How to Form a Professional Limited Liability Company (PLLC) in Tennessee: A Guide for Licensed Professionals

Introduction to Tennessee PLLCs

If you are a licensed professional working in Nashville, Memphis, or Knoxville, starting your own practice is an exciting milestone. However, standard LLCs are not always appropriate or legal for specific licensed professions. Tennessee requires doctors, accountants, therapists, and other licensed experts to form a Professional Limited Liability Company (PLLC). This specialized business structure protects your personal assets (like your home and savings) from the business's general debts, while ensuring that only qualified individuals own the practice.

Forming a PLLC requires navigating strict rules set by both the state government and your specific professional licensing board. A single paperwork error can delay your business launch by weeks. Because the regulatory landscape is complex, it is often a good idea to consult with a local business lawyer from our directory of US Attorneys. Below is a step-by-step guide on how to successfully establish your PLLC in Tennessee.

Step-by-Step Process to Forming a PLLC

Under Tenn. Code Ann. § 48-249-1101 (the Tennessee Revised Limited Liability Company Act), forming a PLLC involves specific prerequisites that standard businesses do not face. The most critical rule is that every member (owner) of the PLLC must be licensed to practice the profession that the business provides.

Step 1: Filing Articles and Licensing Board Delivery

In Tennessee, forming a PLLC begins by filing Form SS-4270, Tennessee, Secretary of State, Articles of Organization Limited Liability Company directly with the Tennessee Secretary of State, Nashville, which can be completed online through the TNCaB portal. Under Tenn. Code Ann. § 48-249-1127, your company may not render professional services until it delivers a certified copy of its filed articles to each licensing authority governing the profession. All members must hold an active license in good standing.

Step 2: Rules for Medical Doctors & Clinics

If you are opening a medical clinic or private practice, the state has rigid ownership rules. Under Tennessee law, medical doctors (MDs) and osteopathic doctors (DOs) can form a PLLC together. However, you generally cannot co-own a medical PLLC with an unlicensed business investor. Following state registration, a certified copy of your articles must be delivered to the Tennessee Board of Medical Examiners, Nashville before treating patients. Providing unauthorized medical services through an improperly formed entity can result in severe disciplinary actions against your medical license.

Step 3: Guidelines for Dentists

Dental professionals looking to start their own practice must follow similar strict ownership rules. A dental PLLC can only be owned by actively licensed dentists. Once registered with the state, you must deliver your certified articles to the Tennessee Board of Dentistry, Nashville before practicing. The name of your PLLC must also comply with the Board's advertising rules, meaning you cannot use a trade name that implies superiority or misleads the public about the services offered.

Step 4: Mental Health Therapists and Counselors

For Licensed Professional Counselors (LPCs), Licensed Clinical Social Workers (LCSWs), and psychologists, forming a PLLC shields your personal assets from slip-and-fall accidents at your clinic or general business debts (like a broken commercial lease). However, a PLLC does not protect you from your own personal malpractice. Certified articles of organization must be provided to regulatory bodies like the Tennessee Board for Professional Counselors, Nashville before offering clinical services.

Step 5: CPA Firms

Certified Public Accountants have unique requirements. A CPA firm operating as a PLLC must ensure that a simple majority of the ownership (both in terms of financial interests and voting rights) belongs to licensed CPAs. Your application and business name must be approved by the Tennessee State Board of Accountancy, Nashville. The board ensures that your firm meets peer review requirements and adheres to strict professional ethics standards.

Step 6: Chiropractors

Chiropractors face frequent malpractice threats, making the limited liability protection of a PLLC essential. A certified copy of your filed articles must be delivered to the Tennessee Board of Chiropractic Examiners, Nashville. In some cases, Tennessee allows allied health professionals to co-own a PLLC (for example, a medical doctor and a chiropractor), but you must verify with both respective boards to ensure cross-profession ownership is currently permitted for your specific practice model.

How Much Does it Cost in Tennessee?

Tennessee has a unique fee structure for filing LLC and PLLC documents.

• State Filing Fees: The Secretary of State charges $50 per member to file the Articles of Organization. The minimum fee is $300 (even if you are a single-member PLLC), and the maximum fee is capped at $3,000.
• Board Review Fees: Your specific licensing board may charge an administrative fee to review your paperwork, typically ranging from $25 to $100.
• Annual Report Fees: You must file an annual report every year, which also costs $50 per member (minimum $300, maximum $3,000).
• Lawyer Fees: Having a business attorney draft your Articles of Organization and customized Operating Agreement generally costs between $800 and $2,000, depending on the complexity of your partnership.

How Long Does the Process Take?

Filing your Articles of Organization online through the Tennessee Secretary of State's TNCaB portal is quick, typically processed within 1 to 3 business days. Once the state issues your certificate of formation, you must obtain certified copies and deliver them to your licensing board pursuant to state law before providing services. Completing your operating agreement, obtaining an EIN, and finishing regulatory notifications generally takes about 1 to 2 weeks in total.

Frequently Asked Questions (FAQ)