A professional association, also referred to as a professional corporation in Florida is created to provide efficient services in a particular field. Every shareholder in the corporation is expected to be certified in the professional service area, which includes any service that necessitates a license or regulatory approval.
The Florida Professional Service Corporations and Limited Liability Companies Law (Title XXXVI, Chapter 621, Florida Statutes) and the Florida Business Corporation Act (Title XXXVI, Chapter 607, Florida Statutes) regulate professional associations in Florida.
The association is expected to obtain every work-related permit, and will also have to apply for a Federal Employer Identification Number (FEIN). A professional association with a single owner, manager, and administrator offers the same advantages as an association with several owners, managers, and executives.
Note that you have little or no personal liability as a shareholder in a professional association for issues or debt that emerge in the normal course of business or because of the gross negligence of other stakeholders at the enterprise.
Howbeit, if your professional association is administratively dissolved due to the inability to submit an annual report, it can be re-established at any moment by reimbursing the renewal cost and submitting the appropriate form. Owing to that, it is better to run your business as a professional association rather than a Limited Liability Partnership (LLP).
Important Facts about Professional Associations in Florida
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Requirement for a Single Purpose
As was noted above, professional associations in the sunshine state can be established to provide professional services in a particular field. The shareholders of the corporation are expected to be certified to provide offerings within the same service area.
Any kind of individual service that tends to require a license or regulatory permission, such as a chiropractor, physician, qualified chartered accountant, dentist, specialist, veterinarian, life insurance agent, architect, attorney at law, etc, is considered professional.
Note that every shareholder would need a license to conduct the same business services, and the objective of the professional association will be expected to be the same. Shareholders are not obligated to provide services to this association; however, other workers or representatives are allowed to provide those offerings if they are permitted or approved professionals in that field.
On-licensed workers who are allowed to provide non-professional functions for the corporation include clerks, secretaries, bookkeepers, technicians, and other assistants.
Name Requirements for a Professional Association in Florida
The terms “chartered,” “professional association,” or “P.A.” is expected to appear on a professional association. It is forbidden to use certain words, including company, professional service corporation, incorporated, or any other term, acronym, affix, or prefix denoting the existence of a professional association.
The title can include most or all of the shareholders’ last names. Note that unless the professional association has listed its title as a fictitious name with the Florida Department of State, Division of Corporations, “chartered,” “professional association,” or “P.A.” cannot be excluded from its name.
Whenever a commercial entity in Florida conducts business under a title different from the shareholder’s lawful personal name or a legally documented corporate name, trademark, or service mark, it is meant to sign up for a fictitious name.
If a professional association fails to register a fictitious name, it will have to use the words “chartered,” “professional association,” or the abbreviation “P.A.” in its name.
Restriction on Stock Ownership
Florida professional associations are subject to shareholding limitations. A professional association in the sunshine state or a person who is formally certified to offer the exact services the association provides, is granted ownership stakes in a professional association.
Have in mind that the same equity limitations apply to any sale or transfer of professional association stock. A voting trust agreement or any similar agreement that could enable another person to exert the voting power of a portion or all of the person’s equities is barred for shareholders of a professional association.
Filing Your Articles of Incorporation
To establish your professional association in the sunshine state, you will have to submit your articles of incorporation to the Division of Corporations of the Florida Department of State (DFCD). Nevertheless, for forms and details on submission payments, how or when to e-file, and the postal address for forwarding your articles of incorporation, reach out to the Florida Sunbiz website.
Consider leveraging the profit articles of incorporation form on the Florida Sunbiz website to generate your articles. Ensure to comply with the on-screen guidelines. Your articles must contain the following elements:
- Your professional association’s name
- If different, the street address of the corporate headquarters and the postal address of the corporation. (A post office box can be used as the mailing address)
- A specific goal for your professional association
- The registered agent’s name and Florida street address (post office box addresses are not acceptable)
- The notarized acceptance of the nomination as registered agent by the registered agent
- The incorporator’s name and address
- The incorporator’s signature
- In your articles, you may also include an opening date that is no more than five business days before the date of receipt or 90 days from the date of submission.
Licenses and Permits
Make inquiries about local permit and business license prerequisites, via call or online. You can visit the sites of city and county government offices in your area. Licensing and registration data will be accessible at the Florida Small Business Development Centers for towns and counties under their regulatory authorities.
The Florida Department of Agriculture and Consumer Services, as well as the Florida Department of Business and Professional Regulation, also have valuable details. You could use the online sites of these organizations to learn about licenses and permits, look up documentation, request a new or renewed license, and discover exam details.
Other Factors to Consider
Even before your professional association is established, you are expected to abide by both the tax and other compliance standards that pertain to a professional association in Florida. Review the Florida Department of Revenue website for state corporate tax details.
Inspect the Internal Revenue Service (IRS) webpage for details on federal employer identification numbers, federal income tax paperwork criteria, tax articles, and structures.
Conclusion
If your profession necessitates a license in the state and you would like to set up your own business, then establishing a professional business entity, like a professional association or a professional limited liability company would be the best option.
Note that establishing a professional association in the sunshine state can help in protecting you from personal liability, which is often critical to your economic health. To establish a Florida professional corporation, you are not obligated to hire a lawyer, but getting advice might serve better by reducing the amount of time.