Can the agreement be e-signed?

Yes. Electronic signatures are generally valid under the ESIGN Act (15 U.S.C. ch. 96) and UETA where adopted, provided intent, consent, attribution, and record retention requirements are met. Check for any statutory exceptions that may still require wet signatures.

Does the agreement require notarization?

Operating agreements are usually internal documents and do not require notarization for validity in Texas. Notarization may be needed for related filings, affidavits, or in some lender or title company scenarios; follow contract terms and parties' preferences.

Who is authorized to sign this agreement?

Authorized signers are typically members, managers, or officers designated in the agreement. Corporate signers must have authority documented in resolutions or appointment records. Attorneys can sign on behalf of clients only with express written authority.

How to amend the agreement?

Follow the amendment process specified in the agreement, typically requiring written consent and specified voting thresholds. Record and date amendments, circulate amended copies to members, and, if needed, file required notices with regulatory bodies or update internal records.

What if a member loses their license?

Loss or suspension of a professional license typically triggers removal or transfer provisions. The agreement should specify suspension remedies, temporary practice limitations, and buyout or expulsion mechanics to protect the PLLC and comply with licensing board requirements.

How long to retain executed copies?

Retain executed agreements for at least three years after termination for IRS purposes; retain healthcare-related documents for six years to comply with HIPAA (45 CFR §164.530(j)). Check state-specific rules for longer retention.

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Texas Professional Limited Liability Company Agreement

Texas Professional Limited Liability Company Agreement

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

What the Texas Professional Limited Liability Company Agreement Is

The Texas Professional Limited Liability Company Agreement is a legally binding operating agreement used by licensed professionals who form a professional limited liability company (PLLC) in Texas. It sets forth the company's purpose limited to authorized professional services, member roles and voting rights, capital contributions, profit and loss allocation, management structure, admission and withdrawal processes, and procedures for dissolution. The agreement supplements statutory requirements under Texas business entity law and governs internal relationships, professional liability limitations, and regulatory compliance for members who hold professional licenses.

Why a Clear Agreement Matters for Texas PLLCs

Provides a clear framework for governance, member responsibilities, and allocation of liabilities tailored to licensed professionals, helping reduce conflicts, document regulatory compliance, and clarify professional service limitations under state law.

Who Uses This Agreement in Practice

Primary users include licensed professionals, firm managers, and attorneys drafting PLLC governance documents in Texas.

Physicians and healthcare groups establishing a Texas PLLC for clinical practice governance.
Attorneys forming ethics-compliant law PLLCs with member discipline and ownership restrictions.
Architects, engineers, and other licensed professions managing professional liability and ownership rules.

Representative Roles and Responsibilities

Managing Member

Managing members use the agreement to define authority, profit allocation, and responsibility for compliance. They rely on clear voting thresholds, decision-making rules, and buyout procedures to manage transitions and limit exposure to business liabilities while preserving professional standards.

Practicing Attorney

Attorneys and firm counsel draft or review PLLC agreements to ensure alignment with Texas professional regulations, conflict-of-interest rules, and client trust obligations. They incorporate governance clauses that satisfy bar requirements and protect individual lawyers' licensure and malpractice exposure.

Core Provisions to Include in Your Texas PLLC Agreement

Core provisions explain how the Texas Professional Limited Liability Company Agreement structures membership, management, liability allocation, and regulatory compliance for licensed professionals.

Purpose

Defines the professional services the PLLC may provide, limits the company to licensed practice areas, and records compliance obligations required by Texas regulatory authorities and licensing boards.

Membership

Specifies admission criteria, member capital contributions, ownership percentages, voting rights, transfer restrictions, and procedures to add or withdraw licensed members in compliance with professional rules.

Management

Sets whether the PLLC is member-managed or manager-managed, outlines manager duties, decision thresholds, authority for professional oversight, delegation limits, and reporting obligations to members and regulators.

Liability

Allocates limited liability protections among members for business debts and contracts while expressly stating that individual professional malpractice and disciplinary responsibility remain personal obligations of the licensed practitioner.

Dissolution

Describes dissolution triggers, buyout valuation and payment mechanics, winding-up procedures, apportionment of outstanding professional liabilities, creditor claims resolution, and member duties to notify licensing boards.

Amendments

Specifies amendment thresholds, approval voting requirements, notice procedures, recordation of amendments, and steps to ensure changes comply with professional licensing rules and statutory filing requirements.

Step-by-Step: Complete and Execute the Agreement

Follow these steps to complete and execute the Texas Professional Limited Liability Company Agreement accurately.

01

Gather documents: Collect licenses, formation certificate, and ID for each member.
02

Complete fields: Enter company name, member info, and governing state.
03

Review terms: Verify management, liability, and transfer provisions with counsel.
04

Sign and file: Obtain signatures, notarize if required, retain originals.

How to Configure an Online Signing Workflow

Configure an online workflow to collect eSignatures, attach required exhibits, set signer authentication, and store completed agreements securely.

Field	Configuration
Document upload	Use PDF or DOCX file
Signature fields	Place signature, initials, date fields
Authentication	Email link, SMS code, or KBA
Notifications	Set signer reminders and completion alerts

Where to Send Executed Agreements and Copies

After execution, route the signed Texas PLLC Agreement to appropriate filing destinations and retain copies for compliance and audit purposes.

Secretary of State: File formation documents or amendments as required
Licensing boards: Provide copies to professional licensing authorities when required
Tax agencies: Keep copies for IRS reporting and state tax filings
Internal records: Store executed agreement and amendment history securely

Technical Requirements for eSubmission and Storage

Ensure your eSignature platform supports required authentication, audit trails, and secure storage before e-submitting the agreement.

