Professional Law Corporation California
A professional law corporation in California is a special type of entity and only applies to certain types of professionals.3 min read
A professional law corporation in California is a special type of entity. When professionals in this state want to incorporate their practices, they must form a professional corporation, but this only applies to certain types of professionals. Common types of professionals that must follow the professional law incorporation process include:
In this state, you cannot form a limited liability company if you are one of these professionals. Nor can you form a professional limited liability company.
When it comes to ownership of a law firm in California, Rule 3.157 of the Law Corporation Rules of the State Bar is very important. It states that the shares of the law firm have to be owned by either a single attorney or the actual corporation itself.
What Are the Alternatives to a Professional Law Corporation?
There are other alternatives that an attorney can choose from if he or she doesn't want to create a law corporation. The other options include:
- Create a sole proprietorship
- Create a general partnership
- Create a registered limited liability partnership
- Create a professional corporation
California is unlike other states in that it doesn't allow a law firm to create an LLC. Other states do.
How to Create a Professional Corporation in California
If you want to create a professional corporation in the state of California, you will need to start the process by filing articles of incorporation. You will need to submit this document to the Secretary of State. You will also need to pay the appropriate filing fees. You can go to the California Secretary of State website and download the correct form to create a professional corporation. Make sure to follow the included instructions when creating and submitting your articles of incorporation.
What Information Must Be Included in an Articles of Incorporation?
In the articles of incorporation, you must include several pieces of information. For example, you will need to include the name of your corporation, its street address, the name of the person you have deemed as a corporate agent, the purpose of the firm, and how many stock shares it has.
If you are listing an individual person as the corporate agent, you will need to provide this person's street address on the form. You will also need to include an address of where any legal papers can be served to this corporate agent. Additionally, you have to include a statement somewhere in the articles of incorporation that the business is a professional corporation.
Once the articles of incorporation have been submitted, you will then have 90 days to file a Statement of Information and pay any necessary filing fees. You will have to file a Statement of Information and pay any necessary fees on an annual basis.
How to Tell if Your Corporation is a Professional Law Corporation
There are several ways to determine if your corporation is a professional law corporation. First, all of your directors and shareholders and any other officers have to be licensed to practice law. If you happen to have only one shareholder, then your corporation can have only one director, and this person must serve as the corporation's President as well as its treasurer. If the corporation has two shareholders, it can have only two directors. The primary office positions of the corporation can be split among these two shareholders.
To be a professional law corporation, your company has to possess a certificate of registration, and this certificate has to come from the California State Bar. You will also have to make sure that any professional services you provide come through staff members who are licensed to practice law.
In regards to the corporation's stock, it can only be issued by an employee who is licensed to practice law. If any of the stocks are issued by someone else, they are void. If any of the stock shares are transferred to a person, they can only be transferred to someone who is licensed to practice law.
If someone is disqualified from practicing law and they hold some of the corporation's shares, these shares must be acquired or transferred to a different person who has a license to practice law. If they aren't transferred, the corporation's certificate of registration can be revoked.
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