The California Secretary of State instructions for the Articles of Organization form state on there that service-based businesses cannot operate via LLC unless there is an affirmative clause in the California Business Professions Code authorizing the subject profession with the ability to do so.
California BPC § 6400 et seq. does not contain authorizing clause for Legal Document Assistants profession to operate via LLC. Therefore, Legal Document Assistants are limited to incorporation or sole proprietorship.
In fact, Paralegals, LDAs, and any profession under CA BPC, cannot form an LLC for their professional services, because CA CORP §17701.04.says:
(e) Nothing in this title shall be construed to permit a domestic or foreign limited liability company to render professional services, as defined in subdivision (a) of Section 13401 and in Section 13401.3, in this state.
13401. As used in this part: (a) “Professional services” means any type of professional services that may be lawfully rendered only pursuant to a license, certification, or registration authorized by the Business and Professions Code, the Chiropractic Act, or the Osteopathic Act.
13401.3. As used in this part, “professional services” also means any type of professional services that may be lawfully rendered only pursuant to a license, certification, or registration authorized by the Yacht and Ship Brokers Act (Article 2 (commencing with Section 700) of Chapter 5 of Division 3 of the Harbors and Navigation Code).
That said, many Paralegal Service Provider and a handful of Legal Document Assistants have structure their businesses as LLCs. Whether the LLC limited liability protections will be tested later when invocation become necessary. Would a court pierce the LLC veil? Well… do you feel luck? Well do ya’?
Author: Angela Grijalva
Just another entrepreneur "trying to make a dollar out of 15 cents," stay out of jail while making a difference in my community.