Trying to Start an LLC… and Being Told You Might Need a “Professional Entity”? Here’s What That Actually Means
If you’ve ever tried to start a business as a licensed professional—physician, therapist, dietitian, attorney, CPA—you may have experienced a moment like this:
You finally decide to make it official.
You file your LLC online.
You feel proud, accomplished, adult.
And then you get an email that sounds… ominous.
“Upon further review of your entity name and business purpose, it looks like you may have the option to file as a professional entity in your state… ZenBusiness does not currently support professional entities.”
Refund issued. Momentum halted. Confusion activated.
If you’re thinking, “Wait—what is a professional entity and why is no one explaining this in plain English?”—you’re not alone.
Let’s slow this down and walk through what’s actually going on.
First: You Didn’t Do Anything Wrong
This is important to say upfront.
You didn’t mess up.
You didn’t “file incorrectly.”
You didn’t miss some obvious step everyone else magically knows.
What happened is very common for licensed professionals, especially physicians, because online LLC services often don’t clearly explain the difference between a regular LLC and a professional entity—or they don’t support professional entities at all.
This isn’t a you problem. It’s a system clarity problem.
What Is a “Professional Entity,” Really?
In many states, licensed professionals are not allowed to form a standard LLC for services that require a professional license.
Instead, states require a Professional Entity, which may be called:
PLLC – Professional Limited Liability Company
PC – Professional Corporation
PA – Professional Association
The name varies by state, but the concept is the same.
👉 A professional entity is a business structure designed specifically for licensed professionals who provide regulated services (like medical care).
The goal isn’t to make your life harder—it’s to ensure:
The business is owned by licensed professionals
The professional is still personally responsible for clinical care
The licensing board can maintain oversight
Why Online LLC Companies Flag This
Companies like ZenBusiness, LegalZoom, etc. use automated filters that look at:
Your business name (e.g., “Medical,” “Health,” “Wellness,” “Physician,” “Clinic”)
Your stated business purpose
Your state’s professional regulations
When those trigger certain rules, the system flags your filing and says:
“You may need a professional entity.”
The key word here is may.
They are not saying:
You definitely filed incorrectly
You are in trouble
Your business can’t exist
They are saying:
“This is outside what our system supports. Please confirm your state’s requirements.”
Because many filing services do not handle PLLCs or PCs, they issue a refund rather than risk filing the wrong structure.
The Big Misunderstanding: “Professional” ≠ “More Complicated”
Many people hear professional entity and think:
More expensive
More legal risk
More hoops
More paperwork forever
In reality?
A PLLC functions almost identically to an LLC in day-to-day life.
Same things:
Pass-through taxation (in most cases)
Operating agreement
EIN
Business bank account
Ability to hire contractors or employees
The main difference is:
Ownership is restricted to licensed professionals
Your license is tied to the entity
You remain personally responsible for clinical decisions
Which, frankly, is already true regardless of entity type.
Why This Happens So Often to Physicians
Physicians are especially likely to hit this wall because many of us form businesses for things like:
Coaching
Education
Consulting
Speaking
Online programs
Wellness platforms
And here’s where it gets tricky:
Some of those activities do not require a medical license.
So the question becomes:
Is this business providing medical services, or is it providing non-clinical services run by a physician?
That distinction matters—a lot.
Two Common Scenarios (And Why This Gets Confusing)
Scenario 1: You Are Providing Medical Care
Examples:
Direct patient care
Medical weight loss
Prescribing
Diagnosis or treatment
👉 In many states, this must be done under a professional entity (PLLC/PC).
Scenario 2: You Are a Physician Running a Non-Clinical Business
Examples:
Coaching
Education
Courses
Content creation
Consulting (non-medical advice)
👉 In some states, this can be a regular LLC—as long as the business is clearly not providing medical services.
The problem?
Online filing platforms can’t assess nuance.
They see “Dr.” or “medical” and flag it automatically.
Why the Company Told You to “Check With Your Licensing Board”
This part feels intimidating, but it’s actually practical advice.
Licensing boards:
Define what counts as professional practice
Determine which entity types are allowed
Protect the public—not punish entrepreneurs
Many boards can answer this with:
A short email
A phone call
Or guidance already published on their website
You’re not expected to have this memorized.
What This Means Practically (Without Giving Legal Advice)
At a high level, here’s the thought process you’ll eventually walk through—likely with a professional:
What services is this business actually providing?
Does my state require those services to be offered through a professional entity?
If so, which type (PLLC, PC, PA)?
If not, how do I clearly separate clinical and non-clinical work?
That’s it. That’s the “mystery.”
No secret handshake. No failure on your part.
The Emotional Side No One Talks About
For high-achieving professionals, this moment can feel disproportionately destabilizing.
You finally:
Took action
Invested money
Moved from idea → execution
And then suddenly:
Everything feels uncertain again
You wonder if you misunderstood the basics
You lose momentum
That emotional whiplash is real—and unnecessary.
The truth is:
This is a normal clarification step, not a setback.
The Bottom Line
If an LLC filing service told you that you might need a professional entity, here’s what that actually means:
You’re likely a licensed professional
Your business name or purpose triggered a regulatory flag
The platform doesn’t support professional entities
You need clarity—not correction
A professional entity is not a punishment.
It’s not inherently harder.
It’s not a sign you did something wrong.
It’s simply the structure some states require when licensed professionals build businesses.
Once you understand that, the fear dissolves—and the path forward becomes much clearer.
Final Thought
Starting a business as a physician or licensed professional comes with extra layers, but also extra opportunity.
You are not behind.
You are not late.
You are not failing at entrepreneurship.
You’re just learning the rules that no one bothered to explain in plain language.
And now—you’re better equipped to move forward with confidence.