Professional Corporation / Professional Limited Liability Company
The following professionals are required by statute to form a professional corporation or professional limited liability company:
· registered nurses
· marriage and family therapists
· occupational therapists
· speech pathologists and audiologists
· licensed professional counselors
· engineers and land surveyors
· landscape architects
· social workers
· soil scientists
The “professional” designation indicates to the general public that the owner of this business is licensed and regulated by the State of North Carolina. Overall, the corporate governance and taxation are the same as a “regular” corporation or LLC, but there are limits on ownership and extra steps in formation.
With a few limited exceptions, PCs and PLLCs must be owned exclusively by the licensed professional (ie the shareholders and members must be licensed accountants, dentists, engineers, doctors, therapists or other licensed professionals). In addition, at least one officer and one director of a professional corporation must be a licensed professional, and at least one manager of a professional limited liability company must be a licensed professional. These don’t have to be owners as well, just licensed in the profession.
There is an extra step in forming a PC or a PLLC. Before filing your articles of incorporation or articles of organization, you send your proposed articles and an application to your licensing board (along with a fee) for review and certification that you are licensed in good standing to practice your profession. Some boards are pretty quick; others can take weeks to process the request. Once you have the certificate, you submit it to the Secretary of State along with your articles.
PCs and PLLCs are currently not required to file annual reports with the Secretary of State, but must follow all rules of their licensing boards. It is common for the PC or PLLC to have fees due to the licensing board along with the professional as an individual.