Are you looking to start a professional corporation in Oklahoma, but you’re not sure where to start?
Professional corporations are those owned and operated by licensed professionals, like doctors, lawyers, and architects. There are quite a few important steps you’ll need to take to create your Oklahoma professional corporation and maintain it, so this guide will outline the rules and regulations involved with this process.
We’ll cover everything you need to know, from picking names, choosing a board, navigating taxes, and more. To get started, please reference our guide below or hire a professional online incorporation service.
What is an Oklahoma Professional Corporation?
On the surface, a professional corporation and a regular corporation look very similar. Both businesses can issue stock, both have bylaws, and both are governed by a board of directors and an executive team. Both pay corporate income taxes, too.
And more importantly, both corporation types offer personal asset protection. Simply put, a shareholder or member of the business isn’t liable for the business’s debts. So a member of the corporation can’t be sued; the corporation is sued. However, in a professional corporation, there’s one exception: individual members can be sued for malpractice.
That’s especially important because professional corporations usually offer professional services, such as lawyers, dentists, doctors, chiropractors, and more. All of those trades can be sued for malpractice. But in a PC, only the person responsible for the malpractice can be sued. That makes it a better option for most professionals.
In Ohio, a corporation is only allowed to offer professional services and organize as a professional corporation if every person with a vested interest in the corporation is licensed in the PC’s profession. This applies to shareholders, too, so while a PC can’t do as much fundraising, the advantage of liability protection remains.
7 Steps to Start a Professional Corporation in Oklahoma
Now let’s jump into the specific steps you’ll need to take to form a professional corporation in Oklahoma. Later on in this guide, we’ll discuss the steps you need to take in order to maintain your corporation in Oklahoma. But let’s start at the beginning.
1. Select Your Board of Directors
A professional corporation is only as good as its board of directors, so you’ll want to appoint carefully. And while the bulk of people involved in the day-to-day operations of your business will be licensed in your profession, we recommend having your board be a bit more diverse.
For example, a dental PC might want a director with legal experience, one with business growth expertise, a financial expert, and so on. This gives you diverse input to help the business succeed.
Oklahoma also makes it pretty simple to choose your board because there isn’t a long list of rules for your board. The only explicit requirements are that you must have at least one director at all times, and your director(s) should be licensed. As long as you meet those minimum requirements, you can set out all the remaining terms for your board in your company bylaws.
2. Designate a Registered Agent
Every Oklahoma professional corporation—and even other entity types—must appoint a registered agent. This individual accepts “service of process” from the state on your behalf. Basically, if the state ever needs to notify you regarding a lawsuit or an upcoming annual report due date, they’ll contact your registered agent. Your agent forwards that notice to you.
Oklahoma has a few legal requirements for your registered agent, though:
- Every entity that files with the Secretary of State (both domestic and foreign) must appoint a registered agent
- The agent must be an individual resident of Oklahoma OR a business entity with authority to operate in the state
- An agent must be continuously maintained
You can find a full rundown of the state laws in the Corporations Chapter of the Oklahoma Statutes.
Technically, you can serve as your own registered agent, but we don’t recommend that. First, you’ll be busy running the day-to-day affairs of your corporation. It’s also important to note that the registered agent’s address goes on the public record; some entrepreneurs are uncomfortable with that idea. Because of that, it’s a good idea to appoint a third party, like an individual that you trust or one of our top registered agent services.
3. Choose a Name for Your Corporation
Technically, you can complete this step at any point during the process, but we’ve put it here—depending on how involved your board of directors or fellow incorporators are, they may want to be involved in the naming process.
Choosing a name can be one of the most fun—and challenging—parts of starting a PC. There are a few things to keep in mind when picking a name.
Meet Oklahoma’s Legal Requirements
The trickiest part of naming a business is adhering to the state’s legal requirements for naming a business. Thankfully, Oklahoma keeps its laws relatively simple:
- Your name must include the words “professional corporation” (abbreviations are also permitted)
- Names “shall not so nearly resemble the name of another association or federal association as to be likely to deceive the public;” in short, your name must be unique
You can find more details about business names in the state’s naming statutes or get started by doing a name search.
Pick a Descriptive Name That You Like
As long as you meet legal requirements, you have a lot of leeway to pick the perfect name for your professional corporation. In general, you should choose a name that’s memorable, describes what your business does, and is easy to say and remember. More importantly, you should pick a name that you and your team likes. You should feel good when you tell other people about your business, and your name is a big part of that.
You can also reserve your name with the Application for Reservation of Name form. This procedure costs $10, but it protects your name for 60 days. That buys you time for other business start-up steps. After all the work to create a name, you don’t want to lose it to another business.
4. File your Articles of Incorporation
Now that you have your board, agent, and name all lined up, you’re all set to file your Certificate of Incorporation. This two-page document is what officially forms your business in Oklahoma, and it requires some foundational data about your business. This is the information you’ll need to provide:
- The name of your corporation
- Name and address of your registered agent
- Email address for the business’s primary contact person
- Duration of the business
- The number, class, and value of the shares your PC will offer
- Purpose for the PC
- Name and address of at least one incorporator
- Signature of each incorporator
All told, this form is pretty simple to complete; simply fill in the requested information, and you’ll be set to go. If you prefer, you can also file this form online. Either way, you’ll need to have funds on hand to pay the filing fee. The minimum fee is $50, but it can rise above that depending on how much stock you issue.
