At the Piatchek Law Firm, our attorneys assist clients with a variety of concerns regarding professional corporations. A professional corporation (PC) is similar to a regular corporation, but it is designed for only specific “professional” services. Professions that are allowed to form as a PC under Missouri law include the following: accountants, architects, engineers, attorneys, dentists, physicians, veterinarians, real estate salespeople, and registered nurses.
A certificate of the licensing authority of the subject profession is required along with the articles of incorporation. All members of a professional corporation, excluding the secretary, must also be a qualified professional of the business. For example, a doctor could not include his or her spouse unless he/she was also a doctor.
Why Form a Professional Corporation?
The main reason to form a corporation is to shield personal assets from the business’s debts and potential lawsuits. In the past, many states prohibited certain personal service professionals from incorporating, because it was thought unfair for them to be shielded from the consequences of their mistakes. Fortunately for these professionals, many states, including Missouri, have altered their laws to allow professionals to incorporate. However, professional corporations are subject to a special set of rules.
Professional Corporations and Liability
When a professional individual, such as a doctor or registered nurse, forms a professional corporation, they are granted a certain amount of limited liability. They will not be liable for the mistakes or debts accrued by other shareholders in the corporation – other doctors or nurses, for example – but they will remain liable for the losses caused by their own carelessness. For this reason, forming a professional corporation is not a substitute for professional liability insurance. A doctor who is a shareholder in a professional corporation still needs to purchase their own medical malpractice insurance.
Form Your Professional Corporation Today
Because of the very technical and complex rules concerning business organizations, you should always consult an attorney for advice and assistance concerning business entities. For assistance setting up or managing a professional corporation, call us at 417-882-5858 to schedule your complimentary consultation.