Texas PLLC vs LLC for Licensed Professionals, The Honest 2026 Decision Guide
A Houston dentist with two associate dentists and a hygienist on payroll wants to leave her current group practice and open her own clinic. Her CPA tells her to form an LLC. Her practice attorney tells her she has to form a PLLC. Her practice management consultant says she should consider a regular LLC for the front desk and a separate PLLC for the clinical side. The setup costs and the recurring compliance fees are different for each, and one wrong choice means the Texas State Board of Dental Examiners can refuse to recognize the entity entirely.
This is the page that walks through who needs a Texas PLLC, who can use a regular Texas LLC, and the structure most Texas-licensed professionals end up with by year three.
The 60-second answer
If you are a Texas-licensed professional in a category that requires a license from a Texas regulatory board (physician, dentist, attorney, CPA, engineer, architect, optometrist, chiropractor, veterinarian, social worker, psychologist, nurse practitioner in independent practice, and others), the entity that holds your professional practice must be a PLLC under Tex. Bus. Orgs. Code § 152.802 et seq. and the related professional entity provisions, not a standard LLC.
If you do non-clinical or non-licensed work alongside the practice (real estate holdings, equipment leasing, marketing services, consulting outside your license), those activities can sit in a separate standard Texas LLC.
The mature structure for most Texas-licensed professionals is a two-entity setup: a PLLC for the licensed activity, and a standard LLC for everything else, often with the PLLC paying the standard LLC for office services, equipment leasing, or administrative support.
What the Texas Business Organizations Code actually requires
Texas codified the professional entity rules in the Business Organizations Code. The PLLC provisions sit in Chapter 304 of the BOC, with the cross-reference at Tex. Bus. Orgs. Code § 152.802 for partnerships and the LLC professional provisions in Chapter 304 generally.
The statute requires three things:
- All members must be licensed in the same profession. A PLLC for the practice of dentistry can only have dentists as members. A non-dentist spouse cannot be a member, even with a 1% ownership stake. (BOC § 304.001 and related professional entity provisions.)
- The entity name must include "Professional Limited Liability Company," "PLLC," or "P.L.L.C." The Texas Secretary of State will reject the formation if the entity name does not include the proper designator. "ABC Dental, LLC" is invalid for a dental practice; "ABC Dental, PLLC" is required.
- Approval from the regulatory board may be required before filing. Some professional boards (such as the Texas Medical Board for physician PLLCs) require board sign-off on the entity name and structure before the Secretary of State will accept the filing. The board's process can add 4 to 8 weeks to the formation timeline.
A standard Texas LLC has none of these constraints. Members can be any person or entity, the name needs only to include "LLC" or "L.L.C.," and no regulatory board sign-off is required.
The 14 Texas-licensed professions that require a PLLC
Texas regulatory boards govern what entity types can hold a professional license. The categories that generally require a PLLC for the practice of the profession (rather than a standard LLC) include:
- Physicians (MD, DO), Texas Medical Board
- Dentists (DDS, DMD), Texas State Board of Dental Examiners
- Attorneys, State Bar of Texas (PLLC, but PLLC for law practice has additional restrictions)
- CPAs, Texas State Board of Public Accountancy
- Engineers (PE), Texas Board of Professional Engineers and Land Surveyors
- Architects, Texas Board of Architectural Examiners
- Veterinarians, Texas State Board of Veterinary Medical Examiners
- Optometrists, Texas Optometry Board
- Chiropractors, Texas Board of Chiropractic Examiners
- Psychologists, Texas State Board of Examiners of Psychologists
- Social workers (LCSW, LMSW), Texas State Board of Social Worker Examiners
- Marriage and family therapists, Texas State Board of Examiners of Marriage and Family Therapists
- Nurse practitioners and certain advanced practice nurses (in independent practice contexts), Texas Board of Nursing
- Pharmacists (in some practice settings), Texas State Board of Pharmacy
Other licensed roles (real estate brokers, insurance producers, certain therapists in non-independent practice) can typically operate through standard LLCs because the license sits with the individual rather than the entity. Always check with the specific Texas regulatory board for the current entity-form requirements before filing.
Why this matters: liability protection and the licensure shield
Garrett Sutton, a Wyoming and Nevada corporate attorney with decades of practice in professional entity structuring, has written and spoken extensively on the difference between the PLLC liability shield and the standard LLC liability shield.
"The PLLC shields the owners from the business liabilities of the practice, but it does not shield a licensed professional from claims for their own personal malpractice. That is what malpractice insurance is for. The PLLC is a co-equal partner with the malpractice carrier, not a substitute." Source: Garrett Sutton, Sutton Law Center. (https://suttonlaw.com)
The practical implications:
- Inside-out protection (PLLC and LLC both have this): if the practice's employee makes a mistake, the practice's lease is breached, or the practice incurs a contract debt, the owners' personal assets are shielded.
- Outside-in protection (PLLC and LLC both have this): if the owner has a personal lawsuit (car accident, divorce, personal guarantee), the creditor's remedy is generally limited to a charging order against the owner's interest under Tex. Bus. Orgs. Code § 101.112.
- Personal malpractice (NEITHER shields): if a dentist personally commits malpractice, the dentist is personally liable for that malpractice claim regardless of whether the practice is a PLLC or LLC. This is the licensed-professional carve-out and is universally recognized in U.S. professional entity law.
