Licensed professionals must generally use a professional entity, such as a Professional LLC (PLLC), rather than a traditional LLC. If you've created a traditional Texas LLC but now realize a PLLC is necessary, continue reading to learn how to make the switch.

In this article, we will outline the differences between an LLC and a PLLC, the reasons why you would be required to use a PLLC, and how to convert from one to the other.

A Professional LLC (PLLC) is a specific type of LLC required for certain licensed professionals. A PLLC is not typically used unless required by law. In general, a PLLC can only be owned by licensed individuals or another professional entity(ies).

Generally, an individual who holds a Texas license (i.e., doctor, lawyer, architect, CPA, etc.) is required to use a PLLC rather than an LLC. Each licensing agency, however, can override this general rule. You can see which licensed professionals must use a professional entity here.

To convert a Texas LLC to a PLLC, you must:

1. authorize the change;
2. insert the required PLLC language into the LLC's Certificate of Formation;
3. update the LLC's operating agreement (recommended, but optional); and
4. give notice to the IRS (if applicable).

You do not need to obtain a new EIN when converting an LLC to a PLLC. The IRS views this conversion as a minor name change, so you simply need to inform them of the updated name.

The cost to convert a Texas LLC to a PLLC is equal to the filing fee of the Certificate of Amendment ($150) plus the service fee if you have someone handle it for you. We charge $350 ($200 + the $150 filing fee) to convert an LLC to a PLLC. This flat fee includes the preparation of the authorizing resolutions, preparation and filing of the Certificate of Amendment, and the preparation of the notice to the IRS.