Massachusetts PLLC and Professional Corporations: Rules for Licensed Professionals

Licensed professionals in Massachusetts face a unique set of requirements when forming a business entity. Two structures stand out: the Professional Limited Liability Company (PLLC) and the Professional Corporation (PC). Both exist specifically to serve regulated professions like law, medicine, accounting, and engineering. This guide breaks down what each structure requires, who can use it, and how to form one in Massachusetts.

What Is a Massachusetts PLLC?

A Professional Limited Liability Company (PLLC) is a limited liability company formed under Massachusetts General Law Chapter 156C. It operates like a standard LLC but is restricted to professionals in licensed fields. Members of a PLLC receive liability protection similar to corporate shareholders: they are not personally liable for the debts and obligations of the entity or the negligence of other members.

However, liability protection has limits in a PLLC. Massachusetts law does not protect a member from personal liability for that member's own professional negligence or misconduct. This is a critical distinction. If you commit malpractice, your LLC membership shield does not protect your personal assets from that claim. You remain liable for your own actions.

The PLLC is taxed as a pass-through entity by default, meaning income passes through to members who report it on their individual tax returns. Members pay Massachusetts personal income tax on their share of profits. An PLLC can elect corporate taxation if it chooses, in which case it pays the 8.0 percent corporate excise tax on net income, plus $2.60 per $1,000 of tangible property or net worth, with a minimum excise of $456.

What Is a Massachusetts Professional Corporation?

A Professional Corporation (PC) is a corporation formed under Massachusetts General Law Chapter 156D, restricted to licensed professionals. Professional Corporations were the original structure for professionals before PLLCs became available. A PC operates much like a regular C corporation but with professional-specific rules and restrictions.

Shareholders of a Professional Corporation receive liability protection from corporate debts and the negligence of other shareholders. Like PLLCs, Professional Corporations do not protect shareholders from liability for their own professional negligence or misconduct. A PC is subject to the same personal income tax and corporate tax rules as any other Massachusetts corporation.

Professional Corporations are less commonly used now because PLLCs offer the same liability protection with more operational flexibility. However, they remain a valid choice if your practice prefers the corporate structure.

Which Professions Can Use a PLLC or Professional Corporation?

Massachusetts law explicitly permits PLLCs and Professional Corporations for these regulated professions:

• Attorneys at law
• Physicians and surgeons
• Dentists
• Optometrists
• Chiropractors
• Podiatrists
• Physical therapists
• Professional engineers
• Land surveyors
• Architects
• Certified public accountants
• Licensed clinical social workers
• Psychologists
• Veterinarians

If you practice in one of these fields and hold the required Massachusetts license, you can form a PLLC or Professional Corporation. If your profession is not on this list, you cannot use either structure. You would instead form a standard LLC or corporation and must ensure your business practices comply with your professional licensing board's rules on entity formation and ownership.

Formation Requirements for a Massachusetts PLLC

Name Requirements

Your PLLC name must include the words "Limited Liability Company" or "Limited Company," or the abbreviation L.L.C., L.C., LLC, or LC. The name must not be the same as or deceptively similar to any other corporation, limited partnership, or LLC already on file with the Massachusetts Secretary of the Commonwealth unless you submit written consent from that entity.

A name reservation at the Secretary of the Commonwealth costs $30 and is valid for 60 days, extendable one time for another 60 days on written request. Use the Massachusetts Secretary of the Commonwealth business search at https://corp.sec.state.ma.us/CorpWeb/CorpSearch/CorpSearch.aspx to verify your desired name is available before filing.

Resident Agent Requirement

Every PLLC must maintain a resident agent for service of process. The resident agent must be either an individual who resides in Massachusetts, a domestic Massachusetts corporation, or a foreign corporation authorized to do business in Massachusetts. The resident agent must consent to the appointment, and that consent must be included with or attached to your Certificate of Organization filed with the state.

Your PLLC must maintain an office in Massachusetts where records required by Massachusetts law are kept. This can be your professional office or a separate registered agent service location.

Professional Licensure Requirement

At least one member of a PLLC must be a licensed professional in the field the PLLC will practice. If the PLLC provides services in multiple professional fields, at least one member must be licensed in each field. Only licensed professionals can own membership interests in a PLLC formed for that profession. An accountant cannot be a member of a law PLLC, for example.

Certificate of Organization and Filing

To form a PLLC, file a Certificate of Organization with the Massachusetts Secretary of the Commonwealth. The certificate must include:

• The name of the PLLC
• The address of the PLLC office in Massachusetts
• The name and address of the resident agent
• The name and address of each member
• The date the PLLC is to commence business
• A statement that the PLLC is being formed to render professional services
• The professional field(s) the PLLC will practice

The filing fee for a PLLC Certificate of Organization is $520. File online through the Corporations Online Filing System at https://corp.sec.state.ma.us/corpweb/loginsystem/login_form.aspx. Electronic filing includes a $20 expedite charge, meaning your total online cost is $540. The Corporations Division processes documents 8:45 a.m. to 4:00 p.m., Monday through Friday. The Division does not publish a standard turnaround time, but electronic and fax filings are handled ahead of mail and walk-in filings.

