Are you an aspiring professional looking to start your own business in DC? Forming a professional corporation in the nation's capital can be a rewarding and challenging endeavor. This guide will provide you with all the information you need to know to successfully establish your professional corporation in DC by 2023.
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What is a Professional Corporation?
A professional corporation (PC) is a special type of business structure that is used primarily by licensed professionals, such as doctors, lawyers, accountants, and architects. In DC, professional corporations are regulated by the DC Department of Consumer and Regulatory Affairs (DCRA) Corporations Division.
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The main advantage of forming a professional corporation is that it offers limited liability protection to its shareholders or owners. This means that individual professionals are generally not personally liable for the debts and liabilities of the corporation, similar to a regular corporation.
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Step 1: Choose a Name
Before you can form a professional corporation in DC, you need to choose a unique name for your business. The DCRA has strict rules regarding business names, so it's important to ensure that your chosen name is not already in use by another entity. You can conduct a name search on the DCRA's website to check for name availability.
Additionally, DC corporate law requires professional corporations to include specific words or abbreviations in their names to indicate that they provide professional services. For example, attorneys must use the words "professional corporation," "professional association," or "P.C."
Step 2: File Articles of Incorporation
Once you have selected a name for your professional corporation, you'll need to file Articles of Incorporation with the DCRA. This legal document contains important information about your business, such as the name, purpose, duration, and registered agent of the corporation.
To file the Articles of Incorporation, you can either submit a paper form or file online through the DCRA's website. The filing fee for paper forms is $230, while online filers pay a reduced fee of $220. Make sure to carefully review the information you provide before submitting your application to avoid any delays or complications.
Step 3: Appoint a Registered Agent
DC law requires every professional corporation to appoint a registered agent who will accept legal documents and official correspondence on behalf of the corporation. The registered agent can be an individual resident of DC or a business entity authorized to do business in DC.
It's important to choose a reliable and responsible registered agent to ensure that you don't miss any important legal notices or documents. The registered agent's name and address should be included in the Articles of Incorporation and filed with the DCRA.
Step 4: Obtain Necessary Licenses and Permits
Before you can actively engage in your profession and provide professional services, you may need to obtain additional licenses or permits specific to your profession. Licensing requirements vary depending on the type of services you will provide, so it's crucial to do thorough research and consult with the relevant professional associations or boards in DC.
For example, if you're a licensed attorney, you must be a member of the DC Bar and comply with its regulations. Doctors and medical professionals must meet licensing requirements set by the DC Board of Medicine or DC Board of Pharmacy.
Step 5: Register for Taxes and Employment Purposes
As a professional corporation, you'll likely need to register with various tax authorities and fulfill employment-related obligations. This includes obtaining an employer identification number (EIN) from the Internal Revenue Service (IRS).
Additionally, you'll need to register for state taxes with the DC Office of Tax and Revenue. Depending on your business activities, you may also have to register for sales and use tax, employer withholding tax, and unemployment tax.
Step 6: Comply with Ongoing Reporting Requirements
Once your professional corporation is up and running, you have certain ongoing reporting requirements to fulfill in order to maintain compliance with DC corporate law. This includes filing an Annual Report with the DCRA, which includes updated information about your corporation and a filing fee.
Failure to file the Annual Report on time can result in penalties and even the revocation of your corporation's status. Therefore, it's important to be aware of the filing deadlines and ensure you submit the report within the specified timeframe.
Conclusion
Forming a professional corporation in DC is a detailed and structured process. By following these steps and thoroughly understanding the requirements, you'll be well on your way to establishing your own professional corporation and providing your services in the nation's capital. Remember to consult legal and financial professionals for personalized advice and support throughout the process. Good luck with your professional corporation journey in DC!
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