Form 206 – Certificate of Formation – Professional Limited Liability Company

Jurisdiction: Country: United States | Province/State: Texas

What is a Form 206 – Certificate of Formation – Professional Limited Liability Company?

Form 206 creates a Texas professional limited liability company. It is the official formation document you file with the state to bring a PLLC into legal existence. Without this filing, your professional practice is not a Texas PLLC. You cannot rely on PLLC liability protections or use “PLLC” in your name until the state accepts this form.

You use this form when your business will render professional services that require a state license. Common examples include health, legal, engineering, accounting, and other licensed fields. Texas limits ownership and control of a PLLC to people or entities authorized to provide the same professional service. The PLLC can employ other licensed professionals and support staff, but owners and managers must meet the licensing rules for the profession your company will provide.

Law firm partners, medical group founders, solo professionals, and multi-owner licensed practices use Form 206. You might be transitioning from a sole proprietorship to limit business liability. You might be breaking away from a larger practice to form your own professional group. You might be adding partners and want a limited liability structure that aligns with professional rules. In each case, Form 206 is the starting point.

You need this form if you want the benefits of a Texas PLLC. Those benefits include limited liability for business debts and a flexible management structure. Your personal assets are generally protected from the company’s contractual debts and obligations. Note that a PLLC does not protect you from your own professional malpractice. You remain responsible for your professional conduct. The PLLC shields you from the business liabilities of the firm and from the acts of others, with narrow exceptions under Texas law.

Typical usage scenarios

You are a licensed professional planning to launch a practice with one or more licensed partners. You want to use a name with “PLLC,” open a practice bank account, sign a lease, and hire staff. Vendors and landlords require proof of formation. Banks ask for filed formation documents and EIN. Form 206 gives you the legal entity documents to move forward. Another scenario: your existing LLC offers general consulting, but you plan to add a licensed service. You would form a new PLLC for the professional service to keep ownership and regulation compliant.

The form asks you to name your PLLC, describe the professional service, appoint a registered agent, set the management structure, list the initial governing persons, and name the organizer who signs the filing. You can also include extra provisions. You can start immediately upon filing or choose a delayed effective date. Once the state files it, your PLLC exists.

When Would You Use a Form 206 – Certificate of Formation – Professional Limited Liability Company?

Use Form 206 when you are forming a new Texas professional practice that requires a license to operate. If you are a solo professional moving from a sole proprietorship to a PLLC, you file Form 206. If you and other licensed professionals will co-own a firm and share profits, you file Form 206. If your professional rules require a PLLC or similar professional entity for practice ownership, you file Form 206 to comply.

You would not use this form for a general LLC that does not provide licensed services. That scenario uses a different formation. You also would not use it to register a professional entity formed in another state. That is a foreign registration, which uses a different filing. Use Form 206 only when the entity will be a Texas domestic PLLC.

You might file Form 206 before you sign a lease. Many landlords will not negotiate with an individual. They want an entity on the lease. You can file Form 206, obtain a filed-stamped copy, and then enter into contracts as a PLLC. You might also file before applying for certain permits or insurance. Carriers and agencies often require a formed entity and an EIN.

You may also use this form when reorganizing an existing professional practice. For example, a group that previously operated as a partnership may convert to a PLLC structure. If you are starting fresh rather than formally converting, you would form the PLLC with Form 206, then transfer assets and operations into the new entity.

Use Form 206 when the owners and managers will be licensed for the same professional service that the company provides. That is a core feature of professional entities. If you intend to add non-licensed investors with ownership or control, a PLLC may not be allowed. Confirm that all owners and managers meet the professional rules before filing.

Legal Characteristics of the Form 206 – Certificate of Formation – Professional Limited Liability Company

Form 206 is legally binding because it creates a new legal entity under Texas law. Once filed by the state, your PLLC exists as a separate person in the eyes of the law. It can own property, enter into contracts, sue and be sued, and pay taxes in its own name. The filing memorializes the company’s core facts. Those include its legal name, professional purpose, registered agent, and governing structure.

Enforceability comes from state acceptance of the filing and your ongoing compliance. The state reviews key elements for compliance, such as name, registered agent details, and entity type. When the state endorses the filing, it adds the PLLC to the public records. Third parties rely on those records. That public record supports the enforceability of contracts you sign on behalf of the PLLC.

