Professional licensed businesses require a specialized kind of entity, often needed for certain professionals such as engineers, attorneys, doctors, accountants, and more. These professionals require specialized services because they can’t form normal corporations or certain other kinds of businesses – there are very specific legal restrictions and requirements that must be met. Failure to prepare the right kind of business can result in jeopardizing the professional’s license. This is why it is best to work with a legal firm with related experience, such as the Veterans Business Law Group.
Our team offers extensive experience and the specialized skill set you need for the formation of a professionally licensed business, which most commonly is the professional corporation. Contact us for information about the available services.
When establishing a professional corporation, it is necessary to consider the state laws where the corporation is formed. In most states, there are limitations to the types of people who can create a professional corporation. Additionally, the corporation itself may also need to hold the appropriate licensure in the state. The purpose of the corporation should be for providing professional services.
California, for example, has extensive limitations regarding who are permitted directors, officers, and shareholders in the corporation. For example, all shareholders must be in the same profession and must carry the license according to the specific services the corporation will be offering. The purpose is to ensure that shareholders are service providers, instead of investors. As an example, only attorneys can be shareholders of a law firm – someone cannot be an investing partner if they aren’t a licensed attorney where the corporation will be providing legal services. This is also similar for medical practices, dental offices, and accounting firms. However, the rules may vary from profession to profession, so it is crucial to consult with a law firm with extensive experience working with professionally licensed businesses to avoid major complications after the business has been formed.
Specific documents need to be drafted for the formation of a professional corporation. These are the general guidelines that need to be followed, along with state-specific requirements:
A variety of other factors need to be considered with the formation of a professional corporation, such as handling stock shares, taxation, partnership changes, and more. An experienced legal team, such as the VBLG, can offer ongoing support and advice to ensure compliance with your corporation. For information about the available legal services, call us at (951) 594-9456.