PC vs. PLLC: What’s the difference?

Learn the key differences between a PC and PLLC, including structure, taxes, and when to choose each.

ARTICLE SUMMARY

A Professional Corporation (PC) and a Professional Limited Liability Company (PLLC) are business structures designed for licensed individuals. Both allow them to operate legally while meeting state licensing requirements. However, they differ in management rules, tax treatment, and state availability.

In some states, professionals can choose between a PC and a PLLC. In others, only one structure is allowed. For example, California does not allow most licensed professionals to form PLLCs, making the PC the standard option in that state.

Understanding the differences between these two structures can help you choose the one that fits your profession, tax goals, and state requirements.

PC vs. PLLC: Key Differences

The main differences between a PC and a PLLC involve structure, management, and taxes.

Professional Corporation (PC)

A PC follows corporate rules. It:

Has shareholders instead of members.
Requires directors and officers.
Must follow corporate formalities, such as bylaws and annual meetings.
Uses a traditional, top-down management structure.

PCs are often familiar to larger medical practices and law firms.

Professional Limited Liability Company (PLLC)

A PLLC follows LLC-style rules. It:

Has members instead of shareholders.
Can be member-managed or manager-managed.
Has fewer required formalities in most states.
Offers more flexibility in daily operations.

PLLCs are often preferred by solo professionals and small practices because they are easier to manage.

What Both Structures Have in Common

Both PCs and PLLCs:

Are limited to licensed professionals.
Must comply with state licensing laws.
Protect owners from personal liability for business debts.
Protect owners from liability for malpractice committed by other owners.
Do not protect owners from liability for their own malpractice.

Which Professionals Typically Form PCs or PLLCs?

PCs and PLLCs are generally used by licensed professionals who provide regulated services.

Common professions include:

Doctors and other healthcare providers
Dentists
Veterinarians
Attorneys (lawyers)
Accountants and Certified Public Accountants (CPAs)
Architects and engineers
Mental health professionals, such as therapists and counselors

These professions require a state-issued license to provide services. Because of this, many states restrict them from using standard LLCs or corporations and instead require a professional entity.

Whether a specific profession must form a PC, a PLLC, or may choose between them depends on state law.

When Is a PC or PLLC Required?

A specific structure may be required when:

The business provides services that require a state-issued professional license.
State law restricts the use of standard LLCs or corporations.
Licensing boards impose ownership rules, such as Corporate Practice of Medicine (CPOM) doctrines that require licensed professionals to control the practice.

If your state restricts one structure, your choice may already be made for you.

Which States Allow PLLCs, PCs, or Both?

State law determines whether professionals can form a PC, a PLLC, or choose between the two.

Table with data content
States That Require PCs	States That Allow Both PCs and PLLCs
Alaska, California, Delaware, Georgia, Hawaii, Indiana, Louisiana, Maryland, Missouri, Nebraska, New Jersey, New Mexico, Ohio, Oregon, Rhode Island, South Carolina, Wisconsin, and Wyoming.	Alabama, Arizona, Arkansas, Colorado, Connecticut, District of Columbia, Florida, Idaho, Illinois, Iowa, Kansas, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nevada, New Hampshire, New York, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, and West Virginia.

Table with horizontally scrollable content
States That Require PCs	Alaska, California, Delaware, Georgia, Hawaii, Indiana, Louisiana, Maryland, Missouri, Nebraska, New Jersey, New Mexico, Ohio, Oregon, Rhode Island, South Carolina, Wisconsin, and Wyoming.
States That Allow Both PCs and PLLCs	Alabama, Arizona, Arkansas, Colorado, Connecticut, District of Columbia, Florida, Idaho, Illinois, Iowa, Kansas, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nevada, New Hampshire, New York, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, and West Virginia.

How to Choose Between a PC and a PLLC?

If your state allows both options, choosing between them usually involves comparing management requirements, administrative burden, and tax treatment.

Below is a simplified comparison:

Table with data content
Feature	Professional Corporation (PC)	Professional Limited Liability Company (PLLC)
Management	Board of directors, officers, shareholders.	Member-managed or manager-managed.
Formalities	Annual meetings and minutes required.	Fewer required formalities in most states.
Taxation	C-Corporation (may elect S-Corp).	Pass-through taxation (may elect S-Corp).
Ownership	Shareholders hold stock.	Members hold ownership interests

Table with horizontally scrollable content
Feature	Management	Formalities	Taxation	Ownership
Professional Corporation (PC)	Board of directors, officers, shareholders.	Annual meetings and minutes required.	C-Corporation (may elect S-Corp).	Shareholders hold stock.
Professional Limited Liability Company (PLLC)	Member-managed or manager-managed.	Fewer required formalities in most states.	Pass-through taxation (may elect S-Corp).	Members hold ownership interests

A PC generally requires more paperwork and formal procedures. A PLLC usually offers more operational flexibility.

Choosing the right structure can affect your taxes, administrative workload, and compliance requirements. If you are unsure which option your state requires — or which structure best fits your practice — an attorney can help you review your options..

KEY TAKEAWAYS

PCs and PLLCs are business structures for licensed professionals.
A PC follows corporate rules and has stricter formalities.
A PLLC follows LLC-style rules and offers more flexibility.
Both protect owners from business debts and co-owner malpractice.
Neither protects owners from their own malpractice.
State law determines whether professionals must form a PC, a PLLC, or may choose between them.
Tax treatment differs: PCs default to corporate taxation, while PLLCs default to pass-through taxation.

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