Why Should I Form a Professional Corporation
There are many advantages to forming a Professional Service Corporation. Favorable tax treatments, liability protections, and other benefits provided under the corporate structure. A professional corporation is operated by licensed…
Written by Spiegel & Utrera, P.A.
- Published
- January 13, 2015
- Updated
- August 10, 2026
There are many advantages to forming a Professional Service Corporation.
Favorable tax treatments, liability protections, and other benefits provided under the corporate structure.
A professional corporation is operated by licensed professionals. Depending on your state, these can include:
- Physicians
- Chiropractors
- Dentists
- Veterinarians
- Physical therapists
- Pharmacists
- Registered professional nurses
- Licensed practical nurses
- Licensed midwives
- Podiatrists
- Optometrists and opticians
- Engineering and land surveyors
- Architects and landscape architects
- Public accountants
- Shorthand reporters
- Psychologists
- Social workers
- Massage therapists
- Occupational therapists
- Dietitians and nutritionists
- Speech language pathologists and audiologists
- Acupuncturists
- Interior designers
- Athletic trainers
- Mental health practitioners
- Respiratory therapists
Who Can Be a Shareholder
In general, the shareholders may only be other licensed professionals, or those otherwise legally authorized to render the same professional service as the corporation or professional limited liability company. Of course, employees such as clerks, secretaries, bookkeepers, technicians, and other unlicensed assistants are not considered to be rendering professional services. Likewise, transfers of stock or membership interest may generally only be made to licensed professionals, professional corporations, or professional limited liability companies.
Tax Advantages
The answer is yes. The tax benefit of forming one can be substantial, especially compared to the relatively inexpensive cost of setting it up. There are several tax deductions this type of entity can take that other businesses cannot. For example, the salaries and bonuses paid to owners and employees are tax deductible.
Salaries and bonuses paid to owners and employees are tax deductible.
Consider healthcare. With costs rising, carrying health insurance for yourself and your family has become a necessity. Sole proprietorships and partnerships are currently able to deduct only a portion of their health insurance costs, which can be prohibitive or discourage coverage altogether. A professional corporation, by contrast, can fully deduct the cost of accident and health insurance plans for its employees and their families. That deduction may also extend to reimbursing employees for uninsured medical expenses. Furthermore, it may be able to deduct the cost of life and disability insurance.
Legal Advantages
A professional corporation can be especially important for those who practice in a group or alongside another physician. In that situation, it can protect against personal liability for the negligence of a partner. That is a good reason group practices are often structured as a single entity, or as a partnership of professional corporations with each physician owning his or her own.
We Can Help You Form Yours
Spiegel & Utrera, P.A. lawyers are qualified and highly experienced in forming Professional Service Corporations and Limited Liability Companies. For over 20 years, the firm has served its 260,000 clients with the utmost respect and quality service. Our prices are among the lowest in the industry, and we guarantee top-rated service.
To learn more about forming a Professional Service Corporation, call (800) 603-3900 or visit our Professional Service Corporation page.
Form a Professional Corporation
This article is provided for general information only and is not legal or tax advice, and reading it does not create an attorney-client relationship. The professions eligible to form a professional corporation, and the associated rules, vary by state. Contact Spiegel & Utrera, P.A. for guidance on your specific situation.
