Delaware does not offer a separate professional limited liability company entity. A Delaware PLLC, in practice, is a standard LLC formed under Title 6, Chapter 18 of the Delaware Code by someone who happens to hold a professional license, plus whatever extra conditions that person’s licensing board attaches to practicing through a business entity. You file the same Certificate of Formation, pay the same $300 annual franchise tax, and keep the entity in good standing the same way any other Delaware LLC does. The professional layer sits on top, and it comes from your licensing board, not from the Division of Corporations.
Who This Route Is For
Delaware defines a “professional service” as any personal service that requires a license or other legal authorization before it can be offered to the public. The statute names architects, certified public accountants, chiropractors, dentists, physicians, optometrists, osteopaths, podiatrists, professional engineers, veterinarians, and attorneys, and the definition is broad enough to reach other licensed fields.1Justia. Delaware Code Title 8 Chapter 6 Section 603 – Definitions
That definition sits in Title 8, Chapter 6, which governs professional service corporations. Delaware’s LLC Act contains no parallel subchapter carving out professional LLCs, so there is nothing in the state’s business entity code that limits who can form an LLC to practice a licensed profession. The gating happens at the board level. Your professional licensing board may set rules on who can hold an ownership interest, whether the entity must register with the board separately, and how the firm’s name must be presented to the public. Check those rules before you file anything with the state; some boards will refuse to recognize a firm structure they were not consulted about.
What Liability Protection Really Covers
Under Delaware’s LLC Act, the debts and obligations of the company belong to the company. No member or manager is personally liable for those obligations solely by virtue of being a member or manager.2Delaware Code Online. Delaware Code Title 6 Chapter 18 Subchapter III – Members A lease dispute, an unpaid vendor, a slip-and-fall in your waiting room — the entity answers for those, not you personally.
Professional malpractice is the exception every licensed professional needs to understand before they file. No LLC in any state severs the link between a licensed professional and their own negligent work. Delaware’s professional corporation statute states this plainly: an officer, employee, or shareholder remains “personally and fully liable” for their own negligent or wrongful acts while rendering professional services.3Justia. Delaware Code Title 8 Chapter 6 Section 608 – Chapter Not to Affect Professional Responsibility The same principle carries over to professional LLCs. You cannot form your way out of accountability for your own work.
Where the LLC structure earns its keep is with a partner’s malpractice. In a general partnership, every partner can be exposed when any one of them makes a professional error. An LLC breaks that chain. If one member of a three-person medical practice is sued for malpractice, the other two members are generally insulated from personal liability for that claim. For any multi-member professional practice, that alone justifies the filing.
Naming the Entity
The name must include “Limited Liability Company,” the abbreviation “L.L.C.,” or the designation “LLC.”4Justia. Delaware Code Title 6 Chapter 18 Subchapter I Section 18-102 – Name Set Forth in Certificate Delaware imposes no requirement to use “Professional Limited Liability Company” or “P.L.L.C.” — the state simply doesn’t have that designation. You can still include those words if your licensing board wants them or if you prefer the clarity for clients.
The name must also be distinguishable from every other entity on file with the Secretary of State, whether corporation, partnership, trust, or another LLC.4Justia. Delaware Code Title 6 Chapter 18 Subchapter I Section 18-102 – Name Set Forth in Certificate Check availability through the Division of Corporations website before you commit. If the name you want is taken, written consent from the current holder can still open a path to using it.
Filing the Certificate of Formation
The formation document is a short Certificate of Formation available as a PDF from the Delaware Division of Corporations.5Delaware Division of Corporations. Corporate Forms and Certificates for a Limited Liability Company It asks for two things: the exact name of the LLC, and the name and street address of a registered agent in Delaware.6Delaware Division of Corporations. Certificate of Formation of a Limited Liability Company
Every Delaware LLC must maintain a registered agent with a physical Delaware office to accept legal documents and service of process.7Justia. Delaware Code Title 6 Chapter 18 Subchapter I Section 18-104 – Registered Office; Registered Agent If you don’t have a physical location in the state, you’ll hire a commercial registered agent, typically for $50 to $300 a year depending on the provider.
