California Requirements For a Professional Corporation

A professional corporation (PC) is a type of legal structure specifically designed for licensed professionals such as doctors, lawyers, accountants, and architects. It is a business entity that is typically formed by professionals who want to provide their services through a corporation rather than as individuals because this provides additional tax and liability advantages. California has some specific requirements for forming a professional corporation. Here are some of the requirements that must be met:


Each individual forming the professional corporation and all shareholders must be licensed within the same field. The business must also have a primary focus on providing services within that profession, and it must maintain a list of shareholders and their license numbers.

Corporate Name

The name of the professional corporation must include the words “Professional Corporation” or the abbreviation “P.C.” The name must also comply with California’s corporate name requirements, which include avoiding misleading or similar names to existing corporations. This is why it’s common to see professional corporations incorporate individual partner names as the business name.


Incorporation Documents

The professional corporation file articles of incorporation with the California Secretary of State. The articles of incorporation must include the name of the corporation, the names and addresses of the incorporators, the number of shares the corporation is authorized to issue, and the purpose of the corporation.


Corporate Bylaws

The professional corporation must adopt bylaws that set forth the rules and procedures for the corporation’s internal governance. The bylaws must be consistent with California law and the articles of incorporation.


Professional Liability Insurance

In California, a professional corporation must carry professional liability insurance to protect its clients from any errors or omissions committed during the provision of service. The amount of insurance required may vary depending on the type of services provided, but it should cover enough to protect each shareholder and founder from personal liability.


Annual Reports

The professional corporation must file annual reports with the California Secretary of State, which include information about the corporation’s shareholders, directors, and officers.


Getting Help

The specific requirements can vary depending on the type of profession and who is involved, and it is important to make sure you are in compliance with these requirements in order to avoid any additional fines and liabilities. Integrated General Counsel is experienced in business & employment law, entity formation, litigation, and more. If you are seeking legal guidance for your business, contact our firm at (925) 399-1529 (1LAW) for a free consultation.

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