“Professional services” means any type of professional services that may be lawfully rendered only pursuant to a license,certification, or registration authorized by the Business and Professions Code, the Chiropractic Act, or the Osteopathic Act.   A professional corporation may render its professional services only through individuals who are duly licensed in the particular profession involved.   The corporation itself is subject to regulation by the state agency charged with licensing such professional activity.

Most licensed “professionals” are not permitted to render professional services as an LLC. However, accountants, attorneys, architects, engineers and land surveyors can operate as a limited liability partnership. Authorization for an LLP to engage in the practice of engineering or land surveying terminates on January 1, 2016. Authorization for an LLP to engage in the practice of architecture terminates on January 1, 2019.   Unless the Legislature extends or eliminates these termination dates, an engineering or land surveying LLP will have to reorganize as another entity before 2016, and an architecture LLP will have to reorganize as another entity before 2019.

Certain “professionals,” such as engineers and realtors, have always been permitted to conduct their activities as corporations. The Professional Corporations Act does not apply to corporations such as these, which are authorized to render professional services under other provisions of law. Such corporations are not “professional corporations” within the meaning of the Act.

Most professional corporations are required to register with the appropriate governmental agency regulating the profession in which the corporation intends to engage. They are permitted to render professional services only while a current certificate of registration is in effect. Medical, dental, veterinary, architectural and certain other specified corporations are exempt from this requirement.

The shares of capital stock of a professional corporation may be issued only to appropriately licensed persons; e.g., the shares of a law corporation may be issued only to active members of the State Bar or to attorneys duly licensed in other states. However, the shares of certain health and welfare-related professional corporations may be issued (subject to ownership restrictions) to members of other designated professions; e.g., licensed optometrists may be shareholders of podiatry corporations.

A shareholder of a professional corporation may have a fiduciary duty, both to the corporation and other shareholders, to comply with share ownership/transfer requirements imposed by law and any shareholder buy-out agreement

We provide the following formation and compliance services to California professional corporations:

  • Formation of California professional corporations for lawyers, dentists, optometrists, doctors, chiropractors, veterinarians, certified public accountants, psychologists, psychiatrists, and architects.
  • Compliance advice concerning the Moscone-Knox Professional Corporation Act and the California Corporations Code.
  • Assistance in obtaining a certificate of registration from the governmental agency regulating the profession.
  • Compliance advice concerning the applicable rules of the California Business and Professions Code
  • Advice concerning corporate governance
  • Drafting of shareholder buy sell agreements for professional corporations
  • Purchase, sale, and merger of professional corporations
  • Protection of trademarks, copyrights, and other intellectual property.
  • Real estate transactions concerning professional practices
  • Zoning and land use concerning n professional practices.

Please call a Los Angeles, California business law attorney to form a California professional corporation for your professional practice and to assist in compliance with the California Corporations and Business & Professions Code and other applicable rules and regulations.