Forming a Professional Corporation in California
“California professional corporation” may seem like a generic term for any self-respecting corp, but it’s a particular entity type. Here’s what to know about professional corporations in CA:
What is a California professional corporation?
A professional corporation is a corporation run by licensed professionals. The term “licensed professional” applies to a variety of fields, including medicine, psychology, speech-language pathology, acupuncture, and dentistry, among others. For a full list of “professional services” in California, see California Corporations Code § 13401.5.
Can I form a professional LLC in California?
No. Professional LLCs (PLLCs) are legal in many states, and are often preferable to professional corporations because the LLC model tends to offer liability protection at a lower cost and without all the corporate red tape. However, PLLCs are not recognized in the state of California, so you won’t be able to form a CA PLLC.
How should I name my CA professional corporation?
The California Secretary of State’s office will not accept a corporate name it determines to be “likely to mislead the public.” (See California’s Name Reservations page.) A name may be deemed misleading if it includes a word associated with another business entity or profession, or if it appears too similar to the name of an existing company.
With most businesses in California, it’s best to include a business entity identifier at the end of your business name. For professional corporations, this means adding either “Professional Corporation” or “PC.” It’s also a good idea to search the California Business Professions Code, as there are specific naming requirements associated with some professions.
How do I form a professional corporation in CA?
Forming a professional corporation in California is almost the same as forming a California Corporation. You must secure a registered agent, file formation documents with the CA Secretary of State, and pay a $100 fee. HOWEVER, instead of generic articles of incorporation, make sure to submit Articles of Incorporation for a Professional Corporation.
For more information about professional entities, see Northwest’s page on State-By-State Requirements for Professional Entities in All 50 States.
