PLLCs vs. LLCs: Who Should Have a Professional LLC?

 Posted on August 26, 2025 in Business Law

If you are a licensed professional in Illinois, you may be wondering whether you should form a Professional Limited Liability Company (PLLC) rather than a standard Limited Liability Company (LLC). Illinois has specific rules for certain regulated professions, and choosing the wrong entity type can cause costly delays or even prevent you from registering your business properly.

Understanding the right business structure of your practice is an important part of protecting yourself and helping your professional practice thrive. Call our Kendall County business law attorney today to learn more about PLLCs and whether you could benefit from one. 

What Is a Professional LLC (PLLC)?

A PLLC is a type of LLC designed for professionals who provide services that require a state license. In Illinois, if you hold a professional license, such as in medicine, law, or accounting, you may be required to form a PLLC instead of a traditional LLC.

Forming a PLLC can provide several benefits, including:

• Personal liability protection for business debts and lawsuits

• Flexible taxation and management options

• Compliance with Illinois laws governing regulated professions

It is important to note, however, that neither an LLC nor a PLLC protects you from liability for your own malpractice as defined by Illinois statute 735 ILCS 5/2-622. If a client or patient sues you for negligence or professional errors, your personal assets may still be at risk even if your business is structured properly.

How Is a PLLC Different From a Regular LLC?

While PLLCs and LLCs share many similarities, there are several important differences. Anyone can own a standard LLC, but a PLLC may only be owned by licensed professionals who are authorized by IDFPR and hold a state license for their field. 

Additionally, the name of a regular LLC must simply include "LLC," but a professional entity must use "PLLC" or a similar designation in its official title. Finally, an LLC can provide services through any individual, licensed or not, whereas a PLLC can only deliver services through licensed members of the profession.

Why a PLLC or LLC Does Not Protect Against Malpractice

Many physicians, attorneys, accountants, therapists, nurse practitioners, and others form LLCs or PLLCs to protect themselves from personal liability for general business debts. This is a wise step, but it is crucial to understand its limits. 

You cannot use either structure to shield yourself from liability for your own professional negligence. Instead, malpractice insurance and other asset protection strategies are essential to safeguard your personal finances.

Who Needs a PLLC in Illinois?

Under Illinois law, professionals licensed by the Illinois Department of Financial and Professional Regulation (IDFPR) may be required to form a PLLC. These include:

• Physicians, nurse practitioners, chiropractors, and other medical professionals

• Dentists

• Attorneys

• Certified Public Accountants (CPAs)

• Architects and engineers

• Psychologists, counselors, and therapists

• Veterinarians

• Optometrists

• Physical therapists

If you are a nurse practitioner opening a clinic, a CPA starting an accounting firm, or a therapist launching a private practice in Plainfield, you will likely need to form a PLLC to comply with IDFPR requirements.

What Is the Process to Set Up a PLLC in Illinois?

1. Confirm license eligibility – You must hold a valid Illinois license in your profession.

2. Check with IDFPR – Ensure your business model complies with state rules and ownership restrictions.

3. Draft articles of organization – Specify that you are forming a professional LLC.

4. File with the Illinois Secretary of State – Submit the correct formation documents with the PLLC designation.

5. Obtain licensing board approval – In some cases, your PLLC must be approved by your licensing authority.

6. Create an operating agreement – Establish ownership, management, and rules for your practice.

7. Register for tax IDs and permits – Obtain an EIN and any required local licenses or permits.

Do You Really Need a PLLC if You Are a Licensed Practitioner in Illinois?

If you are a licensed professional starting a practice in Illinois, the answer is usually yes – you do need a PLLC. Forming a PLLC ensures compliance with Illinois law, avoids regulatory complications, and gives your business a professional foundation. If you are unsure, it is wise to consult an attorney before proceeding.

Call a Plainfield, IL LLC and PLLC Attorney 

At Gateville Law Firm, our Kendall County business law attorney helps licensed professionals with the formation of PLLCs and compliance with Illinois regulations. We go beyond entity formation, helping clients implement asset protection strategies that safeguard both personal and business wealth from potential creditor claims.

If you are preparing to start or restructure your professional practice, do not risk making mistakes with your legal structure. Contact Gateville Law Firm today at 630-780-1034 to schedule a free consultation. We will help you form your PLLC with clarity, confidence, and protection for your future.