Professional Corporations

Overview

Every state has laws that permit or require certain licensed professionals to form a professional corporation. The legal structure is the same as a business corporation: shareholders, directors and officers. Unlike a business corporation, the officers, directors, and shareholders are generally all required to be licensed professionals. Licensing board regulations specify the requirements for corporate names, use of fictitious business names, and any requirement to register as a professional corporation with the licensing agency.

Apart from these special requirements, a professional corporation is usually regulated under a state's general corporation law just like a regular business corporation. In other words, most of a professional corporation's affairs including holding of meetings, voting, shareholders' rights, dissolving the corporation, etc. are the same for both professional and business corporations.All states allow one person to form a professional corporation and be the only shareholder, director and fill all required office positions.

Just as in a regular business corporation, a professional corporation may choose to be taxed either as a C Corporation or an S Corporation.