Texas P.C. (Professional Corporation)

When this entity is usually a good fit

• Licensed professionals seeking corporate governance structure
• Professional firms expecting investor-style governance discipline
• Practices where bylaws/board structure align with operations

Key risks and watch-outs

• Ownership and transfer restrictions can be profession-limited
• Corporate recordkeeping discipline is required to preserve formality benefits
• Professional board and liability requirements still apply

Step-by-step formation workflow

1. 1) Verify profession-specific corporate eligibility

   Confirm profession can organize as P.C. and identify license/owner restrictions.

2. 2) File professional corporate charter

   Submit current SOS professional corporation filing package with proper professional statements.

3. 3) Adopt bylaws and issue shares

   Set governance, election mechanics, and transfer restrictions tied to licensure rules.

Taxes, costs, and annual compliance

• Review federal tax election implications with qualified tax counsel.
• Professional and corporate compliance overhead should be budgeted together.
• Franchise tax/public information reports generally apply.

Compliance timeline checkpoint

1. Formation Month · Days 1-30

   Finalize filings, EIN, ownership records, and operating governance documents.

2. Quarterly Operations · Every 90 days

   Validate registered agent, ownership changes, and internal record hygiene.

3. Annual Compliance Cycle · Each report year

   Prepare franchise tax and public-information filings by current Texas deadlines.

Professional-entity rule reminders

• Board/regulatory restrictions may limit who can own or control shares.
• Formation and post-formation compliance differ by licensed profession.