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Limited Liability Company – General – Virginia

A Virginia limited liability company organized to engage in the practice of law is controlled generally by the provisions of the Virginia Limited Liability Company Act and specifically by the provisions of the Virginia Professional Limited Liability Company Act. When there is a conflict between the provisions of the two Acts, then the provisions of the Virginia Professional Limited Liability Company Act control.

Additionally, a Virginia limited liability company organized to engage in the practice of law is controlled by the statutory provisions of CODE OF VIRGINIA, Title 54.1, Chapter 39 (Law) as well as all rules and regulations of Virginia Supreme Court and the Virginia State Bar.

A “professional limited liability company” is a limited liability company whose articles of organization set forth a sole and specific purpose permitted by law and is either organized for the sole and specific purpose of rendering professional services of one or more attorneys at law and attorney at law assistants licensed under the provisions of Chapter 34.1 of Title 54.1.

“Professional services” means any type of personal service to the public that requires as a condition precedent to the rendering of that service or the use of that title the obtaining of a license, certification, or other legal authorization and is limited to the personal services rendered by pharmacists, optometrists, attorneys at law and attorney at law assistants, practitioners of the healing arts, nurse practitioners, practitioners of the behavioral science professions, veterinarians, surgeons, dentists, architects, professional engineers, land surveyors, certified landscape architects, certified interior designers, public accountants, certified public accountants, attorneys at law, insurance consultants, audiologists or speech pathologists and clinical nurse specialists.

A limited liability company name must contain the words “limited company” or “limited liability company” or the abbreviation “L.C.,” “LC,” “L.L.C.,” or “LLC.” and may NOT contain the words “Corporation,” “Incorporated,” “Limited Partnership” or the abbreviations “Corp.,” “Inc.” or “L.P.” or any word or phrase the use of which is prohibited by law. However, a professional limited liability company may use the initials “P.L.C.,” “PLC,” “P.L.L.C.” or “PLLC,” or the phrase “a professional limited company” or “a professional limited liability company,” immediately after its limited liability company name.

No limited liability company may render professional services except through its members, managers, employees and agents who are duly licensed or otherwise legally authorized to render those professional services. Only members, managers, employees, and agents licensed or otherwise legally qualified in Virginia may perform the professional service in Virginia. This restriction does not preclude clerks, secretaries, bookkeepers, technicians and other assistants who are not usually and ordinarily considered by custom and practice to be rendering professional service to the public for which a license or other legal authorization is required from acting as employees, managers and agents of a professional limited liability company and performing their usual duties or from acting as employees, managers or agents of a professional limited liability company.

The provisions of the Virginia Professional Limited Liability Company Act do not alter or affect the professional relationship between a person furnishing professional services and a person receiving that service either with respect to liability arising out of that professional service or the confidential relationship between the person rendering the professional service and the person receiving that professional service. All confidential relationships enjoyed under the laws of Virginia, whether now in existence, or hereafter enacted, remain inviolate.

A member, manager, agent or employee of a professional limited liability company is not, by reason of being any member, manager, agent or employee of a professional limited liability company, personally liable for any debts or claims against, or the acts or omissions of the professional limited liability company or of another member, manager, agent or employee of the professional limited liability company, but the professional limited liability company is liable for the acts or omissions of its members, managers, agents, employees and servants to the same extent to which any other limited liability company is liable for the acts or omissions of its members, managers, agents, employees and servants while they are engaged in carrying on the limited liability company business.

A professional limited liability company may not engage in any business other than the rendering of the professional services for which it was specifically organized. However, a limited liability company may invest its funds in real estate, mortgages, stocks, bonds or any other type of investments, may own real or personal property, and may exercise any other investment power granted to limited liability companies that are not in conflict with the Virginia Professional Limited Liability Company Act.

No professional limited liability company organized to engage in the practice of law may have as a member anyone other than an individual or a professional business entity that is duly licensed or otherwise legally authorized to render the same professional services as those for which the professional limited liability company was organized or as otherwise allowed by statute.

A member of a professional limited liability company may not sell, assign, or otherwise transfer that member’s membership interest in the professional limited liability company except to the professional limited liability company, another individual or professional business entity that is eligible to be a member of that professional limited liability company, or a qualified charitable remainder trust. A “qualified charitable remainder trust” means a trust meeting the requirements of § 664 of the United States Internal Revenue Code of 1986, as amended, and which meets all of the following conditions:

1. Has one or more current income beneficiaries, all of which are eligible to be members in the professional limited liability company under §13.1-1103.
2. Has a trustee or independent special trustee who:

a. Is eligible to have a membership interest in the professional limited liability company under § 1-1103; and
b. Has exclusive authority over the membership interests while such interests are held in the trust.

3. Has one or more irrevocably designated charitable remaindermen, all of which must at all times be domiciled or maintain a local chapter in Virginia.

If any member, manager, agent or employee of a professional limited liability company who has been rendering professional service to the public becomes legally disqualified to render those professional services within Virginia, that member, manager, agent or employee shall immediately sever all employment with, and financial interests in, the professional limited liability company. A professional limited liability company’s failure to require compliance with this provision constitutes grounds for the forfeiture of the company’s articles of organization and its dissolution by the State Corporation Commission.

Unless the articles of organization or an operating agreement provides for management of a professional limited liability company by a manager or managers, management of a professional limited liability company shall be vested in its members. If the articles of organization or an operating agreement provides for management of a professional limited liability company by a manager or managers, the manager shall be an individual or professional business entity duly licensed or otherwise legally authorized to render the same professional services within Virginia that the professional limited liability company was organized for the purpose of rendering. Only members or managers duly licensed or otherwise legally authorized to render the same professional services within Virginia shall supervise and direct the provision of professional services within Virginia.

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