The PLLC structure offers limited liability for business obligations. That includes leases, vendor contracts, and general debts. This limited liability does not shield you from your own malpractice. Professional liability remains personal to the licensed individual who performed or supervised the service. The PLLC also does not protect you from your own fraud or willful misconduct. Keep malpractice insurance in place. Treat the PLLC as a distinct entity. Open a dedicated bank account. Keep separate records. Sign contracts in the company’s name with your title. Observe these basics to preserve the liability shield.

A Texas PLLC can be member-managed or manager-managed. In a member-managed PLLC, owners run daily operations. In a manager-managed PLLC, one or more managers run the business. Managers may be owners or not, as long as the profession’s rules allow it. With a PLLC, governing persons must be licensed to provide the professional service. Check that all named governing persons meet licensing requirements. The state can reject filings that do not align with professional rules.

A registered agent and registered office are required. The registered office must be a physical Texas address. A P.O. Box is not acceptable as the registered office. The agent receives official mail and legal process. They must consent to serve. You do not have to attach a separate consent form to your filing, but you must obtain consent. You must also maintain it in your records.

The PLLC’s name must be distinguishable on state records. It must include “Professional Limited Liability Company,” “P.L.L.C.,” or “PLLC.” Using “LLC” alone is not correct for a Texas PLLC. Avoid words that imply an unauthorized activity. If your profession has naming rules, follow them. Filing does not grant you the right to practice without the required licenses. You must secure and maintain your professional licenses before rendering services.

After formation, the PLLC will have annual obligations. These include franchise tax filings and public information reporting. You must keep the registered agent current and in good standing with the state. If you change the agent or registered office, you must file an update. Failure to maintain compliance can lead to penalties or forfeiture of the entity.

How to Fill Out a Form 206 – Certificate of Formation – Professional Limited Liability Company

Follow these steps to complete the form correctly the first time. Have your professional license details, ownership plan, and management structure ready. Confirm that all owners and managers meet licensing rules before you begin.

1) Name of the PLLC

• Enter your exact legal name. It must include “Professional Limited Liability Company,” “P.L.L.C.,” or “PLLC.”
• Check that the name is distinguishable from other entities on file. If the name is too close to an existing name, the state will reject your filing.
• Avoid restricted words unless your profession authorizes them. Do not use “LLC” by itself for a professional entity.
• If you plan to use a brand name in marketing, note that trade names are separate. Your legal entity name still must meet PLLC naming rules.

2) Professional Purpose

• State the specific professional service the PLLC will render. Keep it clear and specific, such as “the practice of [your profession].”
• Do not use broad catch-all language. Professional entities are limited to the licensed service.
• Confirm that every owner and governing person is licensed or otherwise permitted to own or manage a professional entity for this service.
• If your profession permits closely related services, you may include them if allowed. When in doubt, limit to the primary licensed service.

3) Registered Agent and Registered Office

• Choose one: a registered agent who is an individual Texas resident, or a company authorized to act as a commercial registered agent.
• Enter the agent’s name. Then enter the registered office address. This must be a physical street address in Texas where the agent is available during business hours.
• Do not list a P.O. Box as the registered office. A P.O. Box may be added as a mailing address if the form provides that field.
• Confirm the agent has consented to serve. You should keep evidence of consent in your company records.

4) Management Structure: Member-Managed or Manager-Managed

• Select “member-managed” if all members will manage daily operations. This suits smaller groups or solo practices.
• Select “manager-managed” if one or more managers will run day-to-day operations. This suits larger groups or practices with passive owners.
• Ensure that managers meet professional licensing rules. In a PLLC, governing persons must be licensed for the professional service, unless a specific rule allows another setup.

5) Governing Persons: Names and Addresses

• If member-managed, list each initial member who will govern. If manager-managed, list each initial manager.
• Provide full legal names and mailing addresses. Use a reliable mailing address that can receive state correspondence.
• If you have more names than the form allows, add an attached schedule. Title it “Schedule A – Governing Persons.” Reference the PLLC name at the top of each page.

6) Supplemental Provisions/Information

• Use this section to add clauses required by your profession’s rules. Examples include ownership restrictions, transfer limits, or compliance statements.
• You can also include indemnification clauses for governing persons if you want them in the public record. Most internal governance terms belong in your company agreement. Keep this section short and focused.
• If you have many provisions, attach a separate page titled “Supplemental Provisions – Form 206” and label pages consecutively.

7) Organizer Information and Signature

• The organizer prepares and signs the form. The organizer can be you, another member, or a third party. The organizer does not have to be an owner.
• Provide the organizer’s name and address as requested.
• The organizer must sign. If filing on paper, use ink and a clear signature. If filing online, follow the electronic signature prompts.
• You can list more than one organizer, but only one is required.

