What Happened to My PLLC/LLC?
The COVID-19 crisis has upended routines in the public and private sectors. What, then, should you expect if you were in the process of forming a business entity to launch a new practice?
It’s the new refrain: we’re living through unprecedented times. In order to curtail the spread of the novel coronavirus, offices everywhere—including those in state governments—are closing their doors, furloughing workers, and distributing functions across remote locations. So if you were ramping up to start a new healthcare practice or business by forming a professional limited liability company (PLLC), limited liability company (LLC) professional corporation (PC), service corporation (SC), or other business entity, you’re facing added uncertainties. Here, we update you on what we’ve learned about some of the states in which we practice. Plus, we discuss what you can do to maintain forward momentum on your startup.
The Filing Process, State by State
- The Illinois Secretary of State announced that the office will largely be closed through March 31, 2020.
- While its media release mentions that some activities can be done online, such as filing for incorporation, it’s important to remember that:
- Most professional entities —PLLCs, PCs, and SCs—can’t be filed online and must be filed by mail. We don’t yet know how the processing of new filings will be impacted.
- There’s not yet clarity regarding how already-mailed PLLC filings will be handled.
- Annual reports can still be filed online, and we will continue to file annual reports on behalf of clients for whom we act as a registered agent. We will communicate with clients about how their filings may be impacted.
- Jackson LLP’s office buildings are closed and our staff is working remotely. For those clients whom we serve as the registered agent, we’ll work diligently to ensure that we retrieve any delivered/available mail regularly.
- We haven’t been able to secure guidance from the IDFPR regarding the status of their offices.
- Professional entities—PLLCs and PCs—must be filed by mail and cannot be submitted online.
- Non-professional entities filed online and professional entities filed by mail should expect significant delays. From the New York State Education Department’s website comes this update:
All non-essential State employees for New York State’s agencies and public authorities, including the State Education Department, will not be reporting to work for the next two weeks, beginning March 17, 2020. To our customers: This emergency will significantly impact normal business activities and services provided by the New York State Education Department. Please expect delays in services, wait times, and responses. We appreciate your patience.
- While wait times may be longer with staff working remotely or furloughed, the actual filing process is less impacted in Michigan than in many other states.
- “Effective on Monday, March 16, 2020, the Corporations, Securities & Commercial Licensing Bureau will be closed to public visitors and walk-in customers until further notice.”
- All entities (PLLCs, LLCs, PCs, Cs) can be filed online, according to this state publication.
- Professional entities need to be filed by mail and cannot be submitted online.
- For non-professional entities that can be filed online, delays are expected. The State’s Department of Financial Institutions (DFI) website mentions: “Need to file paperwork with DFI? Please utilize DFI’s online filing resources and be patient. Response times may be impacted due to telework arrangements.”
What can be done in the meantime?
Our attorneys can help you keep the process moving forward as you wait. We can:
- Draft the articles of organization or articles of incorporation and prepare them for filing when State offices reopen—or we can even mail them for filing before State offices reopen and get them into the queue
- Prepare HIPAA policies and procedures, your new patient registration packet, your fraud/waste/abuse compliance policy, and your telemedicine consent forms
- Review and advise you on your liability insurance policy. Does it cover what you think it covers?
Remember: You don’t need a corporate entity to practice your profession. PLLCs, PCs, and other types of corporate entities are tools for limiting liability, so long as you maintain corporate formalities (separate bank accounts, signing contracts in the name of your business, and operating under your actual business name—including the “PLLC” or “PC” part). Your professional license allows you to practice, though, assuming you’re following other requirements (HIPAA, informed consent, etc), so this doesn’t need to put your business plans on hold.
Also, if you’re establishing a management service organization (MSO) or non-professional entity (LLC, corporation), we may be able to file your paperwork electronically. We still do expect delays, but the actual filing process can likely be accomplished at this time.
Please remember that most licensed professionals (whether a single individual venturing into private practice or a group of partners opening a medical practice, physical therapy clinic, etc.) cannot simply establish an LLC rather than a PLLC for convenience’s sake. They’re not allowed to practice in this type of arrangement. Attempting to use a “workaround” will only slow things down in the long-term and require more legal work to remedy the error.
We get that it’s frustrating, and we’ll keep you updated as we navigate these uncharted waters. In the meantime, reach out to us for our support and legal guidance.
The COVID-19 pandemic is a dynamic and evolving public health emergency. The laws and situation are fluid, and this article may not reflect the most current situation.
Our website does not constitute legal advice, and it does not create an attorney-client relationship between us.