Professional Corporations & Professional Limited Liability Companies

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Professional Corporations & Professional LLCs are business structures that are ideal for certain specialties.

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The Professional Corporation (PC) and Professional Limited Liability Company (PLLC) are the formations of choice for many business owners who work in accounting, law, medicine, architecture, engineering and related fields. These business entities can help licensed professionals protect their personal assets against lawsuits brought against their practices.

State laws vary, but PCs and PLLCs usually share these characteristics:

  • Owners are generally required to be licensed in the same profession.
  • Proof of licensing is often required for state approval.
  • Industry-specific regulations may apply to your company name.
  • States may require entity-specific endings for your company name ("PC" for a Professional Corporation and "PLLC" for a Professional Limited Liability Company, for example).

It's important to note that by forming a Professional Corporation or Professional Limited Liability Company, owners are not free from personal liability for malpractice or other suits brought against them. However, these formation types do protect owners from the malpractice of other owners within the company. Be aware, too, that not all states recognize the PLLC entity.

In addition, PCs and PLLCs are taxed differently. PCs are generally taxed like a C-Corporation, with the PC paying taxes at the corporate rate, which can lead to double taxation. PLLCs, on the other hand, are taxed like LLCs, which generally have pass-through taxation of the members. You may wish to consult with a tax advisor before forming either a PC or PLLC to determine the best tax treatment for your company.

Forming these companies may also require additional steps on the part of the owners. Along with approval from the Secretary of State, professional entities often must seek approval of their formation documents from the state professional licensing body.

incorporate.com can help.

incorporate.com can help doctors, lawyers, architects, accountants, engineers, and other licensed professionals form Professional Corporations and Professional Limited Liability Companies.

Provide us with some basic information about your profession and your business objectives and we will work with you to complete, file and seek approval for a Professional Company or Professional Limited Liability Company formation.

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Get more details about the PC and PLLC business structures in our Frequently Asked Questions section.

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Professional Corporation & LLC FAQs

What are Professional Corporations (PCs) and Professional Limited Liability Companies (PLLCs)?

If you have a license to practice law, accounting, medicine, architecture or another professional service, you may qualify to form a Professional Corporation (PC) or Professional Limited Liability Company (PLLC). These business structures can help licensed professionals protect their personal assets from lawsuits brought against their practice.

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What is the appropriate name ending for a PC or PLLC?

You may need to follow industry-specific regulations for naming your company. Many states require certain endings to your business name, for example, "PC" for a Professional Corporation or "PLLC" for a Professional Limited Liability Company.

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How is a PC or PLLC taxed?

PCs are generally taxed like a c corporation, with the PC paying taxes at the corporate rate, which can lead to double taxation. PLLCs, on the other hand, are taxed like LLCs, which generally have pass-through taxation of the members. You may wish to consult with a tax advisor before forming either a PC or PLLC to determine the best tax treatment for your company.

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Do I need an attorney to form a PC or PLLC?

No. You can prepare and file necessary paperwork yourself, or you can use incorporate.com to incorporate your business. If you are unsure whether incorporating will benefit your business, please call us at 800-818-6082. Our Business Specialists are happy to provide the information you need to make the right decision.

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Are there any restrictions on who can own a PC or PLLC?

In most states, only individuals licensed to practice in the profession for which the PC or PLLC is being formed may be shareholders or members of the PC or PLLC.

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Where should I form my business?

Most companies form the PC or PLLC in the state in which they will primarily operate. Advantages of forming a PC or PLLC in your home state include:

  • Fewer complications, if you only plan to operate the business in your home state
  • No need pay franchise taxes or file annual reports in more than one state
  • Lower cost

Many companies conduct business throughout the United States and abroad. A PC or PLLC with business locations in multiple states may incorporate in a single state, then register (also referred to as qualify) to do business in other states. This means that the PC or PLLC must formally register, file annual reports and pay annual fees in every state in which they provide services. Note, however, that some states require a PC or PLLC to obtain a certificate or other authority from applicable state licensing agencies.

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Is a PC or PLLC required to have a registered agent?

Yes. PC or PLLCs must designate someone to receive official state correspondence and legal notices, called service of process. Most states refer to this delegate as a "Registered Agent." Some states also use the terms "statutory agent" or "resident agent." Some states will not allow a business to serve as its own Registered Agent. Other states allow a company to designate an owner or director as its Registered Agent. However, that agent must:

  • Remain available during normal business hours
  • Maintain a physical address located in the state where the business is registered, and any states where the company is doing business
  • List their name and address in public records

Because of these requirements, most businesses choose to name a third-party Registered Agent, like incorporate.com.

Failure to respond to a legal notice can result in a default judgment against your company. This means that a court can order your business to pay significant penalties without hearing your side of the argument.

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What to Expect After Placing Your Order

  • We will complete the state-required forms and submit them to the Secretary of State.
    • This is done within 24-48 hours of when you place your order.
    • Your signature is required on the documents so we will email them to you and arrange for your signature (Most states require actual signatures for Professional Corporations.)
    • In some instances we may need to verify your personal information, the company directors' information, or, in the case of an LLC, members' information, before forming the entity.
  • The documents are filed at the Secretary of State's office or its equivalent. Turnaround time varies from state to state.
  • Once the Secretary of State issues evidence of filing, we will review the documentation and notify you that an electronic copy of the evidence is ready to be downloaded.
  • If you choose to receive a hard copy of your evidence, we will send it to you via FedEx.
  • If your package includes a Corporate Kit, you will receive your Corporate Kit as a separate package via FedEx.

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