File formats: PDF, DOCX, and PDF/A supported
Integrations: Salesforce, NetSuite, Microsoft 365
Security: TLS 1.2/1.3 and AES-256 encryption

eSignature Vendor Comparison for Executing Agreements

Comparison of common eSignature plan features important for executing and managing Texas Professional Limited Liability Company Agreements; vendor names are presented for feature parity.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies by vendor	Varies by vendor	Varies by vendor	Varies by vendor
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

Key Deadlines and Filing Milestones

Key dates to track during and after PLLC formation include state filings, tax registrations, employer reporting, license renewals, and internal governance milestones.

Certificate of Formation filing:

File with Texas Secretary of State when creating PLLC.

EIN application:

Apply to IRS for employer identification number after formation.

Tax registrations:

Register for state franchise tax and sales tax accounts if applicable.

License renewals:

Follow professional board renewal cycles and reporting deadlines.

Operating meeting schedule:

Document initial organization meeting and annual member meetings.

Best Practices to Reduce Risk and Improve Clarity

Practical tips ensure the Texas Professional Limited Liability Company Agreement is clear, enforceable, and aligned with professional obligations and member expectations.

Use plain language and defined terms

Draft provisions in plain language, define capitalized terms consistently, and avoid ambiguous phrases. Clear definitions reduce disputes, enable consistent interpretation, and make regulatory review straightforward for licensing boards or counsel reviewing the agreement.

Coordinate with professional licensing rules

Cross-check agreement provisions against relevant Texas licensing rules and any specialty board standards. Address restrictions on ownership, practice scope, supervisory relationships, and reporting obligations to avoid conflicts between the operating agreement and regulatory requirements.

Specify dispute resolution and deadlock mechanisms

Include mediation and arbitration clauses, buy-sell or shotgun provisions, and clear valuation methods for member departures. Defined procedures reduce litigation risk and provide predictable remedies when professional partners disagree on governance or practice management.

Maintain separate practice insurance and bank accounts

Keep distinct professional liability insurance policies, bank accounts, and books for the PLLC. Avoid commingling personal funds, document expense allocations, and require proof of insurance from members to protect professional practice and limit corporate veil challenges.

Common Preparation Pitfalls to Avoid

Using handwritten or informal signatures without verifying intent or consent can create enforceability disputes and complicate audit trails under ESIGN or UETA.
Failing to define member capital contributions or valuation methods leads to ambiguity in buyouts and increases litigation risk among departing professionals.
Not aligning the agreement with professional board rules or neglecting to provide license numbers may trigger regulatory noncompliance and sanctions.
Relying solely on oral side agreements or failing to update the operating agreement after membership changes undermines enforceability and record accuracy.

Potential Consequences of an Incorrect or Incomplete Agreement

Invalid agreement: Operational disputes and unenforceability

License sanctions: Disciplinary actions by board

Personal liability: Malpractice remains individual

Tax penalties: IRS fines for misreporting

I-9 violations: Penalties per DHS rules

Recordkeeping failures: Loss of evidence for disputes

Example Scenarios: How Agreements Resolve Real Issues

Real-world examples show how a Texas PLLC agreement resolves governance, liability allocation, and member transitions in professional practices.

Small medical practice

A three-physician clinic forms a Texas PLLC and uses a tailored agreement to allocate management duties and malpractice coverage.

Set a clear buyout valuation formula.
The agreement specified valuation methods, required proof of individual malpractice insurance, and established mediation then arbitration for disputes, which minimized litigation and protected patient care continuity during member departures and transition planning.

Engineering firm

An engineering partnership converted to a Texas PLLC to formalize ownership percentages, assign IP rights, and limit business debts to the company.

Use assignment clauses to protect firm intellectual property.
The operating agreement required inventor assignment, established revenue sharing for project IP, and defined management authority for licensing technology, enabling the firm to pursue contracts without renegotiating partner contributions or ownership stakes.

Essential Information to Include for Compliance and Security

Company name: Exact legal name of PLLC

Registered agent: Texas registered agent and address

Professional purpose: Licensed services description in writing

Member list: Names, license numbers, capital contributions

Governing law: Choice of Texas law

Signature blocks: Signatures with printed name and date

Frequently Asked Questions About Texas PLLC Agreements

Answers to common questions about preparing, signing, and maintaining a Texas Professional Limited Liability Company Agreement, including eSignature, notarization, and compliance concerns.

Need help? Contact support

Can the agreement be e-signed?
Yes. Electronic signatures are generally valid under the ESIGN Act (15 U.S.C. ch. 96) and UETA where adopted, provided intent, consent, attribution, and record retention requirements are met. Check for any statutory exceptions that may still require wet signatures.
Does the agreement require notarization?
Operating agreements are usually internal documents and do not require notarization for validity in Texas. Notarization may be needed for related filings, affidavits, or in some lender or title company scenarios; follow contract terms and parties' preferences.
Who is authorized to sign this agreement?
Authorized signers are typically members, managers, or officers designated in the agreement. Corporate signers must have authority documented in resolutions or appointment records. Attorneys can sign on behalf of clients only with express written authority.
How to amend the agreement?
Follow the amendment process specified in the agreement, typically requiring written consent and specified voting thresholds. Record and date amendments, circulate amended copies to members, and, if needed, file required notices with regulatory bodies or update internal records.
What if a member loses their license?
Loss or suspension of a professional license typically triggers removal or transfer provisions. The agreement should specify suspension remedies, temporary practice limitations, and buyout or expulsion mechanics to protect the PLLC and comply with licensing board requirements.
How long to retain executed copies?
Retain executed agreements for at least three years after termination for IRS purposes; retain healthcare-related documents for six years to comply with HIPAA (45 CFR §164.530(j)). Check state-specific rules for longer retention.

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