What happens if I form a limited liability company to provide professional or nonprofessional services that cannot be provided through an LLC in California?

Under California law, you cannot provide professional services through a limited liability company. In addition, if you provide certain nonprofessional services and must be licensed, certified, or registered to perform those services under California law, then you can provide the services through an LLC only if the law specifically says you can. If you provide professional or nonprofessional services through an LLC despite being prohibited from doing so, you are risking some significant consequences. First, the LLC may be criminally liable for providing services without a license, and you may be criminally liable for aiding and abetting the LLC in committing the violation. Second, the LLC may not have insurance coverage for services provided without a license, in light of the criminal-acts exclusion typically found in liability insurance policies. Third, you cannot recover fees charged for providing services through an LLC that is not authorized to render those services. Finally, it is possible that you could be held personally liable for any debts incurred by the LLC in connection with providing those services. For more information, see our article on What Are The Consequences If An LLC Renders Professional Or Nonprofessional Services That It Is Not Authorized To Render Under California Law?