Professional Entities Management

Professional Entities Management

Professional Corporation (PC)

Shareholders
The rights and responsibilities of shareholders in a professional corporation are mostly the same as in a business corporation.

Shareholders have restrictions on transferring their shares to anyone who is not a licensed professional practicing the same profession as the corporation.

Requirements are usually imposed on a shareholder who becomes disqualified to practice, or dies, to sell the shares back to the corporation or other shareholders.

Directors
The duties and responsibilities of directors in a professional corporation are the same as in a business corporation.

All directors are usually required to be licensed professionals, though some states permit certain related healing arts professionals to become directors and shareholders in the same corporation.

Officers
Every state requires at least a president and secretary and most every state requires a treasurer or chief financial officer as well.

One person may fill more than one, or even every, office position. Where there are two or more licensed professionals in a corporation, they are usually required to fill all office positions.
                                          

Professional Limited Liability Company (PLLC)

Members

Members in a PLLC must all be individuals and all must generally be licensed in the same profession.

It is possible that a member in a PLLC could be a professional corporation where the shareholder(s) practiced in the same profession as the other PLLC members rather than an individual member unless the formation state laws or licensing board regulations required only individual licensed members.

A PLLC may be formed with only a single member thereby providing the owner with limited liability protection (with the limitations discussed above) not offered by a sole proprietorship. When there are multiple members, the structure is much like a partnership.

Subject to any restrictions or requirements imposed by the formation state laws or licensing agency regulations for a PLLC, the members have great flexibility through a written operating agreement to define their respective rights and responsibilities, powers, profit and loss-sharing arrangements, and rights or restrictions on transferring ownership interests.