Professional corporations (PCs) are business structures designated for people who provide services that have licensing requirements. If you have a professional license and want to start your own business, here’s how you can form your own Kansas professional corporation.
Is a Kansas professional corporation structure right for you?
Depending on your professional field, you might need to form a PC for legal reasons. All businesses should consider a formal entity structure, but there are some that would do better as a corporation than other types. See the ZenBusiness entity guide to see what’s right for you.
A PC offers more liability protection than a professional limited liability company (PLLC). PCs are designed for skilled professionals who are licensed by the state, such as accountants, attorneys, engineers, and medical providers.
How will ownership be divided?
PCs are owned by shareholders. Decide what role each shareholder will have and make decisions about the distribution of ownership before starting any paperwork. Doing so will help avoid issues later.
How will the professional corporation be managed?
A board of directors is responsible for managing the corporation. The directors need to agree about management, establish a chain of command, and set up rules on how to operate.
Choose a name for your Kansas professional corporation
The name you choose for your PC needs to meet certain legal requirements. It must include “chartered” or “professional association” or “P.A.” Professional corporations can’t have a name that conflicts with state law or professional ethic standards.
Once you find the name that you want, you have the option to reserve it for your professional corporation until you’re ready to file your Articles of Incorporation. We offer a business name registration service to help you find and reserve an official name that isn’t already taken. The name will be held for 120 days. You can also complete this process through the Secretary of State.
You’ll likely want a website that matches your business name as closely as possible. You can use the ZenBusiness domain search tool to see whether the website name you want is available.
Select a Kansas resident agent
To do business in Kansas, your PC will need a resident agent, called a registered agent in other states, on record with the state. The agent must have a physical office in the state, always be available during regular business hours, and be authorized to work in the state. Your resident agent will receive any documents from the Kansas Secretary of State as well as notices about lawsuits and other legal issues.
ZenBusiness offers registered agent services through our trusted partners. This eliminates the need for you to be on-site during business hours while keeping your business in good standing.
Complete your Kansas Articles of Incorporation
Before your PC becomes a legitimate business, you’ll need to file your Articles of Incorporation with the Secretary of State of Kansas. There’s a $90 filing fee payable by check or money order if applying by mail. Filings can also be submitted online through KanAccess for $85.
Articles of Incorporation contain important information about your business, including the corporate name, number of authorized shares, and names and addresses of incorporators and the initial directors.
Establish a corporate record in Kansas
PCs must maintain certain records to comply with policies imposed by the Secretary of State and the Internal Revenue Service. These documents include financial records, transaction statements, board meeting minutes, and other details that may be needed for financial reports and audits.
Designate a board of directors
The board of directors is crucial to the success of your corporation. Directors can appoint officers to perform specific roles within the PC. They also make decisions about how the business operates. Ideally, they’re highly experienced in their industries, which helps PCs stay in compliance.
Create Kansas corporate bylaws
Your PC will need to create a set of internal bylaws that determines how the organization is managed and operated as well as crucial issues such as when and where the PC’s board of directors meet and how they are elected.
Hold first board meeting
The first board meeting is one of the most important for your PC. Your board members will meet to finalize decisions about corporate bylaws, officers, and details pertaining to the formation of the company itself. Make sure to document and record everything since these decisions will become part of the corporate record.
Handle Kansas tax obligations
Complying with tax requirements is a must if you want to avoid problems with the IRS and the Kansas Department of Revenue. Your PC will have to pay taxes on multiple levels to fulfill its obligations to the government. You should enlist the help of a lawyer or an accountant to make sure that your business meets all requirements.
Your PC will need to pay taxes to the IRS. Depending on what industry you’re involved in, these taxes will vary. You’ll also need a federal Employer Identification Number (EIN) to complete your tax returns. If you don’t have one, ZenBusiness can help you get one from the IRS.
Kansas state law mandates different tax requirements for businesses in different industries. Corporate income tax rates start at 4% with a surtax on earnings over $50,000. There are also payroll and property taxes. To stay on top of things, you’ll need to keep up with all the tax rules pertaining to your PC.
You might owe certain taxes to the city, municipality, township, county, or other local region where your professional corporation is located. These tax obligations differ between locations, so it’s important to be aware of them and prepare accordingly.
Obtain Kansas business licenses and permits
To operate legally, you have to make sure that your professional corporation and its shareholders are properly licensed or hold the correct permits. These requirements depend on the industry and type of work you’re doing, so it’s up to you to maintain the correct documentation.
In Kansas, those practicing technical professions must obtain a Kansas State Board of Technical Professions (KSBTP) Certificate of Authorization to operate legally. For a complete look at the credentials your business needs, request a business license report through ZenBusiness.
Acquire insurance for your professional corporation
To protect yourself and your PC, you’ll need insurance. There are several options, such as general liability insurance, professional liability insurance, workers’ compensation, and malpractice insurance.
Workers’ compensation is typically required if your annual payroll exceeds $20,000. There are also minimum malpractice insurance requirements for health care professionals. Depending on what area your PC operates within, you might want to ask a licensed insurance agent which policies you should get.
Open a business bank account
You’ll need to open a bank account with an established financial institution to operate your professional corporation. You’ll likely need your EIN, copies of your Articles of Incorporation, and other documents pertaining to your PC on hand.
This will make it easier to organize and track your PC’s finances. It will also enable you to make and receive payments securely. For many industries, having a business account on file with the government is mandatory.
Ready to establish your business?
At ZenBusiness, we are proud to support small businesses through a variety of different tools and services. Whether you need a registered agent service, want to reserve a business name, or are looking to register a domain name for your website, our goal is to help you stay on the road to success. Check out our services and contact us today to see how we can help you grow your company.
Kansas Professional Corporation FAQs
What are the filing fees for a Kansas professional corporation?
It costs $90 to file the Articles of Incorporation in Kansas. Fees are payable by check or money order when filing by mail. Submissions may also be completed online for $85.
Do I need a lawyer to form a Kansas professional corporation?
You don’t need a lawyer to form a PC in Kansas. However, it’s a good idea to consult one before filing official documents, especially if you have questions.
Does Kansas have other types of professional entities?
Aside from PCs, Kansas allows qualified individuals to create professional limited liability companies. This structure offers greater flexibility, especially when it comes to income tax, but it doesn’t have the same liability protections as a PC.
Can professionals from different fields form a Kansas professional corporation together?
Professional corporations may offer one or more professional services in a related discipline. The professional corporation law of Kansas states which practitioners may form a PC that offers two or more services.