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If you’re a certified professional and you want to start a corporation, chances are you’ve heard the term “professional corporation” or PC.

The professional corporation shares many characteristics with traditional corporations, but with a few important distinctions.

The professional corporation is a specialized form of corporation that is intended solely for professionals in certain fields.

While the regulations vary from state to state, in general the PC is used by attorneys, physicians, engineers, architects, accountants, and more. The PC provides a limited form of personal asset protection that distinguishes it from the more comprehensive asset protection provided by traditional corporations.

In this guide, we’ll explain everything you need to know about the professional corporation. Is the PC the right business entity for you? Or is a traditional corporation a better fit?


What Is a Professional Corporation?

A professional corporation is a specialized entity type that’s tailor-made for licensed professionals who want to incorporate together and share their resources.

For example, a team of four doctors (all licensed, of course) decide that they want to form a business together. One option would be a partnership, but a professional corporation also serves their purposes quite nicely. Furthermore, the PC is an entity type that provides far greater protections for its owners than a general partnership does.

When it comes to forming a professional corporation, each state has its own requirements for which licensed professions must incorporate as a PC rather than as a regular corporation.

Most states usually require professionals such as doctors, dentists, accountants, chiropractors, and lawyers to form as a professional corporation. Many of these professions are service businesses, which is why the PC is sometimes referred to as a professional service corporation.

So, what makes a professional corporation different from a regular corporation? There’s the difference of who can form one, of course, but there’s a deeper distinction, too: the liability of each shareholder. Let’s dig deeper into liability.


How Does Personal Liability Work in a Professional Corporation?

On the surface, a professional corporation looks just like a regular corporation. After all, both a corporation and a professional corporation have to write bylaws, hold shareholder meetings, pay corporate income taxes, and more. The only time the business really looks different is when malpractice occurs.

In a professional corporation, each shareholder has some protection from liability, so if the business goes into debt, the shareholders likely won’t be expected to pay up the difference. But unlike a regular corporation, a shareholder in a professional corporation can be sued for malpractice.

For example, if a doctor in a PC messes up a surgery, that doctor can be sued for damages. In any other incorporated entity, the shareholders cannot be individually sued, but in the professional corporation, each shareholder can be sued for their own malpractice.

Thankfully, though, the other shareholders do not have to pay up for the malpractice of their coworkers, because each shareholder is only liable for his or her own professional mistakes.

Being liable for malpractice keeps each professional accountable for the standards that apply to their industry. If these professionals could hide behind the corporate veil, then the state regulations for that industry lose their power. But with the possibility to be sued, all shareholders know that they still have to follow those regulations.


How Do I Form a Professional Corporation?

Forming a professional corporation looks similar in many ways to forming a regular corporation. That said, there are a few extra steps you’ll need to cover first.

The biggest step is learning the requirements in your state. As we’ve mentioned, each state has its own standards for which professions need to form as a PC, as well as varying requirements for who is allowed to form one. You need to check these requirements before you form your business.

After you learn what your state requires, you’ll also need to ensure that each shareholder involved in your business has the licenses they need. Then, you can start on the same filings required for a standard corporation: the articles of incorporation, corporate bylaws, and more. In some states, you need to get these documents approved by your state licensing board before submitting them to the state.

For a fuller understanding of forming a professional corporation, we recommend that you contact your Secretary of State. They can point you toward documents you need, along with the state-specific policies for PCs, licensing, and more.


Hiring an Incorporation Service for a PC

If forming your own professional corporation sounds too daunting, there are other options. You could hire a lawyer to form your business, although this option is typically quite expensive, and the costs can be somewhat unmanageable for startups on tight budgets.

If you can’t afford a lawyer, or simply don’t want to spend that much money on incorporating your business, we recommend hiring an online incorporation service. For example, MyCorporation provides reliable and trustworthy incorporation service for professional corporations, with a reasonable price point of $99, plus state fee.

In addition to incorporating your business, MyCorporation will also provide you with a customizable corporate bylaws form, meeting minutes, and sample stock certificates. It’s an affordable incorporation package that will get your PC started on the right track.



A professional corporation is a unique entity type that helps licensed professionals gain the advantage of incorporating a business.

Essentially, the professional corporation keeps each shareholder in the corporation liable for their own malpractice, but it still gives them most of the advantages of an incorporated business. In addition, all of the PC’s owners share personal asset protection regarding common general business functions.

Before you start incorporating your own professional corporation, we would simply like to remind you that the rules and regulations for this entity type do vary somewhat from state to state, so if you have any state-specific questions, you should direct them to your state’s Secretary of State office.

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