A professional corporation in Florida is a corporation owned by licensed professionals that exists only to provide their licensed service. If you’re a doctor, lawyer, CPA or other licensed professional and you want to incorporate, Florida’s Professional Service Corporation Act (Chapter 621 of the Florida Statutes) sets the rules, and the main ones are simple: only licensed people own it, and it doesn’t protect you from your own malpractice.
Most Florida professional corporations use “P.A.” (Professional Association) after their name. That’s the same thing under a different label.
What is a professional corporation?
A professional corporation (PC) is a corporation limited to one licensed profession. A regular corporation can do any lawful business. A PC can only offer the service its owners are licensed to provide.
It gives you the liability protection and structure of a normal corporation, but the practice stays under the control of licensed people, and your licensing board keeps its authority over you. In practice that means:
- Only professionals licensed in the same field can own shares. A medical PC is owned by licensed physicians.
- You’re shielded from the business’s debts, but not from your own professional negligence.
- Your licensing board’s rules, ethics standards and discipline still apply.
- It can elect S-Corporation tax status, the same as any other corporation.
Who has to form a professional corporation in Florida?
Chapter 621 covers licensed professionals who want to incorporate their practice. Those professionals generally have to use a professional corporation or a professional limited liability company (PLLC) rather than an ordinary corporation.
That includes:
- Medical and health: physicians and surgeons, osteopathic physicians, chiropractors, podiatrists, dentists, optometrists, veterinarians, and physical, occupational and respiratory therapists and speech-language pathologists
- Mental health: psychiatrists, psychologists, clinical social workers, marriage and family therapists and mental health counselors
- Legal and accounting: attorneys, CPAs and public accountants
- Design and engineering: architects (including those who design outdoor spaces), professional engineers and interior designers
- Others: surveyors and mappers, community association managers, and real estate appraisers in some circumstances
Licensing rules change, so treat that list as a starting point. Before you file anything, ask your licensing board whether you have to practice through a professional entity and whether it allows a PLLC. Some professions allow either. Others want the corporate form.
Which Florida laws apply?
Two chapters work together.
Chapter 621, the Professional Service Corporation Act, covers what’s specific to PCs: which professions it applies to, who can own shares, naming designators, professional liability, and licensing for shareholders and employees. Its core requirement is that the shareholders, directors and officers who provide professional services are licensed in the same profession, and that the corporation only provides services in that profession.
Chapter 607, the Florida Business Corporation Act, covers everything a PC shares with any other corporation: filing the articles, bylaws, shareholder meetings and voting, director duties, annual reports and dissolution.
Where the two conflict, Chapter 621 modifies the general rules in Chapter 607.
How do you form a professional corporation in Florida?
The state filing is the easy part. The licensing board steps before and after it are what slow people down.
1. Confirm everyone is licensed
Every proposed shareholder needs an active, unrestricted license in the profession from the right Florida board. If the organizers aren’t properly licensed, you can’t form the PC.
2. Pick a name with the right designator
The name has to show it’s a professional corporation. The options are “Professional Association” or “P.A.,” and “Professional Corporation” or “P.C.”
Most Florida PCs use P.A. It’s been the traditional Florida designator since before the Professional Service Corporation Act was passed.
You don’t have to name your profession, though plenty of firms add something like “Medical Associates” or “Accounting Services” so people know what they do. Search the Florida Division of Corporations Sunbiz database to make sure your name is distinguishable from existing companies. Some boards also want to approve the name before you file, so ask yours first.
3. Check for pre-filing approvals
Some boards have their own requirements before or alongside formation:
- Physicians register with the Florida Board of Medicine. The corporation can’t practice medicine until it’s registered.
- Attorneys have to follow the Rules Regulating The Florida Bar, which restrict firm names and non-lawyer ownership.
- CPAs register the firm with the Florida Board of Accountancy and follow its ownership and organization rules.
If your profession isn’t listed here, call your board and ask what it needs.
4. Appoint a registered agent
Every Florida corporation needs a registered agent with a physical Florida street address (no P.O. boxes) to receive legal papers. It can be an individual Florida resident, a business authorized to act as registered agent, a commercial registered agent service, or one of the licensed shareholders.
