New Jersey Professional Service Corpration Act
The New Jersey Professional Service Corporation Act sets laws and regulations for professional service corporations.4 min read
3. Steps to Form a New Jersey PLLC
The New Jersey Professional Service Corporation Act sets laws and regulations for professional service corporations. A professional corporation is a unique business structure formed by licensed professionals who provide personal services for their clients. Under New Jersey law, one or more licensed or legally certified professionals may organize and become a shareholder.
New Jersey Professional Services Corporation Act
A PSC is a type of business entity made up entirely of certified specialists who provide personal services for their clients. This business model was created to allow certain kinds of professionals to do business as a professional corporation and provide limited liability for the owners. The owners are separate from the corporation and are not held personally responsible for claims or debts brought against it.
- Public accountants
- Land surveyors and planners
- Physical therapists
- Registered nurses
Forming a professional service business as a PLLC provides many advantages for the company.
Personal liability protection from:
- Malpractice actions brought against other members
- Creditors: Personal credit is not affected as a result of unpaid debts owed by the PLLC
- Injuries connected with the PLLC
PLLCs do not cover all liabilities. Professionals are held liable for claims of malpractice and other misconduct. It is important to obtain professional liability insurance.
The New Jersey PSC Act governs professional services throughout the state and establishes requirements to form this type of business entity. The law states that one or more persons, who are legally allowed to provide a specific service within the state, may organize and become a shareholder of the corporation. The corporation can only provide the services in which they are licensed.
- The corporation's name must include either a description clarifying the type of services offered or the full or last names of one or more of the shareholders.
- The name has to end with: "professional association", "chartered," "a professional corporation," or shortened to "P.A.," "P.C.," or "PC."
- Cannot include the following terms: "company," "corporation," or "incorporated."
- Services are limited to licensed specialists.
- Directors must be licensed in the state and include at least one shareholder.
- The company is liable for illegal or careless acts done by any member of the company. The corporation can get into financial or legal trouble and are liable for up the to full value of its property.
- Shareholders are required to be legally certified or licensed to offer services. The company's shares are prohibited from being transferred to anyone outside of the corporation.
- If a shareholder, officer, agent or employee of the corporation becomes disqualified to offer services, they are required to cut all ties with the corporation, which includes termination.
Steps to Form a New Jersey PLLC
Register the Business
Registering a business varies from state to state. Be sure to research all requirements in the state of New Jersey. Forms and certificates are filed through the State of New Jersey Department of the Treasury, either online or by mail. New Jersey law requires a PSC to submit information about the nature of the company. This should include:
- The name of the business
- The purpose of the company
- The number of stock shares
- The name and address of a registered agent
- The corporation's primary business address, which must be in the state of New Jersey
- The name and address of the board of directions
- Name and address of the incorporator. This can be a person or a business
- At least one signature
Prepare Articles of Organization
An article of organization is the primary document for forming the business and is open to the public. In the articles of organization, you must include:
- Your LLC's name
- Address and name of the registered agent
- Business objectives
- Members' names
- The intended lifespan of the company
Submit and File Articles of Organization
Submit articles of organization with the State of New Jersey Department of the Treasury either online or by mail. Approval from the state may be required, depending on the type of profession. File documents as a Public Records Filing with the Division of Revenue within the New Jersey Department of Treasury. It costs $125 to file for the Public Records.
Create An Operating Agreement
Operating agreements are confidential documents that describe the company's ownership and management style as well as members' rights and obligations.
Obtain Business Licenses and Permits
- Acquire all licenses and permits through the State of New Jersey Department of Treasury and the Division of Revenue.
- File for state and federal taxes. The IRS handles federal taxes. Visit the SBA website to obtain all federal permits and licenses.
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