[CA] Can a CPA use an LLC for non-CPA consulting services, or are those still treated as professional accounting services?

Lexi, Chatbot

I understand that confirming the classification of your services is crucial for your LLC formation. Can you please specify what type of services you are planning to offer through your LLC?

Lexi, Chatbot

Have you already taken any steps towards forming your LLC, such as filing paperwork or consulting with any professionals?

Lexi, Chatbot

Is there anything else the Corporate Lawyer should know before I connect you? Rest assured they'll be able to help with your LLC formation.

TJ, Esq.

Hello! My name is TJ and I’m an attorney. Thanks so much for the opportunity to assist you! I’ve gone over the details you shared and I’ll post my initial response shortly. I’ll also post a few quick questions. They’ll help me better understand your situation so I can give you a more complete and tailored answer.

VERY IMPORTANT INFORMATION:

1. If you don’t hear back from me right away, please don’t worry — I WILL GET BACK TO YOU.

2. This is general legal information only. I can’t represent you or form an attorney-client relationship.

TJ, Esq.

Under California law, a licensed CPA providing consulting and advisory services related to finance and management would likely be considered to be engaging in a professional service, even if the work doesn't require a CPA license. The law often focuses on the nature of the services provided and the individual's qualifications, not just whether a license is required for the specific task.

Since you are a licensed CPA and your services are closely related to your field of expertise, it could be difficult to argue that your work is not a professional service. Because California prohibits LLCs from providing professional services, forming an LLC for this type of work may not be allowed.

A few follow-up questions:

• Are any of your proposed services regulated by a state board or agency, even if they don't require the license you hold?
• Are you considering any other business structures besides an LLC?
• Where will the business be registered?

TJ, Esq.

Based on what you've shared, it's very likely that you cannot form an LLC for this business in California. The law is strict when it comes to professional services, and the fact that you're a CPA providing financially related consulting puts you squarely in that category—even if the work doesn’t technically require a CPA license.

The law looks not just at what you do, but who is doing it. Since your expertise and license give value to the consulting, a court would likely view this as professional services. (CA Corp Code § 13401(a))

That said, you do have options for liability protection:

• Professional Corporation (PC): Designed for licensed professionals like CPAs and provides liability protection similar to an LLC.
• Limited Liability Partnership (LLP): Common for licensed professionals, though typically requires multiple partners.

You’ll want to choose a structure that is explicitly permitted under California law to ensure your liability protection actually holds up in court.

TJ, Esq.

Have I answered your questions fully?

TJ, Esq.

Your additional degrees are impressive, but they likely don’t change the legal analysis. The issue is the CPA license itself, which is a professional license under California law. Courts tend to focus on licensure and the nature of the services, not academic credentials.

As for the LLP question: no, an LLP requires at least two partners. A sole owner cannot form an LLP. Given that, a professional corporation is likely your best option as a solo professional seeking liability protection.

TJ, Esq.

That’s an excellent and very common question. The Board of Accountancy’s position helps, but it doesn’t resolve the issue entirely.

The Board regulates licensing and firm registration, but California corporate law is separate. Even if the Board doesn’t object, a future client—or a court—could still challenge your LLC as an improper entity for professional services.

If a client sued you for professional negligence, a court could determine that the LLC was not legally permitted and pierce the corporate veil, exposing you to personal liability. That would defeat the main purpose of forming the LLC.

So while many people do form LLCs in similar situations and never have an issue, the risk is that the structure may not hold up if it is ever challenged. The safest route is always to use a business structure that is explicitly authorized for licensed professionals.