5. Establish Your Corporate Record & Hold Your First Board Meeting
Now that your professional corporation officially exists, it’s time to establish your corporate record. Your board of directors will help you do this during your first board meeting.
The very first step you’ll take is drafting your bylaws. Oklahoma doesn’t dictate a lot of legal requirements for the day-to-day operations of your business, so that’s where your bylaws will come in. Your bylaws are basically the operating manual for your business: how the board is appointed and maintained, shareholder policies and distributions, how officers are appointed, and much more. Every PC will have slightly different bylaws, but it’s essential to have them.
In addition to creating bylaws, at your first meeting, you’ll want to appoint someone to take minutes at each meeting. These minutes form another vital part of your corporate record, summarizing all important activities and decisions.
Other important tasks for your first meeting include appointing officers, drafting a conflict of interest policy, establishing committees (if applicable), and more. No two board meetings are exactly alike, but the first one is a crucial (and busy) one.
6. Obtain Business Licenses
As a professional corporation, you won’t be a stranger to the licenses required by your industry. But we’d be remiss not to remind you of them!
In Oklahoma, every individual with a vested interest in your PC (usually shareholders and directors) must be licensed in the PC’s profession. Employees are only required to maintain a license if they’re offering the PC’s service. If any members of your organization need to renew or obtain a license, then Oklahoma Commerce is a great place to get started.
Some states also require a general business license on top of professional licenses, but Oklahoma doesn’t. That said, we recommend double-checking with your city or county to see if there are any local licenses. A good starting point is to read our guide to OK business licenses.
7. Set up a Business Bank Account
If you don’t already have one, it’s time to get a business bank account. This enables you to ensure that your business funds and personal funds are always separate—an essential distinction to maintain your personal asset protection. Most banks will ask to see your bylaws (and maybe even your formation documents) as part of this process.
You can also look into getting a business credit card if you feel your company is ready for that step.
3 Steps to Maintain Your Oklahoma Professional Corporation
Now that your business is up and running, it’s time to maintain it compliantly. There are three major areas you’ll want to tackle (or plan ahead for): taxes, insurance, and annual reporting.
1. Prepare for Taxes
Taxes are a fact of life for a corporation. Before you do anything else, we recommend obtaining an EIN, or an Employer Identification Number—even if you don’t have employees. That’s because an EIN acts like a social security number for a business. What’s more, it’s free (and quick) to obtain through the IRS.
After that, if you have employees, you’ll want to anticipate your contributions to unemployment insurance taxes and withholding taxes on the state and federal levels.
And of course, there are corporate income taxes to account for (21% for federal taxes and 6% for state ones). These taxes are arguably the biggest expense a corporation will face in a given year. Income taxes are supplemented by Oklahoma’s miscellaneous industry taxes: motor fuel and tobacco are just a few of them. You can find more information on miscellaneous taxes with Oklahoma Tax Commission.
Not every tax will apply to your Oklahoma PC, and this is not an exhaustive list. Taxes are complicated and vary significantly depending on your business. We highly recommend consulting with a tax professional to ensure that you’ve covered all of your responsibilities.
To keep things organized and simple for all things tax, we recommend setting up an accounting software and working with a qualified professional.
2. Obtain Business Insurance
In addition to the malpractice insurance that each practitioner maintains, we highly recommend maintaining a general liability insurance policy for the business as a whole.
Lots of things can go wrong: fallen trees at your physical location, a fall on your property, malfunctioning equipment…it’s a long list. This general policy isn’t required by Oklahoma law, but we recommend it so you’re protected no matter what. Accidents and natural disasters can be very expensive.
Oklahoma does require one insurance policy, though: workers’ compensation. Any Oklahoma business with employees must maintain one of these policies. For more information on this requirement, please consult the Oklahoma Workers’ Compensation Commission.
3. Anticipate Your Annual Report
All businesses in Oklahoma are required to submit an annual filing; in other states, it’s called the annual report, but Oklahoma requires corporations to make this filing in conjunction with the Annual Franchise Tax. Not only does this filing pay your taxes for the privilege of doing business in the state, but it also updates the state regarding any information about your business that may have changed over the course of the year.
This report is a very simple online filing. The filing fee will vary depending on your business’s financial status for the year; it’s due July 1st. This form might not seem like much, but don’t overlook it; late or delinquent filings can cause a lot of hassle. If you’d prefer to have a service handle this obligation for you, there are a handful of reliable report filing services.
Getting Help With Your Oklahoma Professional Corporation
Feeling overwhelmed or just need an extra hand? Here are some of our favorite resources for Oklahoma professional corporations.
Online Incorporation Services
If you would like to hire an affordable business incorporation service to create your professional corporation for you, services like LegalZoom, Rocket Lawyer and Swyft Filings can help you out. These service providers can handle most of the formation process, while still charging much lower rates than a business attorney’s fees.