8) Effectiveness of Filing

• Choose “when filed” if you want the PLLC to start immediately when the state accepts the form.
• Choose a delayed effective date if you want the PLLC to start later. The date you select must be within 90 days of filing.
• You can also select a delayed effectiveness tied to the occurrence of a stated event within 90 days. If you choose this, describe the event concisely. Do not pick an event that is vague or outside your control.
• Use “when filed” if you are ready to operate now. Use a delayed date if you need time to align licenses, leases, or insurance.

9) Company Agreements and Internal Documents (not filed with the form)

• Draft a company agreement that sets ownership, voting, profits, losses, and transfer rules. For a PLLC, restrict ownership to those who may legally own a professional entity.
• Include procedures for admitting new members, handling departures, and redeeming interests. Align with your profession’s rules.
• Keep copies of licenses and agent consent in your records. Banks and carriers may ask to review them.

10) Attachments and Schedules

• If you need more space for governing persons, attach “Schedule A – Governing Persons” with full names and addresses.
• If you add detailed provisions, attach “Schedule B – Supplemental Provisions.” Keep them consistent with the form.
• If a licensing rule requires a specific statement, place it in Supplemental Provisions or attach “Schedule C – Professional Ownership Statement.” Use exact, simple wording.
• Label each schedule with the PLLC’s legal name and date. Number pages. Sign or initial the bottom of each page if filing on paper.

11) Review for Compliance

• Confirm the PLLC name uses the correct professional designator.
• Verify the professional purpose matches your licenses.
• Confirm each listed governing person meets licensing requirements.
• Check that the registered office is a Texas street address.
• Ensure the organizer signed and dated the form, and that all pages are included.

12) Filing Method and Fees

• You can file online, by mail, or in person. Online filing often speeds processing.
• The state charges a filing fee. Have a card or check ready, depending on the method.
• If filing by mail, use the current state address for business filings. Include the correct fee and a return address. Use a trackable mail option if timing is sensitive.
• Keep a copy of everything you send. Save the payment receipt.

13) After Filing: Next Steps

• Wait for state confirmation. You will receive an acknowledgment when the filing is accepted. If rejected, the state will note the issue. Fix the error and resubmit.
• Once accepted, download or request a file-stamped copy. Keep it with your records. Some banks ask for a Certificate of Filing or similar proof.
• Apply for an EIN. Open a business bank account in the PLLC’s name. Use your formation documents as proof.
• Complete your company agreement. Issue membership interests. Set up accounting, payroll, and insurance.
• Confirm that your professional licenses reflect the new entity if required by your licensing rules.

14) Signatures and Execution Details

• The organizer’s signature is required on the formation document. Printed names must match signatures.
• Use your title when you later sign contracts for the PLLC. For example, “Jane Doe, Manager,” or “John Smith, Managing Member.”
• Do not sign client engagement letters personally. Sign on behalf of the PLLC with your title.

15) Common Mistakes to Avoid

• Using “LLC” instead of “PLLC” in the company name.
• Listing a P.O. Box as the registered office.
• Vague professional purpose. Describe the licensed service clearly.
• Naming a non-licensed person as a governing person when not allowed.
• Forgetting a delayed effective date when you need time to prepare to operate.
• Omitting a required supplemental ownership statement for your profession.
• Failing to get the registered agent’s consent.

16) Practical Example: A Two-Owner Medical Practice

• You and a colleague, both licensed, plan a clinic. You choose “Premier Care PLLC.”
• You state the purpose as “the practice of medicine.” You select a commercial registered agent and use the agent’s Texas street address for the registered office.
• You choose manager-managed, naming both owners as initial managers because both will run operations.
• In Supplemental Provisions, you add that all ownership and governance will be limited to persons authorized to provide the professional service.
• You set the effective date to the first of next month to align with your lease and insurance start dates.
• The organizer signs. You file online and receive confirmation within days. You then open the bank account and begin onboarding staff.

17) Practical Example: A Solo Professional Forming a PLLC

• You select “Riverbend Counseling PLLC.”
• You state the purpose as “the practice of [your licensed counseling profession].”
• You serve as your own registered agent at your office address, which is a Texas street address.
• You choose member-managed. You list yourself as the sole governing member with your mailing address.
• You file “when filed” because you want to start billing next week. You sign as organizer. After acceptance, you adopt a company agreement, obtain an EIN, and notify payors.

