Professional Corporations

[row] [span12] [label style=”inverse”]Professional corporations are special entities under Ohio law.[/label] [/span12] [/row] [row] [span12] The designation was created many years ago to permit people practicing in specified professional services to enjoy certain tax benefits available only to corporations. At that time, the bodies that regulated these professions did not let their members incorporate, so the legislature stepped in and created this type of corporation for those fields. Only parties licensed in the specified professions may own stock in a professional corporation.
[/span12] [/row] [spacer] [row] [span6] [label]These are the professions that may organize as a professional corporation under Ohio Revised Code:[/label] [/span6] [span6] [caret_list]
  • Architects
  • Attorneys
  • Certified public accountants
  • Chiropractors
  • Chiropractors practicing acupuncture through the state chiropractic board
  • Occupational therapists
  • Professional engineers
  • Professionals in various branches of medicine
  • Physical therapists
  • Veterinarians
[/caret_list] [/span6] [/row] [row] [span12] Because Ohio law now allows these types of professionals to form LLCs, C corporations, and S corporations, business law attorneys are rarely asked to set up professional corporations anymore. These more customary entities do not require the filing of a biennial report with the Ohio Secretary of State identifying all of the shareholders and certifying that each is licensed in his or her specific discipline. In addition to being an additional administrative burden (one that is easy to forget about), this requirement of a professional corporation also denies shareholders the anonymity granted to every other type of equity owner in the state of Ohio.
With the evolution of the tax and state corporate laws, it is unlikely that forming a professional corporation right for your business. Business law attorney Steve Sneiderman, however, is well versed in the pros and cons of this and other business entities and will analyze them with you. Contact him today to discuss the possibilities and find the right structure for your business.
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