Formation Requirements for a Massachusetts Professional Corporation

A Professional Corporation follows similar formation steps to a PLLC, with these key differences:

• The name must end with "Professional Corporation," "P.C.," or "P.A." (for professional association)
• All shareholders must be licensed professionals in the field the corporation practices
• The corporation must have a registered agent and registered office in Massachusetts (same requirement as LLCs)
• File Articles of Organization under Massachusetts General Law Chapter 156D
• The filing fee is $265, with a $10 expedite fee for electronic filing ($275 total online)

Otherwise, the formation process mirrors the PLLC process. File with the Secretary of the Commonwealth, ensure all shareholders hold active professional licenses, and maintain a Massachusetts office and registered agent.

Ongoing Compliance and Annual Requirements

Both PLLCs and Professional Corporations must comply with ongoing Massachusetts requirements:

Annual Report

A PLLC must file an annual report with the Secretary of the Commonwealth on or before the anniversary date of organization each year. The annual report fee is $500 by mail, or $500 plus a $20 expedite fee if filed electronically or by fax. This is your largest recurring state cost.

A Professional Corporation must file an annual report that must arrive (not be postmarked) within two and one half months after the end of the corporation's fiscal year. The fee is $125 by mail, or $100 plus a $10 expedite fee filed electronically.

Registered Agent Maintenance

You must maintain your registered agent and Massachusetts office throughout the life of the entity. If you change your registered agent or office address, file a notice with the Secretary of the Commonwealth. The fee is $25 by mail and free if filed electronically.

Member and Shareholder Changes

If members (PLLCs) or shareholders (Professional Corporations) join or leave, you must file an amended Certificate of Organization or Articles of Organization with the Secretary of the Commonwealth. Confirm with your professional licensing board that changes to ownership are permitted and reported to the board as required.

Tax Obligations for PLLCs and Professional Corporations

Massachusetts Income Tax

If your PLLC elects pass-through taxation (the default for most PLLCs), the entity does not pay income tax. Instead, each member reports their share of PLLC income on their individual Massachusetts tax return and pays the personal income tax rate of 5.00 percent, plus an additional 4 percent surtax on the portion of annual taxable income above $1,000,000 (the threshold adjusts annually for cost of living).

A Professional Corporation pays the corporate excise tax: 8.0 percent of net income taxable in Massachusetts, plus $2.60 per $1,000 of tangible property or net worth, with a minimum excise of $456. Shareholders then pay personal income tax on any distributions or salary they receive.

If your PLLC elects corporate taxation, it pays the same corporate excise as a Professional Corporation.

Sales and Use Tax

If your PLLC or Professional Corporation sells taxable goods or services, you must register with the Massachusetts Department of Revenue for sales and use tax at https://mtc.dor.state.ma.us/mtc/_/. Massachusetts sales tax is 6.25 percent. Professional services are generally exempt from sales tax, but any tangible goods your practice sells are taxable. Confirm with the Department of Revenue whether your specific services are subject to sales tax.

Federal Tax ID (EIN)

Apply for a Federal Employer Identification Number (EIN) from the IRS, even if your PLLC or Professional Corporation has no employees. You will need the EIN to open a business bank account, file tax returns, and handle payroll if you have employees. Apply online at the IRS website (irs.gov). There is no fee for an EIN, and you receive it immediately upon application.

PLLC vs. Professional Corporation: Key Differences

Feature	PLLC	Professional Corporation
Formation cost	$540 (online)	$275 (online)
Annual report cost	$520	$110
Ownership structure	Members	Shareholders
Default taxation	Pass-through	Corporate
Member/shareholder ownership	Licensed professionals only	Licensed professionals only
Liability for own negligence	Personal liability	Personal liability
Liability for others' negligence	Protected	Protected
Operational flexibility	More flexible	More traditional corporate rules

Which Structure Should You Choose?

For most Massachusetts licensed professionals, a PLLC is the better choice. It offers the same liability protection as a Professional Corporation but with greater operational flexibility, easier pass-through taxation, and a simpler management structure. If you plan to add members over time, an PLLC makes that transition smoother. If you prefer traditional corporate governance and corporate taxation, a Professional Corporation remains a valid option.

Consider your practice size and growth plans. A solo professional can use either structure. A multi-member practice benefits from the PLLC's flexibility in allocating profits, managing member decisions, and handling membership changes.

Your professional licensing board may have specific guidance on which structure is preferred for your field. Attorneys, accountants, and physicians sometimes have board rules that favor one structure over the other. Confirm these requirements before filing.

Important Disclaimer

This guide is informational only and is not legal or tax advice. Professional licensing rules, liability protection, and tax treatment vary by profession and individual circumstances. Before forming a PLLC or Professional Corporation, consult a Massachusetts attorney who practices business formation and a CPA or tax professional familiar with professional practices. Your attorney can review your specific situation, ensure compliance with your professional licensing board's rules, and address liability and insurance concerns. Your tax professional can advise on the best tax structure for your practice and handle your ongoing tax obligations.

Resources

• Massachusetts Secretary of the Commonwealth, Corporations Division: https://www.sec.state.ma.us/divisions/corporations/corporations.htm
• Business Name Search: https://corp.sec.state.ma.us/CorpWeb/CorpSearch/CorpSearch.aspx
• Online Filing Portal: https://corp.sec.state.ma.us/corpweb/loginsystem/login_form.aspx
• Massachusetts Department of Revenue: https://www.mass.gov/orgs/massachusetts-department-of-revenue
• Massachusetts Small Business Development Center: https://www.msbdc.org/
• U.S. SBA Massachusetts District: https://www.sba.gov/district/massachusetts