California has a specific business entity for those who are licensed professionals such as doctors, healthcare professionals, lawyers, CPA’s, architects and engineers. The entity is called a “Professional Corporation” or PC. The formation of a Professional Corporation in San Diego or PC saves licensed professionals substantial sums of money. It provides specific operational advantages and the ability to deduct expenses in ways that are different from the traditional corporation or LLC, while providing additional and valuable protections from creditors for each unique shareholder.
One of the challenges associated with a company of professionals is the liability associated with malpractice. In a traditional LLC or corporation if a liability such as malpractice were to occur, all of the owners, members or shareholders may be placed at risk. In a Professional Corporation or PC, each professional is separated and protected from the actions of a single practitioner. This unique level of protection allows the business to continue normal operations, even when one of the shareholders or professionals associated with the PC faces malpractice or litigation separately.
Another important advantage of the formation of a Professional Corporation in San Diego lies in the ability to offer and deduct critical expenses such as health insurance, disability insurance, life insurance and even dependent care. The Professional Corporation or PC is also able to process heavier retirement benefit contributions such as 401(k) programs. This allows professionals to put away additional contributions to their retirement accounts while taking advantage of tax savings and peak earning cycles.
There are many important restrictions associated with Professional Corporations or PCs. The company must be owned by a licensed professional and there are limitations on voting rights and other corporate structures associated with the Board of Directors, corporate officers and shareholders. The Watkins Firm has decades of experience serving medical practices and healthcare organizations here in San Diego. If you are interested in the formation of a Professional Corporation in San Diego we invite you to contact us for a free and substantive consultation at 858-535-1511.