To form a professional corporation in California, file Articles of Incorporation on Form ARTS-PC with the Secretary of State along with a $100 filing fee, then complete the profession-specific steps that follow: registering with your licensing board if it requires it, obtaining an EIN, adopting bylaws, issuing shares only to licensed professionals, and filing an initial Statement of Information within 90 days. Only individuals holding a California-issued license, certification, or registration in an eligible profession can use this entity type.
Confirm You’re Eligible
The Moscone-Knox Professional Corporation Act limits this structure to professions that require a state-issued license, certification, or registration under the Business and Professions Code, the Chiropractic Act, or the Osteopathic Act. That covers physicians, dentists, lawyers, architects, accountants, psychologists, optometrists, veterinarians, pharmacists, registered nurses, chiropractors, and dozens of others. If your occupation doesn’t require a California professional license, form a standard corporation or an LLC instead.
A professional corporation can practice only one profession. Narrow exceptions allow certain related licensees to share ownership: in a medical corporation, for example, podiatrists, psychologists, optometrists, and other cross-licensed professionals may hold shares, but no more than 49 percent of the total, and the number of these secondary shareholders cannot exceed the number of primary licensees.
Before you file anything, check with your licensing board. Some boards layer their own eligibility rules on top of the statute.
Choose a Compliant Corporate Name
Every professional corporation must identify itself as one in its name. Most people satisfy this by adding “A Professional Corporation” or the abbreviation “P.C.” to the name. Your licensing board may impose additional naming conventions, so ask before printing anything.
The name must also be distinguishable from every other entity already on file with the Secretary of State. Run a search on the Secretary of State’s bizfile Online portal before you commit. A name conflict will bounce your filing back and cost you time.
File the Articles of Incorporation
Form ARTS-PC is what actually creates the corporation. The form asks for the full corporate name (including the P.C. designation), a street address and a mailing address (P.O. boxes are fine for mailing, not for the street address), and an agent for service of process with a California street address. The agent can be an officer, a director, or a third-party registered agent service, but not a P.O. box.
The document also has to state a specific professional purpose. Where a general business corporation can describe a broad purpose, a professional corporation’s articles must name the exact profession it will practice. That single-purpose statement is the main thing that separates ARTS-PC from standard articles of incorporation.
The filing fee is $100 whether you file online through bizfile, mail the form to the Secretary of State, or drop it off in person at 1500 11th Street in Sacramento. In-person drop-off adds a $15 special handling fee. Expedited processing is available for an additional fee at tiers ranging from 24-hour service up to same-day and 4-hour turnarounds. Mail filings without expediting take the longest, and processing times vary.
Once accepted, you’ll receive a file-stamped copy of the Articles. Everything in the filing, including addresses, becomes public record.
Register With Your Licensing Board — If You Have To
Corporations Code Section 13404 says a professional corporation cannot practice without a certificate of registration from its regulating agency. The Moscone-Knox Act then carves out a long list of exceptions. Corporations governed by any of the following boards are exempt from the certificate-of-registration requirement:
- Medical Board of California and its examining committees
- Podiatric Medical Board
- Osteopathic Medical Board
- Dental Board of California
- Dental Hygiene Board
- California State Board of Pharmacy
- Veterinary Medical Board
- California Architects Board
- Court Reporters Board
- Board of Behavioral Sciences
- Speech-Language Pathology and Audiology and Hearing Aid Dispensers Board
- Board of Registered Nursing
- State Board of Optometry
- California Board of Occupational Therapy
If your board is on that list, you can begin practicing once the Articles are filed and your other setup is done. No separate registration is required.
If your board isn’t on the list, you must get a certificate of registration before the corporation renders any services. Law corporations register with the State Bar of California; accounting corporations register with the California Board of Accountancy. Applications typically require a copy of the filed Articles, a board-specific form, and a fee that varies by board. Check your board’s site for current procedures.
Practicing without a required registration exposes individual licensees to discipline and can suspend the corporation’s right to practice.
Get an EIN and Decide How You’ll Be Taxed
Apply for a free Employer Identification Number on the IRS website. The online application takes about 15 minutes and issues the EIN immediately. You’ll need it for tax returns, a business bank account, and payroll.
By default, a professional corporation is taxed as a C corporation: the corporation pays tax on profits, and shareholders pay tax again on dividends. Many small professional practices avoid that double layer by electing S corporation status on IRS Form 2553. The election must generally be filed within 75 days of formation, or by March 15 of the tax year you want it to cover. Not every professional corporation qualifies, an S corporation is capped at 100 shareholders and all shareholders must be U.S. citizens or residents, but for most small practices the election meaningfully reduces the tax bill. Talk to a tax advisor first, because the choice affects payroll tax planning and reasonable compensation rules.
Adopt Bylaws and Issue Shares
After filing, hold an organizational meeting of the board of directors to adopt bylaws, appoint officers (at minimum a president, secretary, and treasurer), and authorize share issuance. Bylaws are the internal rulebook: how the board operates, how meetings run, how stock is issued. You don’t file them with the state, but you need them if anyone ever challenges whether the corporation is a real entity rather than a name on paper.
Shares can only be issued to individuals who hold an active license in the profession the corporation practices. The cross-licensing exceptions described above allow certain related professionals to hold up to 49 percent, but the primary licensees must own the majority.
Understand What Liability Protection You Actually Get
A professional corporation is not a malpractice shield. It protects shareholders from the corporation’s general business debts and contract liabilities the same way a standard corporation does, but it does not protect any individual professional from liability for their own malpractice or negligent acts. If you make a professional error, you’re personally liable regardless of the entity.
What the structure does is wall off cross-liability among owners. In a general partnership, every partner’s assets are exposed when any partner commits malpractice. In a professional corporation, your co-shareholders aren’t personally liable for your mistakes and you aren’t personally liable for theirs. For a solo practitioner, the advantage over a sole proprietorship is limited to non-malpractice business obligations. Most boards require or strongly recommend professional liability insurance for anyone practicing through an entity.
Handle the Ongoing Filings
Statement of Information
Within 90 days of formation, file Form SI-550 with the Secretary of State, listing officers, directors, and the agent for service of process. The fee is $25. After that, a Statement of Information (or Form SI-550 NC if nothing has changed) is due every year for the same $25. Missing it knocks the corporation out of good standing.
California Franchise Tax
Every California corporation owes an $800 minimum franchise tax to the Franchise Tax Board each year. New corporations are exempt in their first taxable year, but the bill starts in year two and continues every year afterward whether or not the corporation earned income. It’s separate from income tax. For calendar-year corporations, the $800 is due on April 15, the 15th day of the 4th month of the tax year.
Board Renewals
Professions that require a certificate of registration typically face annual renewal and reporting obligations from their boards. Law corporations, for instance, must renew annually with the State Bar and certify that all shareholders remain licensed attorneys. Even exempt professions should confirm whether their board expects any entity-level filings. Requirements change, and tracking them is on you.