Can I Convert an LLC into a PLLC in New York State?

There is a good chance that the reason you've made it to this article is because you formed a limited liability company (LLC) with the State of New York and you've now discovered that you were actually supposed to register as a professional service limited liability company (PLLC) and you want to know if there is a way to convert an LLC to a PLLC. Unfortunately, the answer is no. However, in this post we'll discuss why that is and what you actually need to do to bring your business into compliance.

NON-EXISTENCE OF LLC CONVERSION PROCESS IN NEW YORK STATE

In New York State, there is no current mechanism under the limited liability company laws to convert LLCs into PLLCs. While it's most likely a by-product of government inefficiency, we are stuck with a system that treats LLCs and PLLCs very differently. One likely reason being that PLLCs must be owned by licensed professionals who are heavily regulated by the State.

As discussed below, PLLCs are established partially via the New York Education Department (which is responsible for licensing professionals, such as accountants, nurse practitioners, mental health professionals, etc.). As it stands today, while most changes to business entities can be addressed via the NY Department of State, a conversion mechanism would require the NY Department of State to communicate with the NY Education Department and instead of figuring that part out, the State of New York has just declared that conversions are not possible. And collectively, business owners in New York let out a sigh of disappointment.

THE NEW YORK EDUCATION DEPARTMENT AND THE CERTIFICATE OF AUTHORITY PROCESS

In a previous post, we discussed the process of obtaining a Certificate of Authority from the New York State Education Department. In order to even be able to form a PLLC, you must first go through the Education Department. As a part of that process, the Education Department will confirm that the owners of the proposed PLLC are duly licensed professionals and if all paperwork is properly completed, they will issue the Certificate of Authority. At that point, you are then authorized to form the PLLC with the NY Department of State.

Since there is no conversion process in New York State, you should familiarize yourself with the NY Education Department as this will be the government agency handling the initial process of seeking to file a PLLC.

THINK DISSOLUTION, NOT CONVERSION

Now that you understand that there is no conversion process in New York State and that the NY Education Department is responsible for facilitating PLLC formations, it's important to turn our focus to that LLC you created that you now cannot convert.

In order to correct the situation and bring your business into compliance, you must first dissolve your existing LLC. Since this LLC was supposed to be a PLLC and there is no conversion process, you must get rid of this entity and essentially start over. Once you have dissolved your LLC, you can begin pursuing the PLLC by seeking a Certificate of Authority from the NY Education Department.

In conclusion, while you may have filed your company incorrectly, you now have a better understanding of the process and the steps required to move past this error and get your business headed in the right direction.

If you are interested in filing a PLLC with the State of New York, 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 to assess your situation and aid in setting up your professional service limited liability company. Our experienced business attorneys are here to provide the advice you need.

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.