A professional corporation is a legal structure that allows licensed professionals, such as doctors or lawyers, to operate their practices as a corporation, providing liability protection and certain tax advantages.
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Last Updated: January 12, 2026
A professional corporation (PC) is a business entity for licensed professionals. Some states allow individuals licensed in different, related professions to own shares of the same legal entity, while others require everyone to share the same certifications. These rules can vary from state to state, so it’s wise for business owners to consult with a professional to get guidance about professional corporation regulations in their state.
Professional corporation benefits can include limiting the personal liability of each shareholder for other shareholders’ misconduct. If another professional in a corporation commits malpractice or a wrongful act while conducting business, the other business owners are likely to lose only business property in a lawsuit, not their personal assets.
With a professional corporation, business owners can help ensure that all of their co-owners are well-educated in the industry. The owners can also reduce some financial obligations (such as self-employment taxes) in a professional corporation when compared to a professional LLC.
Part of the allure of a standard corporation is the fact that the company owners can easily raise capital by selling their shares to anyone they want, with few restrictions. This is not the case with the typical professional corporation. Normally, professional corporations must limit the sale of their shares to other licensed professionals.
And, in some states, professionals with shares must all be from the same state-licensed industry. This can make it difficult for a professional corporation to attract new investors through new shareholders. These requirements can also make business formation a bit more complicated.
A professional corporation is centered around providing a state-licensed service to the public. There are many types of professional services that can fit within a professional corporation, including:
In some special circumstances (and specific states), a business might be able to offer more than one professional service in a professional corporation if those services are related. For instance, one state’s laws might allow the business to offer accounting and financial planning services in a single professional corporation.
Professional corporations have rigid ownership rules. However, this entity type can limit one owner’s liability for their colleagues’ malpractice while allowing them to be selective about their co-owners. This business structure might be the best choice for the company’s professional needs, but it’s important to speak to legal and financial experts before making a decision. Find out more about how to form a professional corporation.
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Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. For specific questions about any of these topics, seek the counsel of a licensed professional.
Written by ZenBusiness Editorial Team
The ZenBusiness Editorial Team has more than 20 years of combined small business publishing experience and has helped over 850,000 entrepreneurs launch and grow their companies. The team’s writers and business formation experts are dedicated to providing accurate, practical, and trustworthy guidance so business owners can make confident decisions.
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