General
A legal structure authorized by state law for a fairly narrow list of licensed professions, including lawyers, doctors, accountants, many types of higher-level health providers and often architects. Unlike a regular corporation, a professional corporation does not absolve a professional for personal liability for her own negligence or malpractice. The main reason why groups of professions choose this organizational structure is that, unlike a general partnership, owners are not personally liable for the malpractice of other owners. In some states, limited liability partnerships offer this same benefit and may be more desirable for other reasons.
Professional Corporation - Points to Consider
- There is a significant limitation on personal liability in a professional corporation.
- While the corporation cannot protect a professional against their own negligence, it does protect them against the negligence of an associate.
- Professional corporation is a useful back-up to malpractice insurance.
- More expensive to create than a partnership or sole proprietorship.
- Paperwork can become burdensome to owners.
- All shareholders must belong to the same profession.
Corporate name shall end with the words "Professional Corporation" or "Professional Association" or the abbreviation "PC" or "PA".
The proposed name of the corporation appropriately describes the profession or professions practiced and the services to be provided and is not false, fraudulent, deceptive or misleading.
OLEN
Business Services
