Licensed professionals who perform specific types of services that require a state license may form a Missouri professional corporation (PC). 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.
If you’re interested in the advantages of a PC, here’s how to form one.
The first thing to consider is what type of company structure is right for your company. You may find that a PC isn’t the best fit for your business due to tax laws or recordkeeping requirements. You’ll have to decide how to divide ownership and how your PC will be managed.
Another thing to consider is that the state doesn’t have a professional limited liability corporation (PLLC) entity. Instead, as long as everybody involved has a license, members can form a limited liability corporation (LLC) instead of a PC, which may provide added flexibility and certain tax advantages.
Naming your business is one of the most important parts of the incorporation process.
Your company’s name has to be unique from any other business operating in the state. The state requires PCs to include the words “professional corporation” or “P.C.” in their names, according to The Professional Corporation Law of Missouri.
The name cannot include any words or abbreviations used by other business types, such as “LLC.” Finally, you cannot use words that indicate other business types (such as “bank” or “lawyer”) unless your business fits that type.
You can use ZenBusiness’s name reserve service to see if the name you want is taken. If it’s available, we can hold it for 60 days while you prepare your paperwork. When you find a name that fits, ZenBusiness can help you reserve your business domain name for your website, too.
A registered agent is a person or entity that receives legal notices on behalf of a company as well as official correspondence from the Secretary of State. The registered agent must have a physical address within the state and maintain an office that operates during standard business hours. The registered agent must always be available during normal business hours.
Because of this regulation, it can be difficult for busy professionals to act as their own registered agent. Many companies choose to hire a service to perform this task. ZenBusiness offers a service that can connect you with a registered agent to save you time.
Your Articles of Incorporation is the most important document your company will submit, so it’s important to understand how it works.
To start, you’ll need to decide who will act as your company’s incorporator. The incorporator is the person required to sign all the initial documents to set up your PC.
You’ll also need contact information for your registered agents, shareholders, and directors. It also asks about the purpose of the organization and how shares will be divided.
To file the articles, you’ll need to mail your paperwork to the Missouri Secretary of State or file in person in Jefferson City. The state filing fee costs a minimum of $58 for up to $30,000 in shares, but depends on the amount of capital. Fees can be paid by check. Credit cards are accepted with an added convenience fee.
Once your filing is approved, your PC officially exists! But, there’s much more to do. State law requires all companies to keep a permanent record of all company decisions. This record can be kept in physical format or digitally, but must be stored somewhere safe to prevent loss or tampering.
The next task is to select the initial director(s) for your PC. These appointments must be recorded for the corporate record as an incorporator’s statement.
These directors can include any number of qualified individuals, including the incorporator. They don’t need to live in Missouri to serve in the role. The only stipulation is that each director must share the same profession as the one the PC was created for.
Bylaws are the rules and regulations that determine how your PC will operate day to day. You’ll cover a variety of important topics, including when the board of directors meets and rules for revising the bylaws.
Bylaws must be recorded in your corporate record, but you don’t need to file them with the state. There are no particular rules as to how bylaws are determined, but they must be consistent with state law.
After completing the above, it’s time for your PC to hold its first board meeting. During this initial meeting, you should plan to ratify your bylaws, designate officers, make tax decisions, and prepare to set up a bank account. The minutes of this meeting, and all following meetings, should be kept in your corporate record.
To operate your PC, you’ll need to get it set up for taxes. On the federal level, this means applying with the IRS for an employer identification number (EIN), which is a free process. You can also have ZenBusiness do it for you.
On the state level, Missouri doesn’t require any special registration. However, your corporation will be subject to a franchise tax. You may be subject to other taxes depending on your business type, such as sales or use tax.
Some city or county jurisdictions may have taxes that apply to your business, as well.
PCs don’t need to register for a general business license. However, you may need to obtain licenses or permits for your industry from the Missouri Division of Professional Regulation. There may be city and county permits that your corporation might need depending on the type of work it does. Our business license report service shows you these requirements at a glance.
Insurance is important for the continued operation of your business. By law, PCs must have workers’ compensation insurance coverage if they have five or more employees unless they qualify for an exemption.
You may need to set up general liability insurance as well as any industry-specific insurance, such as professional or medical malpractice insurance, even though this coverage isn’t required by the state.
Legally, you need to keep your personal assets separate from your business assets. Therefore, it’s important to have a business bank account. You’ll need your EIN and business records to complete this step.
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, 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.
Filing fees for establishing a professional corporation in Missouri depend on the amount of capital involved. For up to $30,000 of authorized shares, you should plan on spending a minimum of $58 for the paperwork. Filing fees increase by $5 per every $10,000 in shares. Payments can be made by check. A convenient fee applies to electronic payments. Filing can be completed by mail or in person.
While a lawyer isn’t required, it may be a good idea to hire one to prevent mistakes.
Yes, licensed professionals in Missouri can start a limited liability company (LLC).
No. Everyone involved in forming a PC must belong to the same profession.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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