One of the primary reasons for establishing a professional corporation may be to limit liability. It is imperative that you determine what the rules are in your state because individual states may not allow limits on liability even with a professional corporation designation.
What is a professional corporation used for?
Professional corporations provide a limit on the owners’ personal liability for business debts and claims. Incorporating can’t protect a professional against liability for his or her negligence or malpractice, but it can protect against liability for the negligence or malpractice of an associate.
What’s the difference between an LLC and a professional corporation?
The difference between LLC and PC is straightforward. A limited liability company (LLC) combines the tax benefits of a partnership and the limited liability protection of a corporation. A professional corporation (PC) is organized according to the laws of the state where the professional is licensed to practice.
Can a professional corporation be a Service Corporation?
And in all states, certain professionals are allowed to form professional corporations or professional service corporations. The list of professionals required to incorporate as a professional corporation is different in each state.
Are there any restrictions on a professional corporation?
While most corporations do have some restrictions placed on them, there are specific restrictions that apply to professional corporations. Since this is not a comprehensive list, it is a good idea to determine which restrictions exist in your state. Licensing – Only those who are licensed to practice the specific service may incorporate.
Can a professional corporation have more than one license?
No dual practices – In some cases, a group of people may hold more than one license. For example, a group of attorneys may also be licensed to provide accounting services. If the professional corporation is set up for the purposes of providing legal services, they may not provide accounting services.
What makes a Personal Service Corporation a PSC?
A personal service corporation (PSC) is a specific taxing entity recognized by the IRS. The IRS requirements for a personal services corporation are (over-simplified) as the principal activity must be providing personal services, in the fields of.
