In this week’s Freedom Friday blog and email newsletter, we’re starting a new series in the new year, and it’s called “Top Six in 2026” — we will be talking about the six most popular topics from last year’s Freedom Friday blog and email newsletter. These are the topics that I get countless inquiries about from prospective clients, and which drive business each and every year. We’re starting out with a very popular topic. Each year I get calls and emails, even from other attorneys, some of whom have become clients, asking whether they should form a PLLC or an LLC. This made the Top 5 list last year, and the year before, as well, and it’s made the Top 6 list this year. So, in this week’s Freedom Friday blog and email newsletter, I’m answering the question, “What is the difference between a PLLC and an LLC?”
PLLC stands for “professional limited liability company,” and if you’re a professional, e.g., attorneys, accountants, architects, doctors, etc., forming a PLLC is not necessarily a requirement, but in some situations, there are advantages to forming a PLLC rather than a regular LLC. There are also differences between PLLCs and LLCs. Here are three (3) key differences between a PLLC and an LLC:
1. Who Can Form a PLLC?
The first key difference between an LLC and a PLLC is who can form a PLLC. A professional limited liability company (PLLC) can only be formed by licensed professionals in the State of Oklahoma. While it’s not required to form a PLLC, all the “members” (owners) of the PLLC must be of the same profession. For example, all the “members” must be lawyers OR doctors OR accountants OR some other profession. You cannot form a PLLC with two lawyers and a doctor, or some other combination; you also cannot form a PLLC with two members and one is a “professional” member, and the other member is his or her spouse. This requirement also limits the type of businesses or services performed by the PLLC. For instance, a PLLC formed by lawyers can only offer legal services, and a PLLC formed by accountants can only offer accounting services.
2. What’s Required to Form a PLLC
The second key difference between an LLC and a PLLC is the requirements to form a PLLC in terms of when you file with the Oklahoma Secretary of State. In Oklahoma, there is no requirement that one or a group of professionals form a PLLC instead of an LLC. However, there are additional requirements to form a PLLC rather than an LLC. The primary additional requirement is that you must provide the Oklahoma Secretary of State with a certificate from the regulating board of the profession that each person who will be a “member” (owner) or manager, of the professional entity, and who are to engage in the practice of the profession, is duly licensed according to the provisions of Oklahoma’s licensing laws for the profession to practice the profession. The “regulating board” is the board (or organization) which is charged with licensing and regulation of the practice of the profession for which the PLLC is organized to render. For example, if a group of lawyers want to form a PLLC, each of them will need to obtain certificates of good standing from the Oklahoma Bar Association. Also, the Oklahoma Secretary of State requires distinct Articles of Organization which must be physically signed in order to form a PLLC. This form requires the organizers of the PLLC to state the profession to be practiced through the PLLC because Oklahoma law that a PLLC be formed only for the purpose of providing a specific professional service to the exclusion of others.
3. Liability Protection
The third key difference between an LLC and a PLLC is the scope of liability protection. A PLLC will not protect its members from malpractice claims related to his or her own professional actions. However, PLLC members are protected from malpractice claims alleged against other PLLC members. For instance, if you’re a doctor in a medical PLLC, and a patient sues a different doctor from your practice, then your personal finances will be protected. Your liability will also be limited to the percentage that you own of the business. Nevertheless, PLLC members should always carry malpractice insurance to cover claims made against him or her personally. Another issue involving liability protection in PLLCs (and LLCs and other business entities) is the possibility of a personal guaranty. Due to increased risks that lenders face with PLLCs, many lenders will require a personal guaranty before approving a loan to the PLLC. If a PLLC member makes a personal guaranty on such a loan (or lease), that PLLC member will be personally liable for the debt, lease, or other obligation to the business.
Thinking about starting a small business? Or maybe your small business is having issues with contracts, leases, business partners, collection issues, or experiencing other barriers to growth? Please contact me at Jonathan@libertylegalok.com to schedule a FREE strategy session.
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