Starting a Professional Corporation in Oklahoma 2024: Ultimate Guide

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How to Start a Professional Corporation in Oklahoma

Licensed professional? Level up your business with Oklahoma professional corporation! Enjoy unique benefits like Oklahoma LLC, such as limited liability, tax perks, and a polished image. Our step-by-step guide unravels the essentials for smooth compliance and the right fit. LLCBase has your back with expert guidance, so make an informed decision and triumph in Oklahoma with your professional corporation today!

This guide will review the requirements for starting a professional corporation in Oklahoma, explore the advantages and disadvantages of this business structure, and help you determine if it is the right fit for your business goals.

Start a Professional Corporation

What is a Professional Corporation

A Professional Corporation (P.C.) is a unique type of corporation designed for licensed professionals, such as doctors, dentists, lawyers, architects, and accountants. Forming a P.C. allows licensed professionals to offer their services through a corporate structure, providing them with the benefits of a traditional corporation, such as limited liability protection and tax advantages. Forming a professional corporation in Oklahoma is a popular choice due to the thriving professional landscape and business-friendly environment. When starting a professional corporation, choose a reliable formation service in Oklahoma.

The primary purpose of Oklahoma Professional Corporation is to protect its owners from personal liability for the corporation’s actions. The shareholders’ personal assets are protected if the professional corporation faces legal issues. Moreover, Oklahoma professional corporations can offer certain tax benefits, such as deducting employee benefits and operating expenses. These advantages make forming a professional corporation an attractive option for many professionals in Oklahoma.

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Who Can File Under Professional Corporation Laws

Under Oklahoma Professional Corporation laws, only certain licensed professionals are eligible to form a professional corporation. The specific professions allowed to form a P.C. may vary slightly by state, but in Oklahoma, the following professionals can typically form a professional corporation:

  • Physicians and Surgeons
  • Dentists
  • Chiropractors
  • Optometrists
  • Podiatrists
  • Certified Public Accountants
  • Architects
  • Engineers and Land Surveyors
  • Psychologists
  • Marriage and Family Therapists
  • Clinical Social Workers
  • Professional Clinical Counselors
  • Veterinarians
  • Attorneys
  • Speech-Language Pathologists
  • Pharmacists
  • Registered Nurses
  • Physical Therapists
  • Occupational Therapists
  • Acupuncturists

Each profession has its governing licensing board, which sets specific rules and regulations for forming and operating a professional corporation. It is essential to check with the relevant board and state laws to ensure that your profession is eligible to form a professional corporation and to understand the specific