PLLC Therapist Meaning: Why Registering as a PLLC in Washington State is Crucial for Private Practice Therapists

Welcome to the world of private practice therapy in Washington State!

As you embark on this exciting journey, there's a critical decision that can make all the difference in your professional life: registering as a PLLC (Professional Limited Liability Company) instead of an LLC (Limited Liability Company). In this blog post, we'll unravel the meaning behind being a PLLC therapist and why it's a game-changer for therapists in the beautiful state of Washington. So, grab a cup of tea, get cozy, and let's dive right in!

Get ready to explore the following topics:

• Understanding the PLLC versus LLC

• Why private practice therapists need a PLLC rather than an LLC in Washington State

• Applying for a PLLC

• How to Switch to a PLLC if you're registered as an LLC

Understanding the PLLC versus LLC

Before we explore the reasons for choosing a PLLC, let's distinguish between PLLCs and LLCs. In Washington State, therapists and other licensed professionals have the option to form either a PLLC or an LLC for their private practice. Here are some key differences between the two:

Purpose

A PLLC is specifically designed for licensed professionals, including mental health therapists, doctors, lawyers, and accountants, who must adhere to specific regulations and licensing requirements. In contrast, an LLC is a more general business structure suitable for various types of businesses.

Regulatory Compliance

Washington State, like many other states, may mandate licensed professionals to establish a PLLC instead of an LLC. This requirement ensures compliance with specific regulations governing their profession, reflecting the professional nature of their services and meeting licensing board requirements.

Name Requirement

When forming a PLLC, Washington State typically necessitates including the words "Professional Limited Liability Company" or an appropriate abbreviation, such as "PLLC," in the business name. This naming requirement distinguishes the PLLC as a professional entity, emphasizing the specialized services offered. Conversely, LLCs have more flexibility in naming conventions.

Ownership Restrictions

Some states, including Washington, may impose limitations on who can own or be a member of a PLLC. For example, only licensed professionals within the same or related fields may be eligible for ownership. LLCs, on the other hand, generally have fewer ownership restrictions and can be owned by individuals, other entities, or a combination thereof.

Why private practice therapists need a PLLC rather than an LLC in Washington State

Now that we grasp the distinctions between PLLCs and LLCs, let's explore why therapists in Washington State should consider a PLLC for their private practice:

 Liability Protection

By forming a PLLC, therapists can safeguard their personal assets from potential claims or debts incurred by the business. If a client were to file a lawsuit against the therapist or their practice, the therapist's personal assets, such as their home or personal savings, would generally be shielded.

Professional Compliance

Washington State requires certain licensed professionals, including therapists, to establish a business entity such as a PLLC to practice their profession. Complying with state regulations and licensing requirements is crucial to ensure a legitimate and authorized practice.

Business Structure

Creating a PLLC allows therapists to establish a formal business structure for their practice. This brings benefits such as enhanced credibility, clear separation between personal and business finances, and streamlined management of practice operations.

Tax Considerations

Opting for a PLLC can offer certain tax advantages for therapists. As a separate legal entity, the PLLC enables therapists to leverage tax deductions and benefits related to business expenses, healthcare expenses, retirement plans, and more.

Regulatory Compliance

Washington State, like other states, requires certain licensed professionals, such as mental health therapists, to form a PLLC instead of an LLC. Choosing a PLLC is essential to fulfill the legal obligations set forth by the state and maintain compliance with specific regulations and licensing requirements.

Professional Perception

The use of a PLLC can enhance the professional perception of a mental health therapist's practice. By explicitly identifying the business entity as a "professional" limited liability company, it conveys a higher level of expertise, credibility, and specialization in the field of mental health.

Professional Restrictions

Depending on state regulations, there may be certain restrictions or limitations on the ownership and management of a professional practice. A PLLC provides greater flexibility and compliance with these requirements, as it is specifically designed for professionals in regulated fields like mental health.

Applying for a PLLC

Are you in the exciting phase of launching your private practice as a therapist in Washington State? Congratulations on taking this big step! As you embark on this journey, it's important to become a PLLC. If you're applying for the first time. You can choose this option when you submit the completed formation documents to the Washington Secretary of State. 

How to Switch to a PLLC if you're registered as an LLC

If you initially registered your private practice as an LLC but now realize the advantages of operating as a PLLC, don't worry! It is possible to make the switch. Here are the steps to follow:

Mailing Option:

a. Access the WA Secretary of State Certificate of Amendment form for changing an LLC to a PLLC here: https://www.sos.wa.gov/_assets/corps/forms/llc/amended-certificate-of-formation---washington-limited-liability-company.pdf

b. Select "yes" for "Business Type " to indicate a change in business type to a "WA Professional Limited Liability Company."

c. Select "yes" for "Entity Name" to indicate a change in the entity name.

d. Select "no" under "do you already have an entity name reserved?" and leave the "Reservation Number" blank.

e. Enter the name of your business with "PLLC" under "Name."

f. Sign the form at the bottom.

Online Option:

a. Visit the WA Secretary of State website (https://ccfs.sos.wa.gov) and choose "Business Amendment" from the left side.

b. Search for your business name.

c. Complete the form as follows:

Select "yes" for "Business Type" to indicate a change in business type to a "WA Professional Limited Liability Company."

Select "yes" for "Entity Name" to indicate a change in the entity name.

Select "no" under "do you already have an entity name reserved?" and leave the "Reservation Number" blank.

Enter the name of your business with "PLLC" under "Name."

d. Sign the form.

Conclusion

It's important to note that the information provided in this blog post represents personal views and not legal guidance. I am not a legal professional. If you're considering forming a PLLC as a therapist in Washington State or have specific legal questions, it's advisable to consult with an attorney who specializes in business and healthcare law. They can provide you with tailored advice based on your individual circumstances and the current legal requirements in the state.

In conclusion, registering as a PLLC rather than an LLC is crucial for private practice therapists in Washington State. By forming a PLLC, therapists can benefit from liability protection, professional compliance, a formal business structure, tax advantages, regulatory compliance, enhanced professional perception, and flexibility in adhering to professional restrictions. However, it is essential to consult with an attorney specializing in business and healthcare law to navigate the process and ensure compliance with Washington State regulations.

Get MORE Therapist Skills!

Did you find this post useful? Get MORE Therapist Skills straight to your inbox!

Be the first to get notified of tips and tools for therapists. FREE!

Disclaimers:

The content provided is not intended to be therapy, medical, accounting, or legal advice. The information shared is for general informational purposes only and should not be used as a substitute for professional medical or mental health advice. It is always recommended to seek the advice of a qualified provider with any questions you may have.  

I’m a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon. As an affiliate marketer, I may earn a commission on any purchases you make through the links provided on this website. Please note that I only promote products and services that I believe in. Please also note that I cannot guarantee the accuracy of any information provided by the affiliate program. It is always recommended that you do your own research before making any purchase decisions.