Certain regulated professions with governing bodies require a special type of corporate registration if you wish to work in the field using a corporation. A Professional Corporation features restrictions and provisions, dictated by the governing body, that prevent the owners from abusing the limited liability provided by a typical business corporation. This ensures accountability in the field and allows the governing bodies to maintain the high standards and esteem of their respective professions.
Regulated professionals who wish to incorporate their practices should consult their governing body for conditions of incorporation specific to their profession. Some regulators may also have specific naming requirements.
- A professional corporation is formed in the same manner as a business corporation, except that it typically has one or several of the following additional limitations, depending on the jurisdiction:
- All shares of stock of the corporation (or a minimum percentage) must be owned and held by individuals licensed in the profession of the corporation.
- At least one incorporator must be licensed in the profession.
- At least one director (or a majority, or even exclusively) must be licensed in the profession.
- The articles of incorporation, in addition to all other requirements, must limit the activities of the corporation to those specific to the profession.
Professional corporations may be subject to additional limitations and regulations imposed by their respective professional bodies. Check with your governing College, Society or Association for more details.
Read about How to Incorporate.
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