Professional Corporation in Florida: Requirements for Licensed Professionals

If you’re a licensed professional in Florida — a doctor, lawyer, accountant, or architect — you may be required to form a Professional Association (PA) instead of a regular corporation or LLC. Professional corporations have specific ownership and operating requirements designed to protect the public and maintain professional standards.

This guide explains who must form a PA, the requirements, and how to incorporate as a professional corporation in Florida.

What Is a Professional Corporation (PA)?

A Professional Association (PA) — Florida’s version of a professional corporation — is a business entity specifically designed for licensed professionals. The key distinction: all shareholders must be licensed in the same profession.

Why Professional Corporations Exist

Regular corporations shield owners from personal liability. But for licensed professionals, the public has a right to hold practitioners personally accountable for malpractice. Professional corporations provide:

• Business liability protection: For general business debts and non-malpractice claims
• Personal professional liability: Each professional remains personally liable for their own malpractice
• Regulatory oversight: The licensing board maintains authority over professional conduct

PA vs. Regular Corporation

Who Must Form a Professional Corporation in Florida?

Florida Statutes Chapter 621 requires professional corporations for specific licensed professions. You must form a PA if you’re practicing as:

Medical and Healthcare Professionals

• Physicians (M.D.)
• Osteopathic physicians (D.O.)
• Chiropractors
• Podiatrists
• Dentists
• Optometrists
• Psychologists
• Clinical social workers
• Mental health counselors
• Physical therapists

Legal and Financial Professionals

• Attorneys
• Certified Public Accountants (CPAs)

Design and Technical Professionals

• Architects
• Engineers (Professional Engineers)
• Land surveyors

Other Licensed Professionals

• Veterinarians
• Life insurance agents

Note: This list isn’t exhaustive. Check with your licensing board to confirm whether your profession requires a PA.

Professional Corporation Requirements

1. Shareholder Restrictions

All shareholders must be:

• Licensed to practice the same profession in Florida
• Actively engaged in the practice through the corporation

Example: A medical PA’s shareholders must all be licensed Florida physicians. A doctor and an accountant cannot own the same PA together.

2. Director and Officer Requirements

Directors: Must be shareholders (therefore, licensed professionals)

Officers: At least one officer must be a licensed professional. Other officers (like a CFO or operations manager) don’t need to be licensed.

3. Corporate Name Requirements

Your PA name must:

• Include “Professional Association,” “P.A.,” or “Chartered”
• Include the professional’s name OR a distinctive name approved by the licensing board
• Not be misleading about services offered

Examples:

• Smith Medical Associates, P.A.
• Johnson & Partners Law, P.A.
• Florida Dental Group, Chartered

4. Scope of Services

A PA can only provide services within its designated profession. A medical PA cannot also offer legal services, even if a shareholder happens to be a licensed attorney.

However, PAs can:

• Own real estate
• Employ non-professional staff
• Invest corporate funds
• Conduct business operations related to the professional practice

5. Regulatory Compliance

Your PA must comply with:

• Florida Business Corporation Act (general corporate law)
• Florida Professional Service Corporation Act (Chapter 621)
• Rules of your specific licensing board

The licensing board may have additional requirements for how the PA operates, advertises, or handles client relationships.

How to Form a Florida Professional Association

Step 1: Verify Your Profession Requires a PA

Confirm with your licensing board that you must form a PA. Some professions allow regular LLCs or corporations.

Step 2: Choose Your Corporate Name

Your name must include a proper designation:

• “Professional Association”
• “P.A.”
• “Chartered”

Check name availability on Sunbiz.org.

Step 3: Prepare Required Information

Gather:

• Names and license numbers of all shareholders
• Principal office address
• Mailing address
• Registered agent (Florida address required)
• Incorporator information

Step 4: File Articles of Incorporation

File through Sunbiz.org, selecting “Florida Professional Service Corporation.”

Required in the Articles:

• Corporate name with PA designation
• Purpose (limited to the professional service)
• Names of initial shareholders with license numbers
• Registered agent information
• Incorporator signature

Filing fee: $70

Step 5: Obtain Professional Approval (If Required)

Some licensing boards require:

• Review and approval of the corporate name
• Registration of the PA with the board
• Submission of shareholder credentials

Check your board’s specific requirements.

