Professional Corporations


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  • 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 any fictitious business names, and any requirement to register as a professional corporation with the licensing agency.
  • There are substantial limitations on the limited liability protection for shareholders in a professional corporation. Many licensing agencies require licensees to provide malpractice insurance. Secondly, most, if not all, states have a public policy that every individual is legally responsible for damages that are caused by his or her personal negligence or other misconduct. No limited liability entity will provide a shield against personal liability in these circumstances.
  • Apart from these special requirements, a professional corporation is usually regulated under a state's general corporation law just like a regular business corporation.
  • 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.

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