5. File the Articles of Incorporation
Your Articles of Incorporation for a professional service corporation include the usual items: the name with its designator, principal office address, registered agent and street address, number of authorized shares, and incorporator information.
They also need three things a regular corporation’s articles don’t:
- A statement that the corporation is organized under Chapter 621, Florida Statutes
- The specific professional service the corporation will provide
- Confirmation that every shareholder, director and officer who provides professional services is licensed in that profession
File through the Sunbiz website. The filing fee is $70.
6. Write bylaws built for a PC
Generic corporate bylaws miss the parts that matter most here. Yours should cover who can be a shareholder (licensed professionals only), the rule that shares can only be transferred to licensed professionals, director and officer qualifications, meeting procedures, ethical compliance, and what happens when a shareholder dies, retires or has a license suspended.
7. Get an EIN
Apply for an Employer Identification Number on the IRS website. It’s free, it’s usually issued immediately online, and you’ll need it for tax filings and a business bank account.
8. Register with your licensing board
Medical practices register with the Board of Medicine or the Board of Osteopathic Medicine. Law firms file notices with The Florida Bar. CPA firms register with the Board of Accountancy, and engineering firms with the Board of Professional Engineers.
Don’t skip this one. Missing a required board registration can lead to discipline and may mean you can’t legally practice through the corporation.
9. Hold the organizational meeting and issue stock
At the first board meeting, adopt the bylaws, elect officers, authorize stock issuance and adopt banking resolutions. Record it in formal minutes and keep them with your corporate records. Then issue stock certificates to the initial shareholders, with the transfer restrictions noted on them.
What liability does a professional corporation actually protect you from?
Less than a regular corporation. This is the part people misunderstand most.
A PC does protect you from:
- Business debts. Creditors on contracts, leases and other corporate obligations can go after the corporation’s assets, but generally not your personal ones.
- Your colleagues’ malpractice. You aren’t personally liable for professional negligence by other shareholders or employees.
- General business claims that aren’t about professional services.
It doesn’t protect you from:
- Your own malpractice. Your own professional negligence and errors in judgment are on you, corporation or not.
- Poor supervision. You can be held liable for malpractice by people you supervised if your oversight fell short.
- Board discipline. Your licensing board can discipline you individually for ethics violations whatever your structure.
- Wrongdoing you took part in. Direct participation in wrongful conduct stays personal.
That limit is deliberate. The law won’t let licensed professionals hide behind a corporation to avoid accountability for their own work.
So malpractice insurance isn’t optional. The corporation adds a layer of protection on top of your coverage, and it doesn’t replace it. Many licensing boards also require minimum professional liability coverage if you practice through a PC.
Who can own shares, and what happens when someone leaves?
Shareholders who provide professional services must be licensed in the profession the corporation practices. A law firm PC is owned by attorneys licensed to practice in Florida, and that’s it.
Non-licensed people generally can’t own shares, even passively. A law firm can hire a non-lawyer administrator and a medical practice can hire a business manager, but neither can hold equity. CPA firms are a partial exception: their rules allow some non-CPA ownership in certain circumstances. Check with your board, because each profession sets its own limits.
Because ownership is so restricted, PC bylaws usually include mandatory buyback terms:
- Death or retirement: the corporation or the remaining shareholders buy the shares.
- License suspension or revocation: the shares must be transferred.
- Voluntary sales: only to another licensed professional in the same field, and only with approval.
- Right of first refusal: existing shareholders or the corporation get the first chance to buy before shares go to an outside professional.
Work these out when you form the company. Negotiating a buyout after a partner dies or loses a license is much harder.
Should you form a professional corporation or a PLLC?
Both give you the same liability protection: a shield against business debts and colleagues’ malpractice, and no protection for your own. Both need malpractice insurance. The differences are about how you run the business.
| Feature | Professional corporation | PLLC |
|---|---|---|
| Governance | Shareholders, directors and officers | Member-managed or manager-managed |
| Formalities | Regular shareholder and director meetings, formal minutes | Fewer required formalities |
| Ownership records | Stock certificates | Operating agreement and membership interests |
| Default federal tax | C-Corporation | Pass-through |
| S-Corp election | Yes, Form 2553 | Yes, Form 2553 |
A PC makes sense if your board requires the corporate form, you want traditional corporate governance, you plan to have more than one shareholder class, or you want a structure banks and investors already know.
