Forming a professional corporation in Oklahoma is a relatively straightforward process, but it requires careful planning and attention to detail. The first step is to decide whether a professional corporation is the right legal structure for your business. A professional corporation is a type of corporation that is specifically designed for licensed professionals, such as doctors, lawyers, accountants, and engineers.
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What is a Professional Corporation?
A professional corporation is a legal entity that provides liability protection to the owners, or shareholders, of the corporation. The liability protection extends to the individual professionals in the corporation, which means they are not personally liable for the debts and obligations of the corporation. In addition to liability protection, a professional corporation may also offer tax benefits and easier access to capital and financing.
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Steps to Form a Professional Corporation
To form a professional corporation in Oklahoma, follow these steps:
Step 1: Choose a Name for the Corporation
The first step in forming a professional corporation is choosing a name for the corporation. The name must be unique and distinguishable from other businesses in Oklahoma. It should also accurately reflect the nature of the business and the professional services offered. Once you have chosen a name, you can check whether it is available by searching the Oklahoma Secretary of State website.
Step 2: File Articles of Incorporation
The next step is to file the Articles of Incorporation with the Oklahoma Secretary of State. This legal document establishes the corporation as a legal entity and includes important information such as the name, purpose, address, and registered agent of the corporation. You will also need to pay a filing fee and include a Certificate of Good Standing from your licensing board.
Step 3: Complete Additional Licensing Requirements
In addition to filing the Articles of Incorporation, certain professions in Oklahoma may require additional licensing requirements. For example, lawyers must register with the Oklahoma Bar Association, and doctors must register with the Oklahoma State Medical Board. You may also need to obtain any necessary permits or licenses for your specific profession.
Step 4: Draft Bylaws
Once the Articles of Incorporation have been filed and all necessary licenses have been obtained, the next step is to draft bylaws for the corporation. Bylaws outline the rules and regulations for how the corporation will be run, including how shareholders will be appointed, how meetings will be organized, and how decisions will be made. It is important to ensure that the bylaws comply with the Oklahoma Business Corporation Act and any other applicable laws.
Step 5: Issue Stock
As a corporation, your business is owned by shareholders who own stock in the company. In order to issue stock, the corporation must first approve its issuance and determine its value. This is usually done through a resolution by the board of directors. Once the value has been determined, the corporation can then issue stock certificates to the shareholders.
Step 6: Obtain Other Required Documentation
In addition to the above steps, there may be other documents required to form a professional corporation in Oklahoma. This may include corporate resolutions, stock ledgers, and other paperwork required by the Oklahoma Secretary of State or your licensing board.
Benefits of a Professional Corporation
There are several benefits to forming a professional corporation in Oklahoma, including:
Liability Protection
As mentioned earlier, one of the primary benefits of a professional corporation is liability protection. Individual professionals in the corporation are shielded from personal liability for the debts and obligations of the corporation. This means that if the corporation is sued, creditors can only go after corporate assets, not the personal assets of individual shareholders.
Tax Benefits
Professional corporations can also offer tax benefits, particularly when it comes to income taxes. Generally, professional corporations are taxed at lower rates than ordinary corporations or individuals, meaning they can potentially save money in taxes.
Easier Access to Financing
Another benefit of a professional corporation is access to capital and financing. Because the corporation has a structure and identity separate from its individual shareholders, it may be easier to secure financing from banks or other sources than it would be for a sole proprietorship or partnership.
Conclusion
Forming a professional corporation in Oklahoma can be a good move for licensed professionals looking to limit their personal liability, reduce their taxes, and gain easier access to financing. However, it is important to carefully plan and follow all necessary steps to ensure compliance with Oklahoma law. By working with an experienced legal professional, you can ensure that your professional corporation is set up for success.
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