To form a New Jersey professional corporation, every proposed shareholder must hold a current license in the same profession the entity will practice, the name must carry a designator like “P.C.” or “P.A.” (never “Inc.” or “Corp.”), and the certificate of incorporation gets filed with the Division of Revenue and Enterprise Services for a $125 fee, accompanied by a certification from the relevant state licensing board confirming each shareholder’s license. The structure is authorized by New Jersey’s Professional Service Corporation Act at N.J.S.A. 14A:17-1 and following.1Justia. New Jersey Code 14A:17-5 – Professional Corporation and Foreign Professional Legal Corporation
Confirm Everyone Who Will Own Shares Is Licensed
This is the gate. Every shareholder of a New Jersey professional corporation must hold a current license or other legal authorization to practice the same professional service the corporation was organized to provide.2Justia. New Jersey Code 14A:17-10 – Who May Be Shareholders The statute defines a professional corporation as one organized for “the sole and specific purpose of rendering the same or closely allied professional service as its shareholders.”3Justia. New Jersey Code 14A:17-3 – Terms Defined
“Closely allied” does real work in that sentence. Physicians in different specialties can share one entity. A physician and an attorney cannot. The qualifying fields are those New Jersey requires a license to practice: medicine, law, dentistry, accounting, architecture, engineering, optometry, chiropractic care, and similar professions. If the state doesn’t license the service, this structure isn’t available to you.
Non-licensed people can still work for the corporation in administrative, clerical, and support roles. The licensing rule governs ownership and anyone actually rendering the professional service.
The ownership restrictions also run forward in time, which is worth understanding before you file. You cannot issue shares to someone unlicensed, you cannot grant voting rights to a non-shareholder through a proxy or voting trust, and shares can only be transferred to the corporation itself or to another qualified individual.2Justia. New Jersey Code 14A:17-10 – Who May Be Shareholders4Justia. New Jersey Code 14A:17-12 – Share Transfer Restrictions Outside investors are off the table.
Pick a Name That Will Clear State Review
Naming is where most first-time filers get rejected. The name has to include either the full or last name of one or more shareholders, or a description of the professional service, plus one of these designators: “Chartered,” “Professional Association,” “A Professional Corporation,” “P.A.,” “P.C.,” “PA,” or “PC.”5Justia. New Jersey Code 14A:17-14 – Corporate Name
The statute specifically prohibits “Company,” “Corporation,” “Incorporated,” or their abbreviations like “Inc.” and “Corp.”5Justia. New Jersey Code 14A:17-14 – Corporate Name “Smith Engineering, Inc.” will be rejected. “Smith Engineering, P.C.” is fine. The name also has to be distinguishable from other entities already on the state’s register, so run a name search before you commit to signage, domain names, or stationery.
Get the Board Certification Before You File
Here is the step that distinguishes a professional corporation from an ordinary business corporation. Under N.J.S.A. 14A:17-8, the Division of Revenue will not accept your filing without a certificate from the relevant state professional licensing board confirming that every proposed shareholder is currently licensed.
A dental practice needs a certificate from the State Board of Dentistry. A medical group needs one from the Board of Medical Examiners. A law firm needs one from the body that oversees attorney licensing. Request these early. Depending on the board’s backlog, obtaining the certificate can add several weeks to your timeline, and the state will not process the incorporation until it has the document in hand.
File the Certificate of Incorporation
Professional corporations are organized under the Business Corporation Act (Title 14A), so the certificate itself looks like any other New Jersey corporate filing. You list the entity’s name, its purpose, the number of authorized shares, a registered agent and office in New Jersey, and the names of initial directors.1Justia. New Jersey Code 14A:17-5 – Professional Corporation and Foreign Professional Legal Corporation The stated purpose must be limited to rendering the specific professional service the shareholders are licensed to provide.
The registered agent requirement is continuous: every New Jersey corporation must maintain a registered office and agent in the state. The agent can be an individual at least 18 years old or a domestic or authorized foreign corporation with a New Jersey business office.6Justia. New Jersey Code 14A:4-1 – Registered Office and Registered Agent This is where legal process and state correspondence get served, so use a real staffed address, not a drop box.
Where and How to File
Filings go through the New Jersey Division of Revenue and Enterprise Services online portal.7State of NJ – Online Business Entity Filing. State of NJ – Online Business Entity Filing The system walks you through the data entry fields and lets you upload the board certification as a digital file. Paper filings are technically still accepted, but they take much longer.