There isn’t the same level of personalization that a lawyer can provide, but online incorporation services can still be a tremendous help. The only major issue with these service providers is the fact that they can’t provide any actual legal advice, so you need to know what you want ahead of time.
Oklahoma Business Attorneys
There are some situations where hiring a business lawyer is a preferable route to using an online incorporation service. The professional corporation as a business structure can be highly complicated and specialized, and if you want to have the peace of mind that every single step was taken care of by a true expert, hiring a business attorney to form your Oklahoma professional corporation is the way to go.
If you would like to pursue this route, there are some convenient services that can help you choose the right lawyer for your business. We like to use Avvo, which has extensive reviews and ratings for hundreds of Oklahoma business lawyers, which can make it much easier to select an attorney who has your best interests in mind and also has the expertise to get the job done right.
Frequently Asked Questions
Can I speed up the process?
Processing speeds for Oklahoma are best if you use online filings; electronic documents are turned around in 1 or 2 days, while mail-order documents usually take 1 to 2 weeks. Oklahoma doesn’t offer traditional expediting options (just in-person drop-off for paper forms), so if you’re in a rush, we recommend filing online.
Can an Oklahoma professional corporation elect S-corporation status?
In most states, there’s a big advantage to electing S-corporation status, which allows a corporation to be taxed more like a pass-through entity. Since individual income taxes are often lighter than corporate ones, this election can reduce your tax burden. To qualify for this status, a corporation must have 100 or fewer shareholders and only one class of stock.
Oklahoma PCs can apply for this status with the IRS using Form 2553. Exactly how much of an advantage it poses depends on your personal income, though; for some PCs, being taxed as a corporation is better. Most gain a significant advantage from S-corporation status. We recommend consulting with a tax professional to learn which option is right for your unique business.
Do I have to file my corporate record with the state?
Oklahoma does not require you to file your corporate record with the Secretary of State; you’re simply required to keep one. Most professional corporations choose to keep a classic binder with these records, but you can pick the method that works for you. Just ensure that it’s accessible somewhere onsite, and you’ll be able to add to it or consult it as needed.
What’s the difference between a PLLC and a PC? Can I form one in Oklahoma?
A PLLC, or Professional Limited Liability Company, is an LLC formed by professionals in regulated industries. Some states, Oklahoma included, offer it as an alternative to the PC because LLCs are a little easier to run (and have tax advantages over corporations). In Oklahoma, you can pick the option that works best for your business’s unique needs.
Are incorporation services like ZenBusiness and Northwest worth it?
That depends on what your needs are. If you want to keep your expenses as low as possible, then you might find yourself bewildered by the state fee and the service’s package fees put together. But if you don’t want to endure the hassle of dealing with paperwork, or you simply want a teammate to help you through the process, a service may be a big help to you.
Another important note is that neither ZenBusiness or Northwest file professional corporations. Yes, they are ideal if you’re looking to form a regular corporation or an LLC, but not professional corporations.
Should I hire a business attorney to help with my PC?
Ideally, yes (if you can afford it). But a business-lawyer relationship is a very important one, and you’ll want to find a lawyer that fits your budget, your personality, your industry, and so on. One of our favorite tools for Oklahoma businesses is Avvo.com, where you can find lawyers in your city, based on the best customer reviews, and several other helpful filters. It’s a helpful tool.
Form a Professional Corporation in all States
We break down the professional corporation process in every state. View all of our guides below.
- Alabama Professional Corporation
- Alaska Professional Corporation
- Arizona Professional Corporation
- Arkansas Professional Corporation
- California Professional Corporation
- Colorado Professional Corporation
- Connecticut Professional Corporation
- Delaware Professional Corporation
- Florida Professional Corporation
- Georgia Professional Corporation
- Hawaii Professional Corporation
- Idaho Professional Corporation
- Illinois Professional Corporation
- Indiana Professional Corporation
- Iowa Professional Corporation
- Kansas Professional Corporation
- Kentucky Professional Corporation
- Louisiana Professional Corporation
- Maine Professional Corporation
- Maryland Professional Corporation
- Massachusetts Professional Corporation
- Michigan Professional Corporation
- Minnesota Professional Corporation
- Mississippi Professional Corporation
- Missouri Professional Corporation
- Montana Professional Corporation
- Nebraska Professional Corporation
- Nevada Professional Corporation
- New Hampshire Professional Corporation
- New Jersey Professional Corporation
- New Mexico Professional Corporation
- New York Professional Corporation
- North Carolina Professional Corporation
- North Dakota Professional Corporation
- Ohio Professional Corporation
- Oregon Professional Corporation
- Pennsylvania Professional Corporation
- Rhode Island Professional Corporation
- South Carolina Professional Corporation
- South Dakota Professional Corporation
- Tennessee Professional Corporation
- Texas Professional Corporation
- Utah Professional Corporation
- Vermont Professional Corporation
- Virginia Professional Corporation
- Washington D.C. Professional Corporation
- Washington Professional Corporation
- West Virginia Professional Corporation
- Wisconsin Professional Corporation
- Wyoming Professional Corporation