By following these steps, you will complete Form 206 correctly and avoid common delays. Keep your records organized, observe professional ownership rules, and operate through the PLLC from day one. This supports your liability protections and sets a clean foundation for growth.

Legal Terms You Might Encounter

• Certificate of formation means the document you file to create the PLLC. Form 206 is the certificate for a Texas professional limited liability company. Once accepted, it brings your entity into existence.
• Professional limited liability company, or PLLC, is an LLC formed to provide professional services. You use it when your work requires a professional license, such as medical or legal. Form 206 sets that professional status from the start.
• Professional service is the licensed service your PLLC will provide. The form asks you to name that service clearly. Stay within your license scope when you describe it.
• Governing authority is the people who run the PLLC. They are either members or managers. The form makes you choose member-managed or manager-managed.
• Member is an owner of the PLLC. Members can manage the company or appoint managers. If member-managed, the members listed govern the entity.
• Manager is a non-owner or owner appointed to manage the PLLC. If manager-managed, the named managers govern the entity. The form records that choice and the names.
• Registered agent is the person or company that receives legal papers for the PLLC. The agent must accept the role. The form requires consent and the agent’s information.
• Registered office is the physical Texas address where the registered agent is located. It must be a street address. The form will not accept a P.O. Box as the sole address.
• Organizer is the person who prepares and signs Form 206. The organizer files on your behalf. The organizer does not need to be a member.
• Company agreement is the internal contract among members. It sets ownership, voting, and management rules. It is not filed with the form but should align with it.
• Effective date is when your PLLC legally starts. You can make it the filing date or choose a later date. The form gives you that option.
• Supplemental provisions are extra terms you add to the certificate. You can tailor governance, purpose limits, or licensing statements. Use this section only if needed and keep it clear.

FAQs

Do you need a professional license to form a PLLC?

Yes. A PLLC exists to offer licensed professional services. You should hold the license for the services you list. Some professions also require that all owners be licensed. Check your board’s ownership rules before filing.

Do all owners need to hold the same license?

Often, yes, but the rule depends on your profession. Some boards permit ownership by certain related professionals or professional entities. Confirm who may own equity before you list members on the form.

Do you need to include “PLLC” in the company name?

Yes. Your name must show the professional LLC status. Acceptable endings include PLLC or Professional Limited Liability Company. Make sure the exact ending matches what you put on the form.

Do you need a physical address for the registered office?

Yes. The registered office must be a Texas street address. A P.O. Box alone is not acceptable. Your registered agent must be available at that address during business hours.

Do you list members or managers on the form?

You must identify the governing authority. If member-managed, you list the members who govern. If manager-managed, you list the managers. The form does not require you to list all non-governing owners.

Can you delay the effective date after filing?

Yes. You can choose a delayed effective date on the form. You can also choose to activate on a selected event. If you choose an event, make sure it is clear and verifiable.

Can you change the registered agent or management later?

Yes. You can update the registered agent and office by filing an update with the state. You can change to member- or manager-managed by amendment. Align your company agreement with any changes.

Do you need anything beyond the field certificate to start operating?

Yes. Plan to adopt a company agreement, obtain an EIN, and open a bank account. Your profession may require board registrations or approvals. Keep proof of your licensing in your company records.

Checklist: Before, During, and After the Form 206 – Certificate of Formation – Professional Limited Liability Company

Before signing

• Confirm your professional licensing status.
• Verify that your profession may use a PLLC.
• Check name availability. Include “PLLC” or equivalent.
• Gather the registered agent’s name, consent, and Texas street address.
• Decide if you will be member-managed or manager-managed.
• Identify governing persons. Confirm correct spellings and addresses.
• Prepare a concise professional purpose statement.
• Decide on the effective date. Filing date or delayed date.
• Draft your company agreement outline to match the form.
• Confirm ownership and voting rules for licensed owners.
• Collect any board-required wording or disclosures.
• Prepare organizer details for the signature block.
• Plan how you will pay the filing fee.
• Decide if you need certified copies for banks or boards.

During signing

• Verify the exact company name and suffix.
• Confirm that the professional service is stated clearly and narrowly.
• Select the correct governing structure: members or managers.
• List only the governing persons required by the form.
• Check the registered agent’s consent and office physical address.
• Ensure no P.O. Box as the sole registered office.
• Review the effective date choice for accuracy.
• Add supplemental provisions only if they are needed and consistent.
• Ensure the organizer signs and dates the form.
• Confirm all addresses are complete and legible.
• Review capitalization and punctuation to match your other records.
• Double-check license-related statements for your profession.

