{"id":4861,"date":"2016-04-04T10:47:45","date_gmt":"2016-04-04T15:47:45","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/incorporation-and-legal-structures\/professional-corporations.html"},"modified":"2025-10-23T13:24:00","modified_gmt":"2025-10-23T18:24:00","slug":"professional-corporations","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/professional-corporations.html","title":{"rendered":"Professional Corporations"},"content":{"rendered":"\n
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Professional Corporations<\/h1>\n\n
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\n By Jade Yeban, Esq.<\/a> | Legally reviewed by Catherine Hodder, Esq.<\/a>\n | Last updated\n
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Editorial Note: We earn a commission from affiliate partner links on FindLaw. Commissions do not affect the editorial integrity of our legal content.<\/p>\n\n <\/div>\n \n

\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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A professional corporation<\/span> (PC) is a special legal entity<\/span> created for licensed professionals<\/span>, such as doctors, lawyers, or accountants. A PC separates personal assets<\/span> from business debts and lawsuits. While a PC can shield an owner from malpractice<\/span> of their associates, it does not protect them from liability for their own negligence<\/span>.<\/p>\n\n <\/div>\n\n\n\n

Starting a small business<\/span> is an exciting adventure, but it comes with many decisions. One important choice is your business structure<\/span>. You may be familiar with entity types, like the general partnership or nonprofit organization. Professional corporations<\/span>\u00a0are also a type of entity that is best for certain types of professionals.<\/p>\n

Some states require certain professionals to register as a professional corporation<\/span>. In other states, these professionals have the option of choosing how to organize. They can register as professional <\/span>corporations<\/span><\/a> or regular corporations<\/span>. In all states, people in certain professions can form professional corporations<\/span> or professional service corporations<\/span>.<\/p>\n

This guide will provide an overview of professional <\/span>corporations<\/span><\/a>. It discusses important topics like formation, corporate tax rates<\/span>, and the pros and cons of PCs.<\/p>\n

Need help with business formation? Our trusted partner LegalZoom makes it easy\u2014packages start at $0 + state filing fees.<\/a><\/b><\/em><\/p>\n

What Is a Professional Corporation<\/span>?<\/h2>\n

A professional corporation<\/span>, often referred to as a PC, is a type of <\/span>business<\/span> structure<\/span>. Professional <\/span>corporations<\/span><\/a> are organizations of licensed professionals<\/span> in the same field or trade. These professionals include doctors, lawyers, accountants, and others.<\/p>\n

Unlike a\u00a0general partnership<\/a>, a PC offers both business owners and corporation owners liability protection. This means personal assets<\/span>, like your home or car, can be safeguarded from business debts or lawsuits.<\/p>\n

A professional corporation<\/span>\u2019s ownership is a bit different than other business structures<\/span>. PCs are owned by shareholders. These shareholders are professionals. The board of directors<\/span> typically makes significant business decisions. Meanwhile, the company\u2019s officers manage the day-to-day operations.<\/p>\n

Depending on state laws<\/span>, a professional may choose between PCs or a PLLC<\/span>\u00a0(professional <\/span>limited liability company<\/span><\/a>, or an LLP (limited liability partnership<\/span>).<\/p>\n

Incorporating as a Professional Corporation<\/span>: Is it Required?<\/h2>\n

Not all professionals need to form a PC. State law<\/span> dictates which professions must use this business formation type. Often, professionals have the choice between a PC, PLLC<\/span>, or C corporation<\/span>. It\u2019s essential to check with state licensing regulations. You can also consult a legal expert for more information.<\/p>\n

Depending on the state that you are in, the list of professionals that must be incorporated as a professional corporation<\/span> may vary. However, in most states, the list of professionals that are required to incorporate as a professional corporation<\/span> includes:<\/p>\n