PLLC should prepare to submit a range of details. Once formed, an ironclad operating agreement may protect the PLLC and its members from lawsuits and personal liability.