After signing

• File the certificate with the Secretary of State.
• Pay the filing fee and keep proof of payment.
• Request a certified copy if you need one for a bank or board.
• Wait for confirmation and the filed certificate.
• Store the filed certificate and any certified copies safely.
• Hold an initial meeting of members or managers.
• Adopt and sign the company agreement.
• Approve initial resolutions and capital contributions.
• Obtain an EIN from the federal tax authority.
• Open a business bank account using the filed certificate and EIN.
• Register for state tax accounts if applicable.
• Notify your professional licensing board as required.
• Secure or update malpractice or professional liability insurance.
• Add your PLLC name to contracts, invoices, and letterhead.
• Calendar annual and periodic state filing deadlines.
• Maintain the registered agent and office without lapse.

Common Mistakes to Avoid Form 206 – Certificate of Formation – Professional Limited Liability Company

Using the wrong entity type or name ending

• Mistake: Using “LLC” instead of “PLLC” in the name.
• Consequence: Rejection of your filing or compliance issues.
• Tip: Include “PLLC” or the full phrase in the name every time.

Listing a P.O. Box as the registered office

• Mistake: Using a mailing-only address.
• Consequence: Rejection or inability to accept legal papers.
• Tip: Provide a Texas street address where the agent is available.

Choosing the wrong governing structure

• Mistake: Selecting manager-managed when you intend member control.
• Consequence: Governance confusion and bank or board delays.
• Tip: Align the form with your company agreement and owner intent.

Describing the purpose too broadly

• Mistake: Stating “any lawful purpose” for a PLLC.
• Consequence: Rejection or compliance problems with your board.
• Tip: State the licensed professional service clearly and only that service.

Failing to confirm agent consent or licensed ownership rules

• Mistake: Naming an agent without consent or owners without proper licenses.
• Consequence: Rejection or later invalidation by regulators.
• Tip: Get written agent consent and confirm owner eligibility before filing.

Forgetting supplemental provisions you actually need

• Mistake: Leaving out required profession-specific statements.
• Consequence: Rejection or extra amendments and delays.
• Tip: Add only what is needed, but include required statements for your board.

What to Do After Filling Out the Form 206 – Certificate of Formation – Professional Limited Liability Company

File the certificate

• Submit the signed form to the Secretary of State.
• Pay the required filing fee.
• Keep a copy of the form and any receipt for your records.
• If you expect to open a bank account soon, request a certified copy.

Track confirmation

• Watch for evidence of filing and the stamped certificate.
• Confirm that the effective date matches your plan.
• Verify that the public record reflects your registered agent and office.

Organize your records

• Create a digital and physical company record book.
• Include the filed certificate, certified copies, and initial resolutions.
• Store the registered agent consent and any board approvals.
• Keep copies of professional licenses for all licensed owners.

Hold initial governance actions

• Hold the first meeting of members or managers.
• Approve and adopt the company agreement.
• Issue membership interests and record capital contributions.
• Approve banking resolutions and authorized signers.

Set up tax and banking

• Obtain an EIN for the PLLC.
• Open a business bank account in the PLLC name.
• Register for any state tax accounts as needed for your activity.
• Decide on accounting methods and appoint an accountant.

Meet professional licensing requirements

• Notify your professional board if required.
• Submit any needed entity registration or certificate for the PLLC.
• Confirm professional insurance requirements and coverage levels.

Align contracts and operations

• Update engagement letters, patient forms, or client agreements to the PLLC.
• Update leases, vendor agreements, and service contracts to the PLLC.
• Update marketing materials and your website to reflect the PLLC name.

Calendar compliance

• Add annual filing and tax deadlines to a shared calendar.
• Monitor registered agent renewals and address changes.
• Track license renewals for each professional and the entity.

Plan for changes and growth

• If owners or managers change, prepare an internal resolution.
• Update the Secretary of State for registered agent or office changes.
• File a certificate of amendment if you change the name or governance.
• If you open new locations, update licenses and assumed names as needed.

Protect your liability shield

• Use the PLLC name on all invoices and contracts.
• Keep personal and business finances separate.
• Maintain meeting minutes and written approvals for major actions.
• Keep professional licenses active and in good standing.

Distribute key documents

• Provide the field certificate and company agreement to members.
• Share the registered agent details with your team.
• Give copies to your bank, accountant, and insurer as needed.

Confirm operational readiness

• Set up billing, trust accounts if applicable, and recordkeeping systems.
• Establish privacy and data security protocols for your profession.
• Train staff on signing authority and client intake under the PLLC.