PLLC vs. PC in New York: Which One is Right for My Private Practice?

If you're a licensed professional starting a private practice in New York, one of your first big decisions is choosing the right legal structure. The two most common options are the Professional Corporation (PC) and the Professional Limited Liability Company (PLLC). While there are certainly similarities between the two options, they differ in how they’re taxed, managed, and operated. This post will walk you through the most notable differences so you can decide which one fits your practice best.

Formation

Whether you’re forming a PLLC or a PC, your first step always starts with filing the appropriate paperwork with the New York State Education Department (NYSED), since they are the NYS agency responsible for verifying your professional licensure. While the fees are different for PCs vs PLLCs, you must file with the NYSED or your official corporate filings with the NYS Department of State (NYSDOS) will be rejected. Once you obtain the necessary approvals from the NYSED, you can move on to the NYSDOS.

For PLLCs, you’ll start by filing the Articles of Organization (under Section 1203 of the NY Limited Liability Law) for your practice. Once formed, you must publish notice of the PLLC’s formation in two local newspapers for six consecutive weeks and then file a Certificate of Publication with the NYSDOS to comply with New York’s publication requirement. In New York City, the newspapers are designated by the County Clerk’s Office, which means you must publish in the newspapers they tell you too.

A PC, on the other hand, is formed by filing a Certificate of Incorporation (under Article 15 of the New York Business Corporation Law). However, PCs are not subject to the publication requirement, which simplifies the formation process from that perspective.

Governance

Governance structures also differ greatly between the two entity types. A PLLC is governed by an Operating Agreement (a New York State requirement) that outlines how the business will be managed. This agreement can be as simple or detailed as you like, and there is no requirement to appoint a board of directors or officers unless you choose to do so. There are no mandatory record-keeping obligations beyond basic financial books, unless specified in your Operating Agreement.

In contrast, a PC must adopt formal bylaws after incorporation. You are also required to hold an initial organizational meeting to elect a board of directors and appoint corporate officers (president, treasurer, secretary, etc.) Also, PCs must maintain more formal records, including meeting minutes, a shareholder register, and corporate books. The statutory formalities for PCs require more administrative involvement from the owners.

Taxation

One of the biggest differences between a PC and a PLLC is how each entity is taxed. A PLLC is treated as a pass-through entity by default. That means the company itself doesn’t pay federal income tax; instead, profits and losses are reported directly on each member’s personal tax return. This structure helps avoid the double taxation that can come with a corporation. If it suits your tax planning goals, a PLLC can also elect to be taxed as a C-corporation or S-corporation.

In contrast, a PC is taxed as a C-corporation by default. This means the corporation pays tax on its income, and any distributions to shareholders (typically in the form of dividends) are taxed again on the shareholders’ personal returns. While it is possible for a PC to elect S-corporation status to reduce double taxation, New York State still imposes a separate franchise tax and treats S-corporation income differently than federal law does.

Annual Meetings and Corporate Actions

PLLCs are not required by law to hold annual or special member meetings. Instead, your Operating Agreement can set the rules for when meetings are held and what percentage of members must approve major decisions, such as adding a new member, amending the agreement, or dissolving the company. These actions can typically be taken through written consent or a vote, depending on the terms of your agreement.

By contrast, a PC must hold an annual shareholder meeting to elect directors and take care of other corporate governance matters. Major corporate actions—such as mergers, dissolutions, or amendments to the certificate of incorporation—require formal board and shareholder resolutions. These decisions must be documented in the corporation’s meeting minutes and follow the structure outlined in the bylaws.

Ownership Structure

In a PLLC, the owners are called members, and they hold membership interests or units in the company. All members must be licensed to practice the profession the PLLC is authorized to provide. Your Operating Agreement will generally control how ownership interests can be transferred, and it may require approval from other members before a transfer is allowed.

A PC uses a more traditional corporate structure, where owners are shareholders who hold shares of stock. Like PLLC members, all shareholders must hold the professional license required for the services provided. Transferring shares often requires board approval and may trigger additional legal or regulatory steps, including amended filings or written consents.

Liability and Professional Restrictions

Both PCs and PLLCs provide limited liability protection for their owners. That means you aren’t personally responsible for business debts or for the malpractice of your partners or colleagues. However, neither entity protects you from liability for your own professional misconduct or malpractice.

It’s also important to know that only PLLCs, PCs, and LLPs are permitted to offer licensed professional services in New York. You can’t use a general-purpose LLC or corporation to operate a licensed professional practice—doing so would violate state law. However, a major difference between PLLCs and PCs is that a PLLC is authorized to do anything that an LLC can do under NYS law, whereas a PC is limited to only providing professional services. What this looks like in practice is that in addition to providing professional services, a PLLC can offer non-professional services related to the profession, like coaching, trainings, educational offerings and the like.

Ongoing Compliance

For both PLLCs and PCs there are some ongoing requirements to maintain the status of your corporate entity. For both PLLCs and PCs, you must file a biennial statement with the NYSDOS every two years in the anniversary month of your entity’s formation. The current cost is $9. Depending on the professional nature of your practice, you may or may not have ongoing filing requirements with the NYSED. For example, if you are operating an engineering, geology or land surveying firm, you must file a Certificate of Authorization renewal with the NYSED every three years. The current cost is $75. If your practice covers any other profession, you do not need to file this renewal with the NYSED. Lastly, regardless of your profession, all PCs must file a triennial statement with the NYSED every three years. The current cost is $105.

Which Option Fits Your Practice?

Ultimately, a PLLC is a great option if you’re looking for straightforward tax treatment and flexible governance. It’s especially well‑suited for solo practitioners or small groups who prefer simplicity in structure and fewer formalities. On the other hand, if your practice plans to issue stock or requires a formal board structure, a PC may be the better fit. PCs are better aligned with organizations anticipating rapid growth, investment, or a need for more defined governance roles.

How We Can Help

At Carbone Law, we are experienced in assisting licensed professionals with setting up and maintaining their private practices. We can help assess your situation and guide you through any issues related to the formation and corporate maintenance of your practice. If you are interested in setting up a PLLC or PC or seeking advice on the overall process, please do not hesitate to give us a call at (212) 547-8857 or schedule a consultation online and we'd be happy to work with you. Our experienced business attorneys are here to provide the advice you need. Contact us today to help ensure that your practice is in compliance with New York law!

Disclaimer: This blog post and similar posts are not to be considered as providing legal advice. The discussion here is meant for educational and informational purposes only and shall not create an attorney-client relationship with the readers of this content.