HOW TO FORM A PROFESSIONAL CORPORATION

A Corporation is a legal business structure which gives the owners, or shareholders, a level of personal asset protection which is much higher than that of a Business which has not been incorporated.  Anyone competent person of the legal age, usually around 18 years old, can form a Corporation by filing Articles of Incorporation with the Secretary of State.

A Professional Corporation can be formed only by people who hold some kind of state-issued license which authorizes the rendering of a single specific Professional Service.  A Professional Corporation may render Professional Services in a state only through its officers, employees and agents who are duly licensed to render the professional services in that state.

Click on any state in the list below to find out How to Form a Professioanl Corporation in that state

Generally a Professional Service is a service which requires the approval of a state licensing board.  Examples of Professional Services are:

Professional Corporations are subject to the same laws as normal Corporations.  There are differences between normal and Professional Corporations.  The diferences can vary from state to state.

• Incorporator
  An Incorporator is the person or business entity that prepares, files and signs the Articles of Incorporation in order to register a new business with the Secretary of State.  The incorporator for a normal Corporation is usually a competent person 18 years of age or older.  Some states require a state licensed Professional to be the Incorporator.
  
  
• Membership
  Some states require that all shareholders, officers and directors of a Professional Corporation be state licensed Professionals in the Professional Practice for which the Professional Corporation was formed.
  
  
• Stock Reporting
  Because most or all of the shareholders of a Professional Corporation are required to be licensed Professionals the reporting requirements of stock sales and transfers are usually stricter for Professional Corporations than the reporting requirements for normal Corporations.
  
  
• Annual Reports
  Almost all states require some kind of Annual Report which lists current address, officer and director information.  Usually, Corporations do not have to specify shareholder information on their Annual Reports.  Some states do, nowever, require Professional Corporations to annually report the names and addresses of all shareholders; confirm that all shareholders hold currently active Professional licenses; and file a certified copy of the Annual Report with the state licensing board.
  
  
• State Licensing
  The definition of Professional is a person who renders a service for which some kind of state license is required.  States regulate Professional licensing in various ways.  Usually there is an annual or biennial renewal reqirement.  If any of the Professionals in the Corporation are rendering Professional Services without a current valid license then the Professional Corporation may be at risk of administrative dissolution by the Secretary of State.
  
  

Personal asset liability protection is the biggest reason people form Cororations.  In addition to the liability protection of a regular Corporation, probably the biggest reason that groups of Professionals form a Professional Corporation is the protection of each individual shareholder (owner) from the malfeasance of all the other Professionals in the group.

Also, a Professional Corporation may hold property for investment or in connection with their practice.

In most states licensed Professionals in a Professional Corporation may provide only one specific Professional Service.  Some states make provisions for the provision of related Personal Services.  For example, Architects and Land Surveyors.

Some states require all shareholders, officers and directors to be licensed Professionals.  Others allow non-licensed people to hold office but not perform any Professional Services.

Becuase most or all of the shareholders (owners) of a Professional Corporation are required to be licensed Professionals the reporting requirements of stock sales and transfers can be more stringent for Professional Corporations than the reporting requirements for normal Corporations.

In addition, Professional Corporations are subject to the same laws and regulations as regular Corporations but Professional Corporations are also subject to the laws and regulations of a specific state licensing board.

The time it takes to get approval for a new Professional Corporation filing varies from state to state.  There are two components which affect the total approval time.

The first and most time-consuming component is getting approval from the state licensing board responsible for regulating the Professional Service to be rendered.  In some states this initial licensing board approval process can take over a month.

The second part of the approval process is filing Articles of Incorporation with the Secretary of State.  Processing times vary from state to state but the total processing time is much quicker than the initial licensing board approval process.  The Secretary of State in some states offers expedited filing options.  Click on a state in the list above to see specific processing times and fees for that state.

New Professional Corporation filing fees vary from state to state.  Our processing fees are $125.  This includes:
Click on a state in the list below to see specific processing times and fees for that state.