Step 6: Create Bylaws

Your bylaws should address:

• Shareholder qualifications and transfer restrictions
• What happens if a shareholder loses their license
• Meeting procedures
• Officer duties

Include provisions ensuring ongoing compliance with professional requirements.

Step 7: Complete Standard Corporate Steps

• Hold organizational meeting
• Issue stock certificates
• Obtain EIN from the IRS
• Open corporate bank account
• Obtain business licenses and permits

Liability Protection in Professional Corporations

What’s Protected

A PA provides protection from:

• General business debts: Lease obligations, vendor debts, business loans
• Employee actions: Negligence by non-professional staff
• Contract disputes: Business-related claims unrelated to professional services
• Other shareholders’ malpractice: Generally not liable for another professional’s errors

What’s NOT Protected

You remain personally liable for:

• Your own malpractice: The PA structure doesn’t shield you from your professional errors
• Direct supervision failures: If you supervised the person who committed malpractice
• Personal guarantees: Any debts you personally guaranteed

Malpractice Insurance

Because personal professional liability remains, malpractice insurance is essential. Your PA should also carry:

• General liability insurance
• Professional liability insurance (errors & omissions)
• Employment practices liability insurance

Tax Considerations

Default Taxation

Professional Associations are taxed as C Corporations by default:

• Corporate income tax on profits
• Dividends taxed again to shareholders (double taxation)

S Corporation Election

Most PAs benefit from S Corp election:

• Pass-through taxation (single level)
• Potential self-employment tax savings on distributions
• Must meet S Corp requirements (100 shareholder limit, one class of stock, etc.)

File IRS Form 2553 to elect S Corp status.

Reasonable Compensation

If you elect S Corp status, you must take reasonable compensation as salary before taking distributions. The IRS scrutinizes professional corporations closely for this.

Ongoing Compliance

Annual Report

File an annual report by May 1 each year:

• Fee: $150
• Late fee: $400

Licensing Board Requirements

Maintain compliance with your licensing board:

• Renew professional licenses
• Report any disciplinary actions
• Submit required documentation
• Follow advertising rules

Corporate Formalities

Maintain proper corporate records:

• Annual shareholder meetings
• Director meetings as needed
• Updated bylaws
• Stock transfer records
• Meeting minutes

Employment Compliance

If you have employees:

• Payroll taxes (federal and Florida reemployment tax)
• Workers’ compensation insurance
• Employment law compliance

What Happens If a Shareholder Loses Their License?

If a PA shareholder loses their professional license:

1. They must sell their shares: Transfer to another licensed professional
2. Timeline: Usually within a specified period (check your licensing board’s rules)
3. Buyout provisions: Your bylaws should address how shares are valued and purchased
4. Failure to transfer: May require dissolution of the PA if remaining shareholders can’t continue

Plan for this possibility in your bylaws and shareholder agreements.

Professional Corporation vs. Professional LLC

Florida also allows Professional Limited Liability Companies (PLLCs) for some professions.

Both provide similar liability protection. PLLCs offer more operational flexibility. Check with your licensing board — some professions must use PAs, while others allow either structure.

Frequently Asked Questions

Can I form an LLC instead of a PA?

It depends on your profession. Some licensing boards allow LLCs or PLLCs, while others require PAs. Check your board’s rules.

Can a PA have non-professional employees?

Yes. PAs can hire receptionists, administrators, technicians, and other support staff. Only shareholders must be licensed professionals.

Can two different types of professionals own a PA together?

No. All shareholders must be licensed in the same profession. A doctor and lawyer cannot share ownership of a PA. They could, however, have separate PAs that share office space.

What happens to my PA if I retire?

You can sell your shares to another licensed professional, or the PA can be dissolved. Plan succession in advance, especially in solo practices.

Do I need malpractice insurance if I have a PA?

Yes. The PA structure does not protect you from your own professional negligence. Malpractice insurance is essential.

Can my PA own real estate?

Yes. Your PA can own property, equipment, and other assets related to your practice.

Ready to Form Your Professional Corporation?

Forming a Florida Professional Association involves:

1. Confirming your profession requires a PA
2. Choosing a compliant corporate name
3. Filing Articles of Incorporation ($70)
4. Obtaining any required licensing board approvals
5. Completing standard corporate formation steps

The process is similar to regular incorporation but with additional professional requirements.

Need help forming your PA? IncCraft can guide you through professional corporation formation, ensuring compliance with both corporate law and professional regulations.