Florida Professional LLC

A Florida professional limited liability company (PLLC) is an LLC organized under Chapter 621 to render a licensed professional service. Chapter 621 restricts who may own the entity, requires a professional designation in its name, and sets the liability rules for its owners. Nothing in Chapter 605, which governs standard LLCs, limits membership to licensed professionals.

The most important distinction for asset protection is that a PLLC does not shield a professional from personal malpractice liability. Each member remains personally liable for negligent or wrongful acts committed by that member or by anyone under that member’s direct supervision. The entity protects members from the malpractice of co-members they do not supervise and shields personal assets from business debts like lease obligations, vendor contracts, and equipment financing.

PLLC Formation Requirements

All members of a professional LLC must be authorized to render the same professional service. Individuals qualify by holding the license, and a professional corporation or another professional LLC organized for that same service can also hold membership. A member may transfer that interest only to another person or entity eligible to hold it. The company is organized for the sole and specific purpose of rendering that professional service.

The entity name must include “professional limited liability company” or an accepted abbreviation such as “PLLC.” The entity may operate under a fictitious name that omits the professional designation, provided the fictitious name is properly registered with the state.

A PLLC may not engage in any business other than the professional services for which it was organized, although the statute permits the entity to invest its funds in real estate, stocks, bonds, and other investments. A physician’s PLLC cannot also operate a retail business or consulting practice outside its licensed scope, but it can hold investment assets purchased with practice revenue.

PLLC Compared to Professional Association

Florida professionals have two entity choices under Chapter 621: the professional LLC and the professional association (PA). A PA is a corporate entity governed by both Chapter 621 and the Florida Business Corporation Act. A PLLC is governed by Chapter 621 and the Florida Revised Limited Liability Company Act.

Both entities provide identical malpractice liability rules. A member or shareholder is personally liable only for that individual’s own professional negligence or the negligence of those under direct supervision. In both structures, the entity’s entire property is at risk if any member commits malpractice while acting on the entity’s behalf.

Creditor Remedies

The creditor remedy available against each entity type is the most consequential difference for asset protection. A PA is a corporation, and corporate stock is subject to levy. A judgment creditor holding a writ of execution can seize a debtor’s PA stock, take control of the entity’s bank accounts and receivables, and potentially close the business.

Creditor attorneys often attack professionals who operate through a PA by seeking appointment of a receiver over the debtor’s stock and practice. A receivership over a medical practice or a law firm runs into patient confidentiality and legal privilege. The disruption to operations and revenue is itself the pressure to settle.

A PLLC membership interest falls under Florida’s charging order statute like any other LLC interest. Against a PLLC with more than one member, the creditor’s only remedy is a charging order, a lien that redirects distributions without transferring the interest or a vote. Against a solo practitioner’s single-member PLLC, a court may order the interest sold once the creditor shows distributions will not satisfy the judgment in a reasonable time. In a group practice, the remaining professionals keep running the firm while the creditor collects the debtor member’s distributions.

Governance and Tax Differences

A PA follows corporate formalities including annual shareholder meetings, board resolutions, and officer appointments. A PLLC offers the same management flexibility as a standard LLC, with fewer required formalities and the ability to structure governance through the operating agreement.

For tax purposes, either entity can elect S corporation treatment, but the PLLC can also be taxed as a disregarded entity or partnership without the corporate formality requirements.

A missed annual report deadline has the same consequence for a PA and a PLLC. Reinstatement under either statute relates back to the effective date of the administrative dissolution, and the entity may resume its activities as though the dissolution had not occurred. Reinstatement does not disturb rights someone acquired in reliance on the dissolution before learning of the reinstatement.

Malpractice Liability and the Corporate Shield

No Florida entity structure eliminates personal liability for professional malpractice. Section 621.07 preserves the full scope of professional liability law between the practitioner and the person receiving services. The entity form affects only who among the practice’s owners shares that liability.