Fees
The base filing fee is $125.8Justia. New Jersey Code 14A:15-2 – Filing Fees of the State Treasurer Online filings without expediting generally process within a few business days. For in-person (over-the-counter) filings that need faster turnaround, expedited service adds $15 for standard expediting, $500 for two-hour service, or $1,000 for one-hour service. Certified copies cost $25 each.9Division of Revenue and Enterprise Services. Registry Fee Schedules
What to Do Right After the Certificate Is Accepted
Get an EIN
The corporation needs a federal Employer Identification Number before it can open a bank account, hire employees, or file taxes. The principal officer applies online, by fax, or by mail using Form SS-4; the online application issues the EIN at the end of the session. You must designate a responsible party, and any change in that person has to be reported to the IRS within 60 days using Form 8822-B.10Internal Revenue Service. Instructions for Form SS-4
Decide on S Corporation Status
By default, a professional corporation is taxed as a C corporation at the flat federal rate of 21%. Many practices elect S corporation status by filing IRS Form 2553, which lets profits pass through to shareholders and get taxed on their individual returns rather than at the entity level.
The election must be filed no more than two months and 15 days after the beginning of the tax year you want it to take effect. For the 2026 calendar year, that deadline falls on March 16, 2026, because March 15 is a Sunday.11Internal Revenue Service. Instructions for Form 2553 Missing it typically pushes the election to the following tax year, though the IRS can grant late relief under Revenue Procedure 2013-30 if you can show reasonable cause.
S corporation status also lets working shareholders split compensation between a reasonable salary (subject to payroll taxes) and distributions (not subject to self-employment tax). The IRS watches professional service S corporations closely for unreasonably low salaries, so set the salary at what someone in that role would actually earn.
Put a Buy-Sell Agreement in Place
This belongs on your formation checklist, not a someday list. N.J.S.A. 14A:17-13 sets hard deadlines for what happens when a shareholder dies or loses their license. On death, all affected shares must be transferred to the corporation or to a qualified person within 375 days. On disqualification, the window is 90 days.12Justia. New Jersey Code 14A:17-13 – Corporate Shares of Deceased or Disqualified Shareholders
If no transfer happens in time, the corporation must redeem the shares at book value, calculated by an independent CPA as of the end of the month before the triggering event. That valuation is conclusive and binding on everyone involved.12Justia. New Jersey Code 14A:17-13 – Corporate Shares of Deceased or Disqualified Shareholders Book value usually shortchanges the departing shareholder and strains the remaining owners’ cash. The statute lets you set your own transfer terms through the certificate of incorporation, bylaws, or a separate agreement, and almost every well-run professional corporation does.
What Keeps It in Good Standing
Annual Report
Every New Jersey business entity, including a professional corporation, must file an annual report updating the registered agent and business address. The fee is $75, and the deadline is the last day of the month in which the corporation was originally formed. Miss it long enough and the state can revoke the corporation’s authority to do business.13NJ.gov. Taxes and Annual Report
The Separate Shareholder Report
Professional corporations have a second filing that regular corporations don’t. Under N.J.S.A. 14A:17-11, the entity must furnish an annual report to the Department of the Treasury listing all shareholders, directors, and officers, with certification that each is duly licensed. This is separate from the standard annual report and reinforces the state’s ongoing oversight of who controls the practice.
Licensing Board Reporting
The licensing board that issued your formation certificate may impose its own continuing reporting rules. Medical boards, bar associations, and accounting boards each run their own regime for what a professional corporation must disclose and how often. Ask the relevant board at formation and add their deadlines to the same compliance calendar you use for the Treasury filings.
Corporate Formalities and the Veil
Hold annual shareholder and director meetings, keep minutes, and document major decisions in writing. Beyond state compliance, these records matter if the corporation ever gets sued: a plaintiff who can show that owners treated the entity as a personal alter ego may ask a court to pierce the corporate veil and reach shareholder assets.
What the Corporate Form Does and Does Not Shield
Worth being clear about before you form the entity. A professional corporation gives shareholders the same liability shield as any corporation for ordinary business debts, leases, and commercial obligations. An unpaid vendor cannot reach your personal assets simply because you own stock.
The shield stops at your own professional work. Under N.J.S.A. 14A:17-7, a professional corporation renders services only through its licensed shareholders and employees, and each professional remains personally liable for their own malpractice and negligence. Incorporating does not insulate you from the consequences of your own mistakes. Where the structure genuinely helps is with other owners’ malpractice: if a partner in your medical professional corporation is sued for negligence, the entity may be liable, but your personal assets generally are not exposed the way they would be in a general partnership. That protection is the main reason most multi-owner practices choose this structure.