How to Form a Professional LLC in Massachusetts

Here are the basic rules for forming professional limited liability companies in Massachusetts.

By , Attorney
Updated by Amanda Hayes, Attorney ● University of North Carolina School of Law
Updated 6/20/2024

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.

What Is a Massachusetts PLLC?

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).

What Is a Professional Service?

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:

  • physicians and surgeons
  • chiropractors
  • podiatrists
  • engineers
  • electrologists
  • physical therapists
  • psychologists
  • certified public accountants
  • public accountants
  • dentists
  • veterinarians
  • optometrists
  • acupuncturists
  • registered nurses, and
  • attorneys.

(Mass. Gen. Laws ch. 156A, § 2 (2024).)

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.

How Do I Form a Massachusetts PLLC?

Forming a PLLC in Massachusetts is very similar to forming a regular LLC in Massachusetts.

1. Choose a Name for Your Massachusetts PLLC

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:

  • "Limited Liability Company"
  • "Limited Company," or
  • an abbreviation of one of the above phrases.

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.

2. Obtain Proof of License From Your Regulatory Board

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.

3. File a Certificate of Organization With the SOS

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:

  • the name of your PLLC
  • the name and address of the PLLC's resident agent (also known as a "registered agent")
  • the written consent of the resident agent, either included on the certificate form or attached to it
  • a specific date of dissolution, if the PLLC has one
  • the names and addresses of the PLLC's managers, if any, and
  • the name of any other person authorized to execute documents to be filed with the SOS on behalf of the PLLC.

(Mass. Gen. Laws ch. 156C, § 12 (2024).)

Massachusetts law requires the certificate for PLLCs to include additional information, including:

  • the specific professional services your PLLC will provide
  • any conditions or limitations established by your regulatory board, including the liability insurance requirement
  • the names and addresses of PLLC members and managers who will provide professional services, and
  • certificates from the regulatory board showing the practicing members and managers are in good standing (as discussed earlier).

(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).)

You can file your certificate online or mail in or hand deliver a completed Professional LLC Certificate of Organization form to the SOS.

As of 2024, the fee to file your certificate of organization is $500. (Mass. Gen. Laws ch. 156C, § 12 (2024).)

4. Create an Operating Agreement for Your PLLC

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:

  • the relationships among the company and its members, managers, officers, and assignees of membership interests, and
  • the internal affairs of the company.

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.

5. Comply With Licensing, Tax, and Regulatory Requirements

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.

A PLLC Will Not Protect You From All Liability

Forming your professional service business as a PLLC will generally protect you personally from:

  • creditors seeking to collect unpaid debts owed solely by the PLLC
  • liability for the malpractice of other PLLC members (technically known as "vicarious liability"), and
  • people who are personally injured in connection with your PLLC because of things having nothing to do with your own professional malpractice or torts (for example, if someone slips and falls in your PLLC's offices).

PLLCs give owners limited liability, however, meaning you'll still be liable in some instances, such as if:

  • you personally guarantee repayment of a business loan
  • you engage in professional malpractice (such as completely botching a patient's treatment or egregiously mishandling a client's case), or
  • you intentionally or negligently commit a tort (such as assaulting someone).

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.

Liability Insurance for PLLCs and Members

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:

  • negligence
  • wrongful acts, and
  • errors and omissions.

(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:

  • is an amount of at least $50,000 plus $25,000 per PLLC member and employee who is a registered architect, or
  • is sufficient to provide coverage of at least $300,000 for each claim with an aggregate limit of $1,000,000 per year.

(231 Mass. Code Regs. 4.04 (2024).)

You should review your regulatory board's rules for your insurance requirements.

PLLC vs. Professional Corporation

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:

  • a PLLC, like other LLCs, is comprised of members, but a PC, like other corporations, is comprised of shareholders
  • following from the previous point, PLLC ownership consists of so-called membership interests in the business, but PC ownership is based on shares of stock; and
  • a PLLC, like other LLCs, is a so-called "pass-through tax entity", meaning that in most states only the individual members have income tax obligations (and not the PLLC), while a PC, like other corporations, usually has its own, separate income tax obligations in addition to the shareholders' tax obligations.

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.

Additional Information About Forming a Massachusetts PLLC

The Massachusetts government website has a helpful webpage on LLCs (and LLPs) that links to:

  • state laws
  • state regulations
  • court rules
  • forms, and
  • web and print sources.

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.

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