Why Court Reporting Agencies Can`t Be LLCs

Did you know court reporting agencies cannot be formed as LLCs? This is not legal advice, but dive in below to get the scoop on this often overlooked nuance to entity formation for court reporting businesses.

Again, this is not legal advice. But the information below comes from attorney Nathan W. Heyde, Esq. from the firm of Varner & Brandt: https://www.varnerbrandt.com.

I wrote Nathan earlier today and, within minutes he had an informed response:

Todd: 'I’m double checking my understanding about something. From my time in the court reporting industry, I have always been told by legal peers and operated under the assumption that court reporting agencies cannot be formed as LLCs. The rationale was that court reporters hold a special obligation to the public and could not therefore “limit” their liability towards that obligation, etc, etc.

Would you happen to have a definitive answer on that?'


Nathan: 'It is my understanding that court reporters require a licensure in order to perform professional services.  According to California statutes, and confirmed by the attached Attorney General Opinion, court reporters (shorthand reporters) may not form an LLC.  Under the California Revised Uniform Limited Liability Company Act, no LLC is permitted to render professional services.   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.  Court reporters are regulated and licensed pursuant to the Business and Professions Code. 

In sum, if you conduct professional services that require licensure, you can not operate as an LLC.


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Friday, October 14, 2022

Author
Todd Olivas

Todd Olivas is a court reporter and entrepreneur.
He founded TO&A in 2003.


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