May I form a Professional LLC in California?

No. Unfortunately, you cannot.

Section 17002 of the Beverly-Killea LLC Act (Corp Code Sections 17000-17666 or “LLC Statute”) states that subject to any limitations contained in the articles of organization and to compliance with any other applicable laws, a limited liability company (“LLC”) may engage in any lawful business activity, whether or not for profit, except the banking business, the business of issuing policies of insurance and assuming insurance risks, or the trust company business. However, one of the express limitations is found within California Corporations Code, sec. 17375, which states that an LLC may not render professional services, as defined in sections 13401(a) and 13401.3 (the “Moscone-Knox Professional Corp Act”). Rather, those professionals may only operate as solo practitioners, partnerships, or professional corporations.

As defined in this part, “professional services” includes any type of professional services that may be lawfully rendered only pursuant to a license, certification, or registration authorized by the Business and Professions Code, the Chiropractic Act, or the Osteopathic Act. 13401.3. “Professional services” also includes any type of professional services that may be lawfully rendered only pursuant to a license, certification, or registration authorized by the Yacht and Ship Brokers Act (Article 2 (commencing with Section700) of Chapter 5 of Division 3 of the Harbors and Navigation Code). Furthermore, a 2004 Attorney General opinion letter defines “professional service” for purposes of this law. This opinion letter states that a profession is distinguished by its extensive educational and training requirements and the passing of a rigorous state administered examination. This 2004 Opinion states that even if a business requires a license, certification, or registration pursuant to the Business and Professions Code, it may still conduct its activities as a LLC company if the services rendered require “only a non-professional occupational license.”

To actually determine whether a particular service is “one or the other” requires an examination of the educational, training, and testing prerequisites. But, if your business is required to be licensed, certified or registered, before attempting to form the professional business as an LLC (i.e. filing Form LLC-1 with the California Secretary of State’s office), it is recommended that you contact your licensing authority to determine whether your services are, in fact, considered professional. That being said, here is a list of professions that have been determined to already meet the professional threshold:

  1. Accountant
  2. Acupuncturist
  3. Architects
  4. Attorneys
  5. Audiologists
  6. Clinical Social Workers
  7. Chiropractors
  8. Court Reporters
  9. Doctors
  10. Dentists
  11. Engineers
  12. General Contractors
  13. Marriage and Family Therapists
  14. Nurses
  15. Optometrists
  16. Pharmacists
  17. Psychologists
  18. Physical Therapists
  19. Physician Assistant
  20. Real Estate Brokers
  21. Securities Brokers
  22. Speech Pathologists
  23. Veterinarians

So, if you are operating a professional LLC in one of these professions in the state of California, you may want to give an attorney a call.