You can file online through the Division of Corporations’ document filing service, or send the certificate by mail or fax to Dover. The filing fee is $110. Confirm the current amount on the Division of Corporations fee schedule before submitting, since fees can change.8Delaware Division of Corporations. Corporate Fee Schedule Once processed, the state returns a stamped copy of the certificate. Keep it. You’ll need it to open a business bank account, apply for an EIN, and register the entity with your professional board.
Write an Operating Agreement Even Though Delaware Doesn’t Require One
Delaware treats an LLC agreement as any agreement about the company’s affairs, written, oral, or implied, and does not require the LLC to execute one.9Delaware Code Online. Delaware Code Title 6 Chapter 18 Subchapter I – General Provisions For a professional practice, relying on an oral or implied understanding is a mistake. A written agreement lets you address the issues that actually come up in licensed practices:
- Who can hold a membership interest, and what happens when a member loses their license
- How a departing member’s interest gets valued and bought out on retirement, death, or disability
- How profits and losses are allocated when members contribute unequal billable work
- Whether the LLC is member-managed or manager-managed, and which decisions need unanimous consent
- The events that trigger dissolution and the process for winding down
Without a written agreement, Delaware’s default LLC rules fill every gap, and those defaults were not written with professional practices in mind.
How the LLC Is Taxed
The IRS does not treat a professional LLC differently from any other LLC. A single-member LLC is a disregarded entity by default, with income flowing to your personal return. A multi-member LLC is taxed as a partnership by default, with each member receiving a Schedule K-1.10Internal Revenue Service. LLC Filing as a Corporation or Partnership
You can elect corporate treatment by filing Form 8832. For S-corporation treatment, file Form 2553 directly; the IRS treats that filing as an automatic election to be classified as a corporation and taxed under Subchapter S.11Internal Revenue Service. Form 8832 Entity Classification Election An S-corp election can reduce self-employment taxes for members who pay themselves a reasonable salary and take the rest as distributions, but the math only favors you above a certain income level, and once you make a classification election you generally can’t change it again for 60 months.
Active members of a partnership-taxed LLC owe self-employment tax on their share of firm income, covering both halves of Social Security and Medicare. That surprise is the biggest tax shock for new LLC owners. Talk to a tax advisor before you lock in a classification.
Annual Franchise Tax and Good Standing
Every Delaware LLC owes a flat $300 annual franchise tax regardless of revenue or activity. It is due by June 1 each year.12Justia. Delaware Code Title 6 Chapter 18 Subchapter XI Section 18-1107 – Taxation of Limited Liability Companies and Registered Series
Miss the deadline and you pick up a $200 late penalty plus interest at 1.5% per month on the unpaid balance.12Justia. Delaware Code Title 6 Chapter 18 Subchapter XI Section 18-1107 – Taxation of Limited Liability Companies and Registered Series Ignore it for three consecutive years and Delaware will cancel your Certificate of Formation on the third anniversary of the first missed due date. A canceled entity has no legal existence, so it cannot enter contracts, sue, or defend itself until you revive it by paying all back taxes, penalties, and interest.
Keep your professional license current too. The LLC is the container; your license is the authorization to practice. If a member’s license lapses or is revoked, the entity may lose its authority to offer those services, and the licensing board can act against the firm independently of anything the Division of Corporations does.
Practicing in Other States
A Delaware formation does not carry your right to practice into other states. If you see clients or patients across state lines, you’ll usually need to foreign-qualify by filing a certificate of authority (sometimes called an application for registration) with that state’s secretary of state, which typically means a certificate of good standing from Delaware, a registered agent in the new state, and a filing fee that varies by jurisdiction.
Professional practices face a second layer. Many states require the professional entity to register with the relevant state licensing board and meet that state’s rules for professional entities. Some states only recognize PLLCs formed under their own statutes, which can force you to form a separate in-state entity instead of foreign-qualifying your Delaware LLC. Check both the business registration and professional licensing rules in every state where you plan to practice before assuming your Delaware entity is enough.