Professional-CorporationsSouth Carolina Professional Corporation

Typically, it is illegal for licensed professionals to form a South Carolina corporation for the purpose of practicing their licensed profession. The reasoning was that licensed professionals should be prevented from hiding behind the protection of a corporation, in order to avoid any personal liability for their own malpractice. However, there are multiple states, including South Carolina, that have passed special statutes that now permit licensed professionals to form a South Carolina professional corporation, while still holding the professional personally liable for their own malpractice.

If a South Carolina business entity offers a “professional service”, then that entity may, and in some instances should, be incorporated as a professional corporation. The South Carolina Professional Corporation Supplement defines a “professional service” as “a service that may be rendered lawfully only by a person licensed or otherwise authorized by a licensing authority in this State to render the service and that may not be lawfully rendered by a corporation … a corporation may elect professional corporation status…solely for the rendering of professional services, including services ancillary to them, within a single profession.” 

While the Professional Corporation Code does not contain a provision that specifically authorizes professionals to practice as a South Carolina professional corporation, any professional researching business organizations to operate their entity as needs to thoroughly review Title 40, which lists what type of businesses are prohibited from practicing as a “regular” corporation. For example, a South Carolina corporate lawyer cannot practice law through a regular corporation.

A South Carolina professional corporation is organized for the purpose of rendering a category of professional services. Which can be defined as a service which requires licensing from a state agency, the United States Patent Office, or the IRS, before the professional can render the services.

Professional Corporation Designation

A South Carolina professional corporation must specify that the entity is a professional corporation by including one of the following designations in their name:

  • Professional Corporation
  • Professional Association
  • Service Corporation 
  • Chartered
  • P.C.
  • PC
  • P.A.
  • PA

Further, it is commonplace for a professional corporation to use the personal name of a shareholder or former shareholder of the corporation as the corporate name, even though other provisions of “regular” corporate law may prohibit such use. For example, John Rivers, DMD, PC could incorporate as a professional corporation, even if there is another dentist professional incorporated under the identical name.