Professional Corporation

The Professional Corporations (PCs) are these entitiesproprietary right.
of corporation for which many act of company make- Paper work can become costly to owners.
the special provision, regulating the use of the- All incorporators must belong to the same
corporate form by licensed professionals such asoccupation.
attorneys, architects, engineers, accountants and 
doctors. A professional corporation is a corporationHow is a Professional Corporation or PLLC formed?
that is formed for the purpose of providing aTo register Professional Corporation the formation
professional service that by law a for-profit ordocuments, the articles of incorporation for a PC, the
nonprofit corporation is prohibited from rendering. Aproper state licensing body must often approve the
"professional service" means any type of service thatformation documents before these documents can be
requires, as a condition precedent to the rendering offiled with the Secretary of State. Further, the formation
the service, the obtaining of a license in the state.documents typically must contain the signature of a
 Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â licensed professional as the incorporator, and that
                person's license number typically is required. Therefore,
The legal payments applying to thethe filing time for professional entities is longer than the
professional-companies differ typically from thefiling time for standard business entities.
important manners of those which apply to otherTo form professional corporation may be by filing a
companies. The professional orders, which can have aCertificate of Incorporation pursuant of the Business
simple director or multiple directors, do not have theCorporation Law, includes any practice as an attorney
means usually this person or people the same degreeand counselor-at-law, or as a licensed physician, and
of limitation of responsibility as for the ordinarythose occupations designated in Title Education Law
companies of businesses. The Professional-companies(For a listing of professional services)
often exist as an element of larger, more complicated,To start professional corporation a Certificate of Good
legal entityStanding from the appropriate Division or a Certificate
 of Authority under seal from the State Department of
 Education, Division of Professional Licensing Services,
 Why Professional Corporation form?must be submitted with the Certificate of Incorporation.
  
A professional corporation (PC) formed with theWhat are the advantages of a Professional
intention of engages in one of the learned professions,Corporation?
as the law, as medicine, or as the architecture.A major advantage of a Professional Corporation is
Traditionally, the professional corporations (PC) werethe limited liability the corporate entity affords its
forbidden of engages in such professions becauseshareholders. Typically, shareholders are not legally
they lacked the human, the necessary personalresponsible for the debts and obligation of the
qualifications to follow them. In the recent yearscorporation, unless the shareholder has specifically
nevertheless most of the states promulgated aagreed to assume personal responsibility for the
professional corporation (PC) or an association actcorporate debts. This 'limited liability' benefit is generally
that allows the professional persons to practice in thelimited by State statute, as to Professional
form of business provided that all shareholders areCorporations (PC), in order to prevent a 'licensed
members of the profession.professional' from avoiding liability for 'malpractice'.
  
Professional Corporation - Point to ConsiderWhat are the disadvantages of a Professional
 Corporation? 
- There is a significant limitation on the personalThe primary disadvantage to a professional
responsibility in a corporation.corporation is the potential for "double taxation". This
- While the corporation cannot protect a professionaloccurs when the 'Earnings and Profits' of a
against their own negligence, it protects them againstprofessional corporation are distributed to shareholders
the negligence of an associate.as 'Dividends'. These 'Earnings and Profits' were taxed
- Professional Corporation is a useful securing of datafirst as 'Income' earned by the corporation, and again
to occupation wrongdoing insurance.taxed as 'Income' to the shareholder when received
- More expensive to create than a partnership or onlyas 'Dividends'.