Can You Change An LLC To A PLLC? 4 Steps to Convert From An LLC to a Professional LLC in Texas

Who Can Convert an LLC to a PLLC?

Only those individuals or entities that hold professional licenses issued by an appropriate regulatory agency can switch from an LLC to a PLLC. The LLC may employ individuals who don’t hold the license, such as administrators and support staff, but they cannot be members, or the LLC can’t convert to a PLLC. The Texas PLLC statute does allow certain combinations of “joint practices” between licensed professions; for more on qualifications and joint practices, see who can form a PLLC.

Not sure your profession requires a PLLC? Start with LLC vs. PLLC in Texas.

This is an amendment, not a conversion filing

The Secretary of State has a Certificate of Conversion (Form 645) for changing one type of entity into another, such as when an LLC becomes a Corporation. An LLC becoming a PLLC does not use a Conversion process: a PLLC is a kind of LLC, so the change is made by amending the certificate you already have. Now, interestingly, when I had a client switching from a Corporation to a Professional Corporation (P.C.), the Secretary of State classified that as a Conversion requiring the proper Conversion Forms and Processes.

How to Convert an LLC to a PLLC: 4 Steps

Step 1: Confirm You Qualify

Every member must hold the license for the professional service the PLLC will provide. If anyone doesn’t, they’ll need to leave the membership before the change, or the LLC stays an LLC. Importantly, you’ll need to consider whether your professional practice is able to remain an LLC or MUST switch to a PLLC.

Step 2: Approve the Change Under Your Company Agreement

Follow the guidelines in your company’s Operating Agreement for making a change to the name and overall purpose of the LLC: how many votes it takes, how the meeting has to be announced, and so on. Often, especially for the Operating Agreements that I draft for clients, a meeting can be skipped if the Company is authorized to make the decision through a Corporate Resolution that can be circulated among the Members. And yes, as always, even with one member, write it down.

Step 3: File a Certificate of Amendment With the Secretary of State

For the Secretary of State, changing from an LLC to a PLLC is essentially a change of name. File Form 424, the Certificate of Amendment, changing the company’s name to a PLLC and completing the “Purpose” section with the professional service you’ll now provide. The “Purpose” is the one most folks will miss and have to resubmit after being rejected. Your new PLLC will have a very limited purpose as opposed to your previous structure. The state filing fee in Texas for an Amendment of any kind is $150.

Step 4: Amend Your Operating Agreement

Now that the company is a PLLC, amend your Operating Agreement to reflect the change. Depending on your profession and the number of members, that may mean amendments to different parts of the agreement, and the amendment process itself is whatever your agreement says it is. The Operating Agreement is the contract between you and your company, so don’t let yourself end up in breach of it.

The biggest change to your Operating Agreement after becoming a PLLC should be admission standards for Membership (licensure and joint practice authorizations), processes for dealing with Members that subsequent to joining may lose or have their license revoked, and certain restrictions on practice supervision and officers held by certain professions. For example, when I draft Agreements for Physician/Physician Assistant Joint Practices, PAs have certain restrictions regarding positions they can hold in the Company as well as Membership Percentage caps.

Updates After Your Conversion/Amendment

Company Name, Everywhere

Signage, letterhead, your website, invoices and contracts should all use the new PLLC name. It is the same entity; you’re just updating the name.

Bank accounts and your EIN

You’ll need to bring your approved Amendment to your Bank in order to have them approve the name change on your accounts. Your EIN stays the same; the business has not changed, just the name.

Your licensing board and insurer

Some licensing boards require notice of the entity change; requirements vary by profession. Also tell your professional liability insurer so the named insured matches.

Can You Change a PLLC Back to an LLC?

Yes, you can convert a PLLC back to an LLC. It’s the same process in reverse: you would file your Certificate of Amendment with a new name and a non-professional purpose.

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