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Part II: Tips for Licensed Professionals Operating Business Entities

Greater Seattle and Eastside Business Law
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Part II: Tips for Licensed Professionals Operating Business Entities

In part two of our four-part blog series, we discuss the various business entities available for use by licensed professionals. In case you missed Part I on the development of Washington law governing licensed professionals and business entities, you can access it here.

Permissible Corporate Entities Available to Learned Professionals

Although Washington courts have long prohibited licensed professionals from forming traditional business entities, the Washington Legislature has a nearly equally long history of using specific statutory allowances to permit the practice, subject to certain restrictions.

Over time, the Washington Legislature has created several new entity forms that learned professionals may choose from. Additionally, the legislature has also granted explicit permission to learned professionals to form certain existing entity types, as is the case with non-profit organizations and limited liability partnerships — subject to certain special rules.

The below chart is a brief overview of the permissible business entities available to learned professionals.

Type of Entity Professional Equivalent RCW
Corporation Professional Service Corporation (PS) Ch. 18.100
Limited Liability Company Professional Limited Liability Company (PLLC) 25.15.046
Limited Liability Partnership Same name, but subject to special rules 25.05.510
Not for profit organization Same name, but subject to special rules 18.100.050(4)

 

It is worth noting that nothing prevents a learned professional from operating as what is known as a ‘sole proprietorship,’ which is not a corporate entity at all and, instead, is an unincorporated business with one owner.

In our next blog, we’ll explore the special rules applicable to licensed professionals operating as a business.

Have questions regarding entity formation? Contact one of our Kirkland business law attorneys.

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