Our Charleston corporate attorneys provide legal counsel to business owners and entrepreneurs seeking to establish professional corporation or restructure an existing one in South Carolina. Our business law firm offers reasonable flat-fee or fixed-fee services for the majority of business organizational matters. Please contact one of our attorneys for more information if you are starting a new business and have questions as to whether a professional corporation is the best entity for your business.
South Carolina Professional Corporation
Our law firm often receives client inquires as to whether his or her business should be formed as a professional corporation. In order to determine whether a business may (or should) be incorporated as a professional corporation, it is important to review both the South Carolina Professional Corporation Supplement and the licensing statutes found in Title 40 of the Code. The following discussion is a brief overview of the Professional Corporation and Title 40.
The Professional Corporation Supplement defines “professional services” as: …a service that may be rendered lawfully only by a person licensed or otherwise authorized by a licensing authority in South Carolina to render the service and that may not be lawfully rendered by a corporation under the statute. Further, the supplement provides that a corporation may elect professional corporation status solely for the rendering of professional services, including services ancillary to them, within a single profession. Therefore, in order to form a professional corporation in South Carolina you must first determine whether your profession is authorized under the supplement. For example, stock brokers are not governed by the provisions of Title 40.
Unlike some states, the South Carolina Professional Corporation Supplement does not require any professions (lawyers, doctors, accountants, etc.) to practice through a professional corporation. Unless a regulatory board under Title 40 requires its professionals to render services through a professional corporation, professionals may choose a different entity in which to conduct their business. In other words, lawyers, doctors, accountants, etc… may form limited liability companies (LLCs) and partnerships to render professional services. Therefore, it is important to review (or contact one of our business attorneys) Title 40 to determine which professions must render services in the professional corporation format, as opposed to the regular corporate, limited liability company, or partnership format. For example, the practice of law by corporations is unlawful pursuant to Section 40-5-320 of Title 40.
Articles of Incorporation
There are several important items required by the articles of incorporation for a professional corporation or PC. The articles of incorporation must be signed by a duly licensed attorney in South Carolina to be approved by the Secretary of State.
A professional incorporating a professional corporation in South Carolina may reserve the exclusive use of a corporate name by delivering an application to the Secretary of State for filing. If there is no other South Carolina using the proposed name, the corporate name will be reserved. The name of the professional corporation must include the designation PC, P.C., Professional Corporation, Professional Association, PA, or P.A. Note, the statute allows the a professional corporation to use the personal name or surname of a shareholder or former shareholder even though other provisions of the general corporation law might prohibit such use.
CAUTION: Although the selection of the PC’s name may be available and approved by the Secretary of State, this does not mean that the name is available for use under federal and state trademark laws. Any new business owner in the preliminary stages of forming a corporation should engage a trademark attorney to conduct a thorough screening of the proposed corporate name on all state trademark databases and the federal database to ensure the name is available for use. It often happens that a business owner will organize a corporation only later to receive a cease and desist or trademark infringement claim. Therefore, it is very important to ensure that the corporate name is not only available with the Secretary of State but also available in the state and federal trademark databases.