Of course, few Ohio corporations are owned and operated by amateurs. But a professional corporation or professional association is different than other types of incorporated businesses.
In general, professional corporations are for groups of people in certain types of specialized fields who wish to organize as a single business. These professions include:
- Health care professionals, such as doctors, dentists and physical therapists
- Social workers
Some states require people in those professions who wish to incorporate their practice to do so as a professional corporation. Other states do not require it, but do offer it as an option. Ohio is in the latter category.
Why choose to create a professional corporation? Owners enjoy limited personal liability from the business’ debts and claims against it. It can also protect individual owners from malpractice claims leveled against their partners, though it cannot reduce liability for your own malpractice suits.
Professional associations were somewhat more popular prior to 1986, when this form of corporation gave its owners certain tax benefits. That changed in 1986, and the IRS now taxes professional corporations at a flat 35 percent rate.
Still, there are good reasons for Ohio professionals to consider organizing in this way. But there are other options, like a limited liability company, which offers many of the same protections. Limited partnership and standard corporation are other options. Determining the best fit for you and your partners could be easier with the advice of an attorney who is knowledgeable about business organizations.