Converting a Texas LLC into a PLLC

Q: Am I able to modify my LLC to a PLLC? I’m unable to utilize my healthcare company in Texas unless it’s a PLLC.

Thanks to a client in Texas for this great question! Yes, you can convert your LLC into a PLLC in Texas by filing a Certificate of Amendment to change the name and purpose of your LLC. You’ll also need to update your operating agreement to reflect these changes. Here, we’ll go over the process of converting your Texas LLC into a PLLC.

How to Convert a Texas LLC into a PLLC

Converting your Texas LLC into a PLLC is a reasonably straightforward process.

Step 1: Adopt a Resolution to Change Entity type

The first step to converting your LLC into a Texas PLLC is to approve the change internally. You’ll need to gather all the members of your LLC together to adopt a resolution to change your entity type. As part of your resolution, you may include provisions for changing your business name, purpose, or other alterations to your operating agreement related to your entity change.

Step 2: File a Certificate of Amendment

To make your conversation official with the state of Texas, you must submit Form 424: Certificate of Amendment to the Secretary of State, which costs $150.

You’ll need to amend the following:

• Your business name—Instead of including an entity identifier like “LLC,” you’ll need to use an identifier specific to professional limited liability companies, like “PLLC.”
• Your business purpose—For this, you’ll need to alter Article 4 of your Certificate of Formation so that it identifies the type of professional service your PLLC will offer. Your purpose as a PLLC must be specific to your profession.

If you are uncomfortable making these changes yourself, you may hire a business lawyer to take care of this paperwork for you.

Step 3: Make Any Additional Updates

You may need to make additional changes to your operating agreement so that it more accurately reflects how your business will be governed as a PLLC, especially if your business structure will change at all (for example, if you take on additional members). You’ll also need to update your business name with your bank and other organizations you conduct business with. You may even need to change your name on marketing materials.

Why Change to a Texas PLLC

In Texas, certain professional services can only be offered by professional business entities. For example, while flight instructors and insurance adjusters can offer their services through a regular LLC, equine dentists and licensed family therapists must offer theirs through a PLLC. Professions in a few fields, like massage therapy, are able to operate using either an LLC or PLLC.

Generally, the following professions require the use of a professional business entity:

• Medical practitioners
• Mental health professionals
• Veterinarians

Working in the healthcare industry, the client who asked this question is in a profession where operating through a regular LLC is not legally possible.

To find out if you need a PLLC in Texas, refer to the Texas Secretary of State’s Guide for Determining Permissible Entity Types for Licensed Professionals.