You might think about setting up a PLLC, or professional limited liability company, if you intend to launch a business in Massachusetts. In contrast to the regular LLC, a PLLC is normally only used by licensed professionals including lawyers, doctors, accountants, and architects. What does the “P” in Professional Limited Liability Company (PLLC) stand for?
The “P” in PLLC stands for “Professional,” denoting that the company is made up of duly licensed professionals who are subject to rules and ethical guidelines specific to their disciplines. This kind of business structure gives its owners personal liability protection and enables them to function as a different legal entity. This implies that the company can enter into agreements, acquire property, and accrue debts without putting the owners’ personal assets at risk.
A Massachusetts tax ID number must be obtained if you intend to establish a PLLC there. You can submit an application for this by mail or online through the website of the Massachusetts Department of Revenue. Additionally, the Massachusetts Secretary of State’s office is where you must register your PLLC. This entails submitting the Articles of Organization and designating a registered agent to receive legal and tax correspondence on the business’s behalf.
In Massachusetts, you have the option of acting as your own registered agent, but you must have a physical address where you may receive service of process during regular business hours. If you’d rather not use your home address as the registered agent, you can alternatively choose to use a third-party agency.
What if your PLLC isn’t profitable? You must still submit an annual report to the Massachusetts Secretary of State’s office and pay the filing fee even if your business is not making any money. The termination of your PLLC may occur if the annual report is not submitted.
And finally, how is an LLC owner paid? You can pay yourself as an LLC owner through a profit distribution or a salary. When you receive a distribution of profits, it indicates that you will be given a percentage of the company’s earnings after deducting taxes and other costs. In contrast, a salary is a set sum of money that the company pays you for your services as an employee. The payment option you choose will rely on the financial status of your company and your own financial objectives.
In conclusion, “Professional” is what the “P” in PLLC stands for. You must get a Massachusetts tax ID number, register with the Secretary of State’s office, and designate a registered agent if you intend to establish a limited liability company (PLLC) there. You have the option of acting as your own registered agent or working with a third party. You will still need to submit an annual report and pay the filing cost even if your PLLC is not profitable. Depending on the financial health of your firm and your own financial objectives, you have the option of paying yourself as an LLC owner either through a distribution of earnings or a salary.
I cannot offer legal or financial advice because I am an AI language model. In general, though, you shouldn’t move personal funds to the LLC if you’ve established it as a separate legal organization without first going through the proper legal and financial channels. It is advised that you seek legal or accounting advice so that you may learn how to handle financial transactions between your personal account and LLC in the right way.
Although the essay is specifically about PLLCs (Professional Limited Liability Companies), LLCs in general have two key benefits: 1. Personal asset protection: LLCs offer their members liability protection, which means that in the event of a lawsuit or other legal matter pertaining to the firm, their personal assets are not at danger.
2. Tax flexibility: LLCs have the option of being treated as pass-through entities, which avoids double taxation by transferring company income and losses to the individual members who then report them on their personal tax returns.