What is a Professional Corporations (PC)?
A Professional Corporation is a specific corporation reserved for licensed professionals and include Law, Accounting, Medicine, Engineering, and other licensed professional services. Forming a PC is a good idea for professionals because it helps protect the owner of the business from losing their personal assets in a lawsuit against the business.
Who can form a PC?
Professional Corporations are reserved for licensed professionals that are licensed in the type of business they wish to conduct under the PC. The owners are required to be licensed in the state in which they practice.
What paperwork is required to form a PC?
When creating a PC, Articles of Incorporation or a Certificate of Incorporation must be prepared and submitted to the respective Department of State for filing. The information required in the formation document varies per state. When forming your company we will request the mandatory information from you in order to complete the filing. In addition to the formation documents some states require that PC’s obtain consent from one or multiple state agencies in order to form the company. If consent is required we will likely need copies of your professional license and any sub-specialties that you will be practicing under the PC name. If required Accumera will obtain these consents for you. View our State Specific Information page for details on what information is required for your filing.
How many people are needed to form a PC?
To form a PC, only one officer, shareholder, and director is required and the positions can be held by one individual. You can have as many or a little or as many people as you want but some states have restrictions on the number of directors that you can have based on the number of shareholders the company has. When Accumera forms your company we will act as the initial incorporator.
Are there any restrictions on naming my PC?
Most states require that the company name include the corporate ending “P.C.”, “Professional Corporation”, “P.A.”, “Professional Association”, “S.C.” or “Service Corporation”. Further some states require that the company name include the title of the profession being practiced (example: John Doe Physician, P.C.) In addition, some states have restricted word that cannot be used in any name. View our State Specific Information page for details specific to your state.
Who can be the shareholder or director of a PC?
Most states require that the shareholder or director of the Corporation be a professional licensed within the state of formation. Contact us for questions about your specific state. Note: As of 2012 New York Education Law allows for a new form of entity called the D.P.C (Domestic Professional Corporation.) which can be formed by Engineering firms only. The D.P.C. allows for a certain percentage of the shareholders and officers to be non-licensed professionals. Contact us (https://www.accumera.com/contact-us/) for any questions about NY D.P.C.’s.
What are authorized shares of stock?
Authorized shares of stock is the total amount of shares that the corporation has the authority to disburse to the shareholders of the corporation. The authorized shares of stock is listed in the Articles of Incorporation or a Certificate of Incorporation. You are not required to disburse all of the shares after your company is formed. You can reserve some to give out at a later time to certain shareholders in order to give some shareholders more of an advantage over the corporation.
What is a share’s par value?
A share’s par value is the minimum value of the stock. Most shares of stock have a $.01, $1.00, or no par value. For public companies, the value of the stock depends on how much investors are willing to pay. For private companies, the par value is based on the overall value of the company.
How many shares of stock should my PC have?
When Accumera forms your company we will automatically authorize 200 shares of stock for your company. This is normally enough for business to run properly. If you wish to issue more stock it is certainly allowed but it may result in a higher filing fee when filing.
Does my PC need a registered agent?
In most states your PC is required to have a Registered Agent who can accept service of process on behalf of the company. If required your company must have a Registered Agent in every state where your company is registered. Further, you must maintain the Registered Agent with the Secretary of State in order to keep your company active. Accumera can provide you with registered agent services as required in your state.
What are Corporate Bylaws?
The corporate bylaws is a document that states the internal rules and regulations for how your PC will operate. Each state has different requirements for what must be included in the corporate bylaws. Included with Accumera’s corporate kit are state specific bylaws that you can use for your company. Please note that corporate bylaws do not get submitted or filed with the respective Department of State.
Can my PC elect S-Corporation Status?
Yes, a PC can elect S-Corporation status as long as it complies with the rules of electing S-Corporation Status. Click here (insert link: https://www.accumera.com/s-corporation/) for more information about S-Corporation election.
What is the organizational structure of a PC?
Professional Corporations are organized by shareholders, directors, and officers. The shareholders, own the company and elect the directors who are the ones who are in charge of the decision making for the company. The officers of the company are elected by the directors are the ones that are in charge of managing the everyday operations of the company.
Am I required to hold annual corporate meetings?
States require that all PC’s hold annual meetings with shareholders and directors and record the minutes of each meeting. The method and date on which these meetings are held is typically recorded in the corporate bylaws. These meetings are held to elect new directors or officers and discuss any other business the company has. By following this formality the corporation will maintain its corporate identity/protection. Contact us if you would like assistance with drafting your annual corporate minutes.