Yes, you may convert your Texas LLC to a Texas PLLC if you qualify for a Professional Limited Liability Company.
Converting your LLC to a Texas PLLC may be done for a number of reasons, but the truth of the matter is that it doesn’t necessarily matter what your reasons are. For a discussion of the differences between PLLC vs LLC in Texas, Click Here. The purpose of forming a PLLC in Texas remains the same, essentially, as converting to one: maintaining the protections provided to owners of a PLLC. To learn more about those benefits, and more in general about PLLC malpractice protection, Click Here. If you are ready to form your PLLC, there are Four Easy Steps to convert an LLC to a PLLC in Texas.
1. Determine if you qualify for a Professional Limited Liability Company
Do you meet the Texas PLLC statute requirements for being a PLLC? You must offer a service that requires a state-issued license to do so, AND there must be no members of the LLC that are not qualified to render that service. The LLC may employ individuals that do not possess the license, such as administrators and support staff, but they cannot be members of the LLC or you may not convert to a PLLC. There are also different combinations of “joint practices” that may be established by owners of a Texas PLLC, per again, the Texas PLLC Statute. For more on qualifications for PLLC owners and joint practices, check out this article by Attorney Nate Gilbert.
2. Create your company resolution to effect the change
As an LLC, you must follow the guidelines set out in your company’s Operating Agreement on making a change in the name of the LLC. The steps to creating a change will be listed in your Operating Agreement such as, how many votes it takes to effect a change, how a meeting where those votes will take place must be announced, etc. It should be noted that even if you are a Single Member LLC, you must absolutely create these kinds of business records–Business records for LLCs are a chief concern in maintaining the liability protection that an LLC or PLLC provides. Once you have determined the steps necessary to create the change, you may create the LLC Corporate Resolution to effectuate the name change and file with the other company documents.
3. File the required paperwork with the Secretary of State of Texas
Changing the business from an LLC to a PLLC is, for all intents and purposes with the Secretary of State, merely a change in the name of the business. To register a change of name with the Secretary of State, you must file Form 424- Certificate of Amendment, stating the change in name of the LLC to a PLLC. You will also need to fill in the “Purpose” section of the Certificate of Amendment and provide the State with the Professional Service that you will now be providing. What is the new purpose of the Texas PLLC? What services will you be providing under the name of your company? It is critical to remember that a PLLC is not the same as an LLC in Texas in regard to the “purpose,” as PLLCs have a very limited scope of purpose.
4. Make the necessary changes in your PLLC Operating Agreement
Now that the company has become a PLLC, you will need to amend your Operating Agreement to reflect this change. Depending on the type of service you are offering and the number of members of the PLLC, this may mean different amendments to different parts of your Operating Agreement. Amending your Operating Agreement will again be a process determined by the structure of your Operating Agreement. Remember, the OA is the contract between you and your company, so don’t let yourself become in breach of that contract.
Converting to a PLLC in Texas is a relatively straightforward process, but you may save some time and energy by working with an attorney who understands the complexities and nuances of the requirements. San Antonio LLC Attorney Nathaniel Gilbert works with business owners in a variety of ways and can help manage your LLC or PLLC in an efficient manner. If you would like to learn more about LLCs and PLLCs in Texas, Click Here. To contact Nate directly, Click Here.