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Ask the Lawyer: November 2011
Our lawyer tells us that as a Professional Corporation we must have an end-of-the-year meeting and take minutes in order to follow corporate protocol. What is the difference between a Professional Corporation and a Professional Limited Liability Company?
A Professional Corporation is an organization formed with state government approval to carry on business. It is also approved by the appropriate professional licensing board of the parties forming the Corporation. There are actually subsets of Corporations — S Corporations C Corporations. The S corporation is a small business corporation whose owners have elected to be treated a certain way by the IRS. There are restrictions on S corporations, such as how many owners, type of stock, etc. The C Corporation has no restrictions.
A Professional Limited Liability Company is professional entity made up of owners from one discipline. It must also be approved by the licensing board for that discipline. Examples of licensing boards are the North Carolina Board of Dental Examiners Dentists and the North Carolina Medical Board for Physicians. The LLC is a very flexible form of doing business, where its owners are limited in their liability according to what they have contributed to the entity. Owners can be taxed several different ways. Owners may choose how to be taxed.
We will continue talking more about different corporate structures next month.
This article is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. The information contained in this article does not create an attorney-client relationship between Karen McKeithen Schaede Attorney at Law, PLLC and the reader.