Texas Professional Corporation Form

What is the Texas Professional Corporation

A Texas Professional Corporation is a specific type of business entity designed for licensed professionals, such as doctors, lawyers, and accountants, allowing them to operate their practices in a corporate structure. This form provides liability protection, meaning that the personal assets of the owners are generally shielded from the debts and liabilities of the corporation. It is essential for professionals to understand that while a Texas Professional Corporation offers certain protections, it does not eliminate personal liability for malpractice or professional misconduct.

How to obtain the Texas Professional Corporation

To establish a Texas Professional Corporation, individuals must first ensure they meet the eligibility criteria, which typically includes holding a valid professional license in Texas. The process begins with choosing a unique name for the corporation that complies with state regulations. Next, the Articles of Incorporation must be filed with the Texas Secretary of State, accompanied by the required filing fee. Once the Articles are approved, the corporation must obtain any necessary business licenses or permits specific to their profession.

Steps to complete the Texas Professional Corporation

Completing the Texas Professional Corporation involves several key steps:

1. Choose a name that complies with Texas naming requirements.
2. File the Articles of Incorporation with the Texas Secretary of State.
3. Pay the required filing fee.
4. Obtain a Federal Employer Identification Number (EIN) from the IRS.
5. Draft corporate bylaws and hold an initial board meeting.
6. Apply for any necessary licenses or permits related to your profession.

Legal use of the Texas Professional Corporation

The Texas Professional Corporation must operate within the legal framework established by Texas law. This includes adhering to regulations regarding the professional services offered, maintaining proper corporate records, and fulfilling annual reporting requirements. It is important for professionals to consult legal counsel to ensure compliance with all applicable laws and regulations, as non-compliance can lead to penalties or loss of professional licenses.

Key elements of the Texas Professional Corporation

Several key elements define a Texas Professional Corporation:

• Professional Licensing: All shareholders must be licensed professionals in the field the corporation serves.
• Limited Liability: Protects personal assets from business liabilities.
• Corporate Structure: Requires formalities such as bylaws, meetings, and record-keeping.
• Tax Treatment: May be subject to corporate taxation, depending on the structure chosen.

State-specific rules for the Texas Professional Corporation

Texas has specific rules governing the formation and operation of Professional Corporations. These include requirements for the number of directors, the necessity of a registered agent, and the obligation to file annual reports. Additionally, certain professions may have additional regulations that must be followed, such as maintaining specific insurance coverage or adhering to ethical standards set by professional boards.