Certain professions are required to organize as a professional limited liability company (“PLLC”) if they wish to render their professional services in Michigan. Michigan defines these professional services as “services in a learned profession.” These professions are attorneys, physicians or any kind, clergy people and dentists. If these professions want to render their professional services as a limited liability company, they must organize as a PLLC. The PLLC must not engage in any other business other than those professional services for which it was formed.
A PLLC offers the same protection as a limited liability company, namely that its members are not personal liable for the acts, obligations or debts of the PLLC. But, the members or the PLLC are subject to additional requirements. Namely, the members are subject to malpractice claims, and may be personally liable for the members own malpractice, or any malpractice committed by those directly under the control of the member.
The Limited Liability Company Act covering PLLCS- Article 9- defines a professional service as “a type of personal service to the public that requires as a condition precedent to the rendering of the service the obtaining of a license or other legal authorization. Professional service includes, but is not limited to, services rendered by a certified or other public accountant, chiropractor, dentist, optometrist, veterinarian, osteopathic physician, physician, surgeon, podiatrist, chiropodist, physician’s assistant, architect, professional engineer, land surveyor, or attorney-at-law.” It further defines a licensed person is “an individual who is licensed or otherwise legally authorized to practice a professional service by a court, department, board, commission, or an agency of this state or another jurisdiction, any corporation or professional services corporation all of whose shareholders are licensed persons, any partnership all of whose partners are licensed persons, or any limited liability company all of whose members and managers are licensed persons.” Certain other professions- those not providing services in a learned profession (dentists, doctors, clergy or attorneys) may form a PLLC, but are not required to do so. Those in the learned professions must form a PLLC if they wish to operate as a limited liability company.