What is a professional corporation considered?

A professional corporation is an entity established by a specific type of professional, such as an attorney, doctor, architect, or veterinarian, to provide a service related to their profession. Professional corporations are registered according to the governing laws of a specific state.

Can professional services be an S Corp?

If you have a professional corporation, you may qualify for pass-through taxation by electing to be treated as an S corporation by the IRS. If your business meets the qualifications, S corporation status allows you to avoid double taxation, thus increasing your net profits.

What is a PC in Illinois?

Professional corporations (PCs) are owned and operated by licensed professionals. Only those who perform services that require a state license can form an Illinois professional corporation.

Who can normally use a professional corporation?

A member of any profession that requires state licensing is eligible (or required in some states) to start a professional corporation if they wish to incorporate. Examples include doctors, lawyers, accountants, architects, civil engineers, cosmetologists, and home inspectors.

What is the purpose of a professional corporation?

Professional corporations provide a limit on the owners’ personal liability for business debts and claims. Incorporating can’t protect a professional against liability for his or her negligence or malpractice, but it can protect against liability for the negligence or malpractice of an associate.

What is the difference between a corporation and a professional corporation?

While traditional corporations their professional corporations are mostly similar, there is one key difference: with professional corporations (such as C Corps), owners are protected from legal claims made against their business, unless the claim was a result of the owner’s own mistake.

What are the advantages and disadvantages of a professional corporation?

The main advantages of organizing as a professional corporation, as outlined above, include tax benefits and transferability of ownership. However, the flat corporate tax rate prevents shareholder/employees from retaining earnings in the professional corporation, which may limit opportunities for expansion and growth.

How do I form a professional corporation in Illinois?

A professional corporation may be incorporated by one or more persons licensed pursuant to the respective profession or an Illinois attorney by filing the Articles of Incorporation (Form BCA 2.10) with the Department of Business Services and by following the procedures for incorporation of businesses described in this …

Can I be my own registered agent in Illinois?

Yes, you can be your own registered agent in Illinois. However, after considering the registered agent requirements most business owners elect to hire a registered agent service instead.