A PLLC makes sense if your board allows it and you want flexibility with fewer formalities, especially as a solo practitioner or a small group.
Many Florida professionals now choose PLLCs for that reason, though law firms in particular have traditionally used professional corporations and many still do. If your board allows both and you’re practicing alone or with one or two partners, we’d lean toward the PLLC. Talk to an attorney who knows your profession’s licensing rules before you commit.
How is a Florida professional corporation taxed?
The same way as any other corporation. You choose between C-Corp and S-Corp treatment.
C-Corporation (the default)
The corporation pays federal income tax at 21% on its net profits and Florida corporate income tax at 5.5%. Shareholders then pay tax again on any dividends they receive.
There are upsides. The corporation can keep earnings for business purposes without distributing them, which defers personal tax, and it can deduct 100% of health insurance and certain other fringe benefits for shareholder-employees.
S-Corporation election
Most professional corporations elect S-Corp status. The corporation pays no federal income tax, and income, deductions and credits pass through to the shareholders’ personal returns.
The usual draw is self-employment tax. You pay yourself a reasonable salary that’s subject to payroll taxes, and take the rest of the profit as distributions that aren’t subject to self-employment tax. Florida has no personal income tax, so that pass-through income isn’t taxed by the state either.
To elect, file Form 2553 with the IRS within 2 months and 15 days of forming the corporation, or by March 15 to have it apply to the current tax year.
To qualify, the corporation must be a domestic corporation (a Florida one counts), have no more than 100 shareholders who are U.S. citizens or residents, individuals rather than entities, or certain trusts or estates, and have only one class of stock (voting rights can differ). Professional practices rarely bump into any of these limits.
What to watch for
Reasonable compensation. The IRS looks closely at professional service providers who pay themselves a small salary and take large distributions. Your salary has to be reasonable for the work you do.
The QBI deduction. Professional service providers may have limited access to the 20% qualified business income deduction depending on income.
Other states. If you’re licensed and earning in other states, their tax treatment may not be as friendly as Florida’s.
A CPA who works with professional practices is worth paying here. The salary-versus-distribution split is where most of the savings and most of the audit risk sit.
What do you have to keep up every year?
You answer to two regulators: the Division of Corporations and your licensing board.
The Florida annual report
| Item | Details |
|---|---|
| Filing window | January 1 to May 1 |
| Fee | $150 |
| Where to file | Online at Sunbiz, using your document number or corporation name |
| Late filing | Delinquency notice after May 1 |
| Administrative dissolution | If still not filed by the third Friday in September |
The report confirms your principal office address, registered agent name and address, and the names and addresses of your directors and officers. If your registered agent changes, update it within 30 days. Report changes to your principal office address too.
Your licensing board
Many boards require annual registration or renewal of the corporation’s registration. Tell your board when shareholders, directors or licensed employees join or leave, and report address changes within its deadlines. Some boards also ask for periodic certification that everyone practicing is actively licensed.
Every shareholder-practitioner needs to keep an active, unrestricted license and finish required continuing education. A shareholder who loses a license has to divest their shares. Keep the required malpractice coverage in place and follow your board’s ethics rules.
Corporate records and taxes
Hold annual shareholder and director meetings and record them in minutes. Keep accounting records, bank reconciliations, financial statements and an up-to-date stock transfer ledger. Keep minutes, resolutions and financial documents for as long as the law requires, generally at least seven years.
On the tax side, you’ll file a federal return each year (Form 1120, or Form 1120-S if you elected S-Corp status) plus any required Florida corporate tax return, make quarterly estimated payments if required, and file quarterly payroll returns, W-2s for employees and 1099s for contractors. Withhold and pay employment taxes for every employee, including shareholder-employees. And carry workers’ compensation insurance unless you qualify for an exemption.
Before you file
Call your licensing board before you do anything at Sunbiz. Ask three questions: does your profession have to use a professional entity, does the board allow a PLLC, and does it need to approve your name or register the corporation? Those answers decide your structure, your name and your timeline. The state filing itself is a $70 form you can finish in an afternoon.
Then get your bylaws or buyback terms written with an attorney who knows your profession, and talk to a CPA about the S-Corp election before the Form 2553 deadline passes.