By David M. Steingold , Attorney
Updated by Amanda Hayes , Attorney University of North Carolina School of Law
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As a licensed professional in Massachusetts, you have the option of structuring your business as a Massachusetts professional limited liability company (PLLC). This business structure is an attractive option for small business owners who provide professional services. Let's take a look at this business structure and its advantages and requirements.
A Massachusetts PLLC is a limited liability company (LLC) formed specifically by people who provide professional services licensed by the state of Massachusetts. A PLLC functions similarly to an LLC. In both entity structures, you can have one or more owners, called "members," who can directly manage and run the business.
An LLC is a popular business structure for small business owners because it allows for a flexible management structure and limited liability. In addition, an LLC has various tax advantages: It can be taxed as a corporation, partnership, S corporation, or disregarded entity (for single-member LLCs).
Massachusetts PLLCs are governed by Massachusetts's Limited Liability Company Act: Mass. Gen. Laws ch. 156C, §§ 1 and following (2024).
As mentioned earlier, Massachusetts PLLCs are reserved for those who provide professional services that require licensing from a Massachusetts authority. So, what are "professional services"?
According to Massachusetts law, "professional services" include services performed by licensed or registered:
If you're licensed to practice one of these professions in Massachusetts you should be able to form a Massachusetts PLLC. More generally, any person who's required by state law to have a Massachusetts license before providing services should be able to form a Massachusetts PLLC for those services, as long as your profession's rules allow for it.
Forming a PLLC in Massachusetts is very similar to forming a regular LLC in Massachusetts.
Your PLLC's business name must follow the same naming rules as regular LLCs. Specifically, Massachusetts law requires that your LLC's name contain either:
Your PLLC's name can include the name of a member or manager but doesn't have to. Also, your PLLC's name can't be deceptively similar to the names of any domestic or out-of-state corporation, limited partnership, or LLC formed or registered with the Massachusetts Secretary of State (SOS). (Mass. Gen. Laws ch. 156C, § 3 (2024).)
You can see which names are already on file with the SOS by looking up your proposed name on the Corporation Division's business entity database.
If you're not yet ready to form your PLLC but want to claim a name for your business—for instance, to prevent others from registering a business under your desired name—you can reserve a business name with the SOS. You can reserve a business name for exclusive use for 60 days by filing an Application of Reservation of Name with the SOS. You can renew the business name reservation for another 60 days. (Mass. Gen. Laws ch. 156C, § 4 (2024).)
As of 2024, the filing fee to reserve a business name is $30.
PLLC members who will perform professional services under the PLLC must be licensed. To form a PLLC, you must show proof that all members and managers who will provide a professional service are properly licensed and in good standing with their regulatory board. You must request a certificate of compliance or good standing or other document from your regulating authority to prove that each applicable member or manager is currently in compliance with the board's eligibility standards. (Mass. Gen. Laws ch. 156C, § 6 (2024).)
You'll attach these certificates to your Certificate of Organization when you legally create your LLC.
To form your Massachusetts PLLC, you must file a Certificate of Organization (called "articles of organization" in other states) with the SOS. Your certificate must include the same information as a certificate for a regular LLC, such as:
(Mass. Gen. Laws ch. 156C, § 12 (2024).)
Massachusetts law requires the certificate for PLLCs to include additional information, including:
(Mass. Gen. Laws ch. 156C, § 6 (2024).)
In addition, you can also add the names of any person who's authorized to execute, acknowledge, deliver, and record any recordable instrument for real property on the PLLC's behalf. However, you're not required to include this information in the certificate. (Mass. Gen. Laws ch. 156C, § 12 (2024).)
As of 2024, the fee to file your certificate of organization is $500. (Mass. Gen. Laws ch. 156C, § 12 (2024).)
Massachusetts doesn't require LLCs, including PLLCs, to have an operating agreement. However, adopting an operating agreement for your PLLC is a crucial early step in creating your PLLC.
An operating agreement helps to lay out the operating rules for your PLLC so that members, managers, employees, and others can all be on the same page. Resolving any potential issues at the start can help avoid conflict between members later on. Your operating agreement should outline the following:
In addition, an operating agreement shows outsiders (such as banks and creditors) that you and your company are separate entities. This show of separation helps to reinforce your liability protections under the PLLC.
Your operating agreement should include buyout (also called "buy-sell") provisions. Alternatively, you can draft a separate buyout agreement. A buyout agreement covers what happens to a member's ownership share when that member is no longer part of the company, including who can buy their share and what events can trigger a buyout. This agreement can prove particularly useful to PLLCs.
Depending on your level of knowledge and expertise, you should consider having a lawyer assist you in preparing an operating agreement and buyout agreement.
In addition to filing a certificate of organization with the SOS, your PLLC might have other filing and financial obligations. PLLC members also have their own legal responsibilities, such as maintaining and renewing their professional licenses.
Your PLLC might be responsible for paying and filing the following fees and taxes:
You can learn more about these taxes in our article about Massachusetts LLC annual report and tax filing requirements.
Depending on your location and service industry, you could have additional regulatory requirements to follow.
Forming your professional service business as a PLLC will generally protect you personally from:
PLLCs give owners limited liability, however, meaning you'll still be liable in some instances, such as if:
Regarding general protection from liability for the malpractice of fellow PLLC members, be aware that your PLLC will likely need to obtain a minimum amount of malpractice insurance, as discussed below.
Massachusetts requires state regulating boards to adopt rules requiring PLLCs and their members to obtain a designated amount of liability insurance. The required amount of insurance should be sufficient to cover:
(Mass. Gen. Laws ch. 156C, § 65 (2024).)
Accordingly, the requirement for liability insurance will depend on your profession. For example, a PLLC organized to perform architectural services in Massachusetts must maintain a professional liability insurance policy that either:
You should review your regulatory board's rules for your insurance requirements.
Every state has different rules for what kind of business entity professionals can form. Some states require professionals to form a special entity, while other states give professionals the option. The type of professional entity available also depends on your state. Some states recognize PLLCs and professional corporations (PCs). Other states recognize only one or neither.
It's important to note that a PLLC isn't the same as a PC. Here are some key differences:
The tax differences between PLLCs and PCs can become complicated. For example, a PC can elect a special tax status (S corporation status) that effectively makes it a pass-through tax entity like a PLLC. PCs that don't elect special status can be subject to double taxation—in other words, both the PC itself and its shareholders have to pay taxes on business income.
Massachusetts allows professionals to form both PLLCs and PCs. Both PLLCs and PCs provide liability protection for, respectively, their members or shareholders.
The Massachusetts government website has a helpful webpage on LLCs (and LLPs) that links to:
If you're just starting the formation process and you want to learn more about LLCs, this webpage is a great starting point.
The Massachusetts Department of Revenue (DOR) also has a webpage for new businesses that walks you through how to register your business with the DOR for state taxes.
You can also check out the LLC section of our website for guidance and tips on how to form, manage, operate, and dissolve your PLLC.
Before forming a PLLC, make sure you understand the advantages and disadvantages as well as the requirements and restrictions of the business entity structure. Consider speaking with a local business attorney about your options.