In a solo practice organized as a PLLC, the single member bears the same malpractice exposure as a sole proprietor. The PLLC adds no malpractice protection because the only member is the person rendering the services. The entity’s value in that situation is separating business debts from personal assets. Charging order protection is weaker in a solo practice, because a court can order a foreclosure sale of the sole member’s interest.

In a multi-practitioner firm, the PLLC insulates each member from co-members’ malpractice. A physician in a group practice is not personally liable for another physician’s surgical error unless the first physician directly supervised the procedure. The entity’s assets remain exposed to any member’s malpractice claim, but the non-negligent members’ personal assets are protected. This protection does not extend to supervisory relationships, where the supervising member remains personally liable for the supervised individual’s negligence.

Ownership With a Non-Licensed Spouse

A non-licensed spouse cannot hold membership in a PLLC. Chapter 621 limits membership to individuals, professional corporations, and professional limited liability companies authorized to render the same professional service. The restriction leaves the professional in a single-member LLC, more exposed than a multi-member LLC because a court may order the sole member’s interest sold when charging-order distributions will not satisfy the judgment in a reasonable time. The restriction also forecloses entireties ownership. A membership interest the spouses could hold as tenants by the entirety would be out of reach of either spouse’s individual creditors.

Organizing the practice under Chapter 605 instead of Chapter 621 avoids the restriction. A standard LLC has no licensing requirement for its members, and the professional’s license stays attached to the professional rather than to the business entity. That leaves the professional free to add a non-licensed spouse as a co-member and to hold the membership interest as tenants by the entirety.

A non-licensed co-owner also affects whether the practice keeps its exemption from Florida’s health care clinic licensing law. The law exempts from clinic licensure a physician practice wholly owned by licensed health care practitioners together with the spouse, parent, child, or sibling of a practitioner. The exemption holds only where one of the licensed owners supervises the business activities and is legally responsible for the entity’s compliance with all federal and state laws. A physician who adds a non-licensed spouse on those terms keeps the exemption.

Accountants answer to a statute of their own. A non-CPA member of a Florida accounting firm must work in the firm as a principal occupation. Real estate brokers and financial advisers have generally been allowed to add a non-licensed spouse, though different divisions of the Department of Business and Professional Regulation have given conflicting answers. The Florida Bar Rules of Professional Conduct limit law firm ownership to licensed attorneys, so a non-licensed spouse cannot become a member of a law firm LLC. Requirements vary enough by profession that each needs its own answer.

Asset Protection Strategies for Professionals

Because a PLLC does not protect against malpractice claims, asset protection for professionals requires planning beyond entity selection. Malpractice insurance provides the first layer of defense, covering claims up to policy limits. The entity structure provides the second layer, shielding personal assets from the practice’s business debts. Additional planning addresses the exposure that remains between malpractice policy limits and the professional’s total net worth.

Florida’s statutory exemptions protect certain categories of assets regardless of the claim type. The homestead exemption shields a primary residence without a value cap. Florida law exempts money in a tax-qualified retirement plan or IRA from creditors’ claims, with narrow exceptions for a qualified domestic relations order and a surviving spouse’s elective share. Life insurance cash values and annuity proceeds are also exempt.

Professionals should consider whether investment holdings belong inside the practice entity. A physician who holds rental property inside the medical practice PLLC exposes those investments to malpractice claims against any member, because the entity’s entire property is at risk when a member commits professional negligence. Holding investment real estate in a separate LLC organized for rental property isolates those assets from practice-related claims.

Professionals with substantial liquid assets beyond exempt categories may benefit from offshore trust structures that place assets beyond the reach of domestic judgments. Whether offshore planning makes sense depends on total exposure, insurance adequacy, and how much non-exempt wealth is at risk. For professionals whose malpractice risk is high and whose non-exempt wealth exceeds their policy limits, an offshore trust addresses the exposure that neither entity structure nor statutory exemptions cover.

How an LLC is structured determines whether a creditor reaches only distributions or gains access to the entity’s assets and management. For professional entities, that structural question begins with the choice between a PA and a PLLC and extends through membership composition, operating agreement terms, and how the practice holds its non-practice assets.