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A professional corporation (PC) is a corporation that provides organized to provide services by professionals that must have a state license. (Some states refer to a professional corporation as a professional association (PA) or a service corporation (SC).) Many states also allow licensed professionals to form a Professional Limited Liability Company (PLLC). A PLLC provides more flexibility to the owners than that permitted with a professional corporation.
Although what professions must be licensed varies among the states, typically they include:
The Articles of Incorporation for a professional corporation are similar to those of a standard corporation. In addition, every professional corporation must appoint and maintain a registered agent for the business. However, there are several significant differences from regular corporations.
Very similar rules apply to the formation of a PLLC.
Once you have formed your professional corporation, you must comply with the ongoing corporate compliance responsibilities, such as issuing shares, adopting bylaws, electing directors, holding meetings, filing annual reports, and maintaining a registered agent. While a PLLC generally has fewer state-mandated responsibilities, all states require that the PLLC maintain an in-state registered agent and most require the PLLC to file annual reports. Although it is not required by the state, it is strongly recommended that the members of a PLLC adopt a written operating agreement that defines the members' rights and responsibilities, details the process joining or leaving the PLLC, and provides rules for the management and operation of the PLLC.
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