The Professional Corporation is the formation of choice for many business owners who work in accounting, law, medicine, architecture, engineering and related fields. These business entities can help licensed professionals protect their personal assets against lawsuits brought against their practices.
State laws vary, but Professional Corporations usually share these characteristics:
- Owners are generally required to be licensed in the same profession.
- Proof of licensing is often required for state approval.
- Industry-specific regulations may apply to your company name.
- States may require entity-specific endings for your company name (“PC” for a Professional Corporation, for example).
It’s important to note that by forming a Professional Corporation, owners are not free from personal liability for malpractice or other suits brought against them. However, these formation types do protect owners from the malpractice of other owners within the company.
In addition, Professional Corporations are taxed differently. PCs are generally taxed like a C-Corporation, with the PC paying taxes at the corporate rate, which can lead to double taxation. You should consult with a tax adviser or accountant before forming a Professional Corporation to determine the best tax treatment for your company.
Forming these companies may also require additional steps on the part of the owners. Along with approval from the Secretary of State, professional entities often must seek approval of their formation documents from the state professional licensing body.
We can can help doctors, lawyers, architects, accountants, engineers, and other licensed professionals form Professional Corporations.
Provide us with some basic information about your profession and your business objectives and we will work with you to complete, file and seek approval for a Professional Company formation.