IDFPR-PROFESSIONAL LIMITED LIABILITY CORPORATIONS
Clarification Regarding IDFPR’s Application of the Professional Limited Liability Corporation Act
This regulatory bulletin provides information on the Illinois Department of Financial and Professional Regulation’s application of the Professional Limited Liability Corporation Act.
• New licensure applications submitted to the Illinois Department of Professional Regulation to become Limited Liability Corporations (LLCs) (providing professional services) will be returned to the applicant stating that the entity must become a Professional Limited Liability Corporation (PPLC) versus an LLC.
• The Professional Limited Liability Act (805 ILCS 105/104.05) exempts pre-existing LLCs from being required to convert to a PLLC but allows them to convert voluntarily.
In 2018, the Illinois General Assembly passed, and the Governor signed into law, Public Act 100-0894
. The legislation amended various provisions of the Professional Limited Liability Company Act by clarifying provisions for those LLCs that provide professional services and requires registration by the Illinois Department of Professional Regulation. The legislative intent of the amendments is as follows: It is the intent of the General Assembly to provide for an individual or group of individuals to form a professional limited liability company to render the same professional service or related professional services to the public for which such individuals or individuals providing the professional services are required by law to be licensed, while preserving the established professional aspects of the personal relationship between the professional person and those he or she serves professionally.
The definition of a PLLC is as follows:
"Professional Limited Liability Company" means a limited liability company that provides professional services licensed by the Department of Financial and Professional Regulation and that is organized under the Professional Limited Liability Company Act and this Act.
The Illinois CPA Society Government Relations Office has received several inquiries regarding the application of PLLC and IDFPR’s application of the law. There have also been open-source articles that IDFPR was “cracking down” on LLCs who provide professional services. In our conversations with IDFPR, this is not the case. These statutory requirements went into effect on August 14, 2018. Section 13 of the Act includes exceptions to the PLLC formation primarily relating to medical, social work and real estate.