Oregon Professional LLC (PLLC) — Requirements for Licensed Professionals

Oregon allows licensed professionals to form Professional Limited Liability Companies (PLLCs) under the Oregon LLC Act (ORS Chapter 63). A Professional LLC provides the same liability protection and tax benefits as a standard LLC but adds requirements specific to regulated professions. All members must hold the relevant Oregon professional license. For formation, see our LLC formation guide. For all types, see our LLC types overview.

What Is a Professional LLC in Oregon?

A Professional LLC is an LLC formed specifically to render professional services that require a state-issued license. Under the Oregon LLC Act (ORS Chapter 63):

• All members must be licensed to perform the professional service in Oregon
• The LLC name must comply with professional naming rules (may require inclusion of profession or "Professional" designation depending on the licensing board)
• Professional liability is NOT eliminated — PLLC members remain personally liable for their own professional malpractice
• General business liability IS protected — a patient slipping in a doctor's waiting room wouldn't reach the doctor's personal assets through the LLC

Professions That May Require PLLC in Oregon

Oregon licensing boards govern which professions require a PLLC (vs. a standard LLC):

Important: Not all licensed professions REQUIRE a PLLC — some can use a standard LLC. Check with your specific licensing board before formation.

Formation Differences

The PLLC formation process is nearly identical to a standard LLC, with these additions:

Liability Protection — What's Different

PLLC does NOT protect you from:

• Your own professional malpractice or negligence
• Claims arising from your personal professional errors
• Disciplinary actions by your licensing board

PLLC DOES protect you from:

• The malpractice of other members/employees (you're not liable for a partner's errors)
• General business debts (lease obligations, vendor bills, loans)
• Slip-and-fall and general liability claims against the business
• The LLC's contractual obligations beyond your personal guarantees

Practical impact: In a two-partner medical practice PLLC, if Partner A commits malpractice, only Partner A's personal assets and the LLC's assets are at risk — Partner B's personal assets are protected. Without the PLLC structure, both partners could be personally liable in a general partnership.

Tax Treatment

Professional LLCs are taxed identically to standard LLCs:

• Pass-through taxation by default (no entity-level Oregon income tax)
• Members pay Oregon personal income tax (4.75%-9.9%) on their share
• S-corp election available — particularly valuable for high-earning professionals to reduce self-employment tax
• See our tax elections guide

Insurance Requirements

Most Oregon licensing boards require professionals to maintain malpractice/professional liability insurance regardless of entity structure. The PLLC structure supplements (but does not replace) insurance coverage.

Common Oregon requirements:

• Medical practitioners: Malpractice insurance required
• Attorneys: Not required by Oregon State Bar but strongly recommended (Oregon is one of few states without mandatory malpractice insurance for lawyers)
• Accountants: Professional liability insurance recommended
• Engineers/Architects: Often required by contract and licensing board rules

FAQ

Can a standard LLC provide professional services in Oregon?

It depends on the profession. Some licensing boards require a PLLC specifically; others allow a standard LLC. Contact your specific licensing board before formation. When in doubt, forming as a PLLC satisfies both possibilities.

Can a PLLC have employees who aren't licensed?

Yes. Non-licensed employees can work for the PLLC (receptionists, office managers, billing staff). However, all MEMBERS (owners) must be licensed in the relevant profession.

Can professionals from different fields form one PLLC?

Generally no. Oregon PLLCs typically must be limited to one category of professional service. A doctor and a lawyer cannot form a single PLLC together. Each would need their own entity.

How do I convert a sole proprietorship to a Professional LLC?

The process is: (1) verify your licensing board allows PLLC formation, (2) file Articles of Organization noting the professional purpose, (3) obtain any required board approvals, (4) transfer your practice assets and contracts to the PLLC. See our conversion guide.