A.B. Med. Servs., PLLC v Travelers Indem. Co. 2009 NY Slip Op 29510 (App. Term 2d Dept. 2009)
“Plaintiff, as a “professional service limited liability company” (Limited Liability Company Law § 1201 [f]), could render professional services only through individuals authorized by law to render such professional services (Limited Liability Company Law § 1204 [a]). Here, plaintiff’s sole member was Dr. Braver. Once his medical license was suspended, he became legally disqualified from practicing medicine within the state and was disqualified from continuing as a member of plaintiff (see Limited Liability Company Law § 1209). Dissolution occurred on the effective date of the suspension of Dr. Braver’s medical license since, at that point, there were no remaining members of the professional service limited liability company (see Limited Liability Company Law § 701 [a] [4] [a “limited liability company is dissolved and its affairs shall be wound up . . . at any time there are no members”]). We note that although articles of dissolution have now been filed, there is no statutory requirement that articles of dissolution be filed before commencement of the winding up process.
After dissolution, the affairs of the limited liability company are to be wound up (see Limited Liability Company Law § 703 [a]). Where a professional service limited liability company has other members remaining in the company, and continues to render professional [*3]services, a disqualified member must “sever all employment with and financial interests” in such company (Limited Liability Company Law § 1209). However, where, as here, the disqualified member was the sole member of such company, he may wind up the professional service limited liability company’s affairs by, among other things, prosecuting and/or defending an action on behalf of the professional service limited liability company (Limited Liability Company Law § 703 [b] [“the persons winding up the limited liability company’s affairs may, in the name of and for and on behalf of the limited liability company . . . prosecute and defend suits, whether civil, criminal or administrative, settle and close the limited liability company’s business”). Since the instant action could still be maintained in plaintiff’s name despite its dissolution, a stay of the proceedings, pursuant to CPLR 2201, was not warranted, and we strike such provision.”
According to the Appellate Term, it is better to lose your license and have no one else legally able to take over the affairs of the PLLC, then it is to lose your license and have a licensed individual able to run the PLLC.