The takeaway: do not pick a PLLC because you think it gives you malpractice protection. It does not. Pick the PLLC because it is what the regulatory board requires and because it gives you the same business-liability shield as a standard LLC.
The two-entity structure most Texas professionals end up with by year three
A typical mature setup for a Texas dental, medical, or legal practice with revenue over about $750K per year:
| Entity | Function | Members | Regulatory Status |
|---|---|---|---|
| Practice PLLC (e.g., "Smith Family Dental, PLLC") | Holds the dental license, employs clinical staff, bills patients, carries malpractice insurance | Licensed dentist(s) only | PLLC, board-approved name |
| Operations LLC (e.g., "Smith Family Holdings, LLC") | Owns the office building or holds the lease, owns equipment, employs front-desk and admin staff, holds intellectual property | Practice owners (not limited to licensed dentists) | Standard Texas LLC |
The Practice PLLC pays the Operations LLC for rent, equipment leasing, and administrative services on arms-length terms. This creates a clean accounting separation, isolates the high-malpractice-risk activity from the high-asset activity, and gives the practice owner the option to bring in non-dentist family members or co-investors as members of the Operations LLC without violating the PLLC member-restriction rule.
The trade-offs:
- Two annual filings with the Texas Comptroller (franchise tax) instead of one
- Two registered agent appointments
- Two operating agreements
- Two sets of books
For a practice generating real revenue, the marginal cost of the second entity is small relative to the structural benefits. For a solo dentist with $250K in annual revenue and no employees, the simpler single-PLLC setup may be all that is needed.
Texas franchise tax considerations for PLLCs and LLCs
Texas charges a franchise tax on entities operating in Texas. Both PLLCs and standard LLCs are subject to it. The 2026 no-tax-due threshold is $2.47 million in total revenue (raised from the prior $1.23 million threshold). Below the threshold, the entity files a No Tax Due report. Above it, the franchise tax applies.
The PLLC and the standard LLC are taxed identically at the entity level. The choice of PLLC vs LLC does not change the franchise tax outcome. What changes the outcome is whether you elect S corporation status for federal tax purposes (Form 2553), which allows the practice owner to take a portion of profits as distributions rather than self-employment-taxable salary. The S corporation election applies equally to PLLCs and LLCs that meet the IRS eligibility rules.
Frequently Asked Questions
Can I form a regular LLC for my Texas dental practice instead of a PLLC?
No. The Texas State Board of Dental Examiners requires the practice entity to be a PLLC. The Secretary of State will accept a "Smith Family Dental, LLC" filing because the SOS does not enforce the dental board rules at filing time, but the dental board can refuse to recognize the entity as a valid practice entity, and the dentist could face board disciplinary action for practicing through an unauthorized entity.
My spouse is not a licensed professional. Can my spouse own an interest in my Texas PLLC?
Generally no. Tex. Bus. Orgs. Code Chapter 304 requires all members of a professional entity to be licensed in the same profession. A non-licensed spouse cannot be a member of the PLLC. The spouse can hold a beneficial interest indirectly (for example, as a community property interest under Texas family law), but cannot appear as a member on the formation documents.
Does a Texas PLLC protect me from a malpractice lawsuit?
No. The PLLC, like any professional entity in any U.S. state, does not shield a licensed professional from claims arising from their own personal malpractice. Malpractice insurance is the protection. The PLLC shields the owners from business liabilities of the practice (lease defaults, employee claims, contract disputes), not from personal malpractice.
What does a Texas PLLC cost to form and maintain in 2026?
Can I convert my existing Texas LLC into a PLLC?
Yes. Texas allows entity conversion under the BOC. The process involves filing a certificate of conversion with the Secretary of State, amending the operating agreement, obtaining any required regulatory board approval for the new PLLC name, and updating tax registrations. The conversion is generally tax-free for federal purposes when done correctly.
Your next 24 hours
If you are a Texas-licensed professional and your practice currently runs through a standard LLC (or worse, through your personal name), the next call is to your malpractice carrier and your CPA. Confirm the regulatory board's current entity-form requirement, and confirm that your malpractice policy is in place and adequately funded for your specialty.
If you are forming a new practice in 2026, the structural question to bring to a Texas-licensed business attorney is whether you start with a single PLLC or go straight to the two-entity PLLC + Operations LLC structure based on your projected revenue and complexity.
We file Texas PLLCs with the Texas Secretary of State, serve as your Texas registered agent, and provide a PLLC operating agreement template designed around the regulatory board requirements and the franchise tax compliance calendar. Texas registered agent service is $99 per year, included with every formation, with no extra charge for the operating agreement template, the Public Information Report calendar reminder, or the franchise tax filing reminders.
Independent Curator Disclosure: Texas LLC Service is an independent compliance and capital dashboard service. We are not affiliated with, endorsed by, or sponsored by Garrett Sutton or Sutton Law Center. We have researched and synthesized publicly available content from Mr. Sutton and other professional entity practitioners to inform this educational piece. References to named attorneys do not imply any endorsement, sponsorship, or affiliation. Consult licensed counsel in your jurisdiction before acting on any guidance here.
Service, not law firm: Texas LLC Service is a document preparation and registered agent service. We are not a law firm, CPA firm, or financial advisor. The information on this page is educational only and does not create an attorney-client or advisor-client relationship. Texas statutes, regulatory board rules, and case law change. Verify current requirements with the relevant Texas regulatory board and a licensed Texas attorney before acting.