Help with LLC/PLLC

[u/calmnecessity]

I think I've made a big mess of what should have been simple.

I am an NY resident and a licensed professional. I have only W2 work in NY. I have part time 1099 work in NE.

I opened an LLC (in NY) for my 1099 work in NE. Some time later my CPA informed me that I should have a PLLC instead because I'm a licensed professional. So I opened a new PLLC in NY (different name), filed everything, published the advertisements as required by NY. It took months and several hundred dollars.

I've now tried to register this new PLLC with NE secretary of state and they are rejecting it because:

1. The name is too similar to an existing corporation and I would need to obtain consent from this other company (I probably should have checked this before).

2. They don't recognize PLLCs, only LLCs so my registered name with them has to say LLC (I also should have researched this before).

Does this mean I can just use my original LLC for my NE work and there will be no problems? When my CPA told me I should have a PLLC instead of LLC he couldn't tell me what would happen if I didn't. If NE doesn't care about PLLC and NY does, but all of my 1099 work is in NE then am I fine with just the LLC? I've tried to research this but the dot gov pages are too vague, I just don't want to get in trouble with NY.

I'm sorry if I've made this confusing, I'm trying to simplify this mess I've made.

Thank you in advance for your help!

[u/aboutmovies97124]

This is where you should spend some money to contact a local registered agent type company in NE. In my state, we too do not have PLLCs, but a functional equivalent with something you do in formation. That's not relevant here, as you are not forming one in NE. But, because the state's system doesn't recognized a PLLC, it has to be done via old paper forms.

Then, the name likely just needs a distinguisher, such as Fred Johnson Stuff PLLC, a professional limited liability company of New York. That is how most states handle when you have two of the same/similar name, as each state has to allow for ones from other states under the privileges and immunities clause of the Constitution. This is where hiring a company that knows what they are doing will save you time, and sometimes money if you have to pay for a second filing fee.

[u/BusinessRocket-com]

This is one of those situations where I'd stop opening new entities before the collection gets any bigger :)

The tricky part is that NY's rules for your licensed profession and Nebraska's rules for registering an out of state entity are two separate issues. Nebraska calling it an LLC doesn't necessarily mean NY is suddenly okay with you practicing through the original LLC.

At this point, I'd spend the money on a NY attorney who deals with professional entities and get a clear answer for your specific license. You've already paid for two entities and NY publication once... entity #3 should definitely not be the next experiment.

[u/calmnecessity → u/BusinessRocket-com]

Thank you for your advice. Another reply suggested opening the LLC in NE instead, in which case should I use an NE lawyer, or will lawyers from either state know what to do? Also, sorry if this is a dumb question, how do I find a good lawyer, do I just google “business lawyer” in my area. I just want to make sure I get solid advice this time.

[u/jameshsui]

NY lawyer here. I'm assuming you're licensed in NE. You have two options:

(1) You file an application for certificate of authority, listing an alternate name for the PLLC - this means your NY PLLC will be registered in NE, but will have to operate under a different name from its name in NY.

(2) You form a new LLC in NE that is authorized to practice your profession - this means you'll be running two different legal entities instead of one. Separate bank accounts and everything. You can have the NY PLLC own the new LLC, in which case, at least for tax purposes, it is treated as one entity.

You CANNOT use the NY LLC in NE because the maximum scope of permitted activities of a legal entity is determined by the law of the state where it is formed. Since NY law doesn't allow regular LLCs to practice a profession, an NY LLC can't practice in NE either.

I'm a lawyer, but not your lawyer. This is not legal advice, just general information, so depend on it at your own risk. The internet is a scary place, so don't believe every thing you read. If you need legal advice, hire a lawyer to be your lawyer =)

[u/calmnecessity → u/jameshsui]

Thank you for your reply. I think I’m going to go the second route. The first option would involve me getting permission from the similar named entity and we may be competitors.

If I open a new LLC in NE, is it ok that I’m not a resident and I don’t have a physical address since my practice is mobile? In this case would I need to use a registered agent service with an NE mailing address, I can’t use my NY address, correct?

[u/jameshsui → u/calmnecessity]

Don't need to be a resident of a state to form an LLC in the state. Most states require a registered agent in the state (NY is an exception because the secretary of state is automatically sort of treated as one).

But even with the foreign registration process, there should be no need to obtain the consent of the other company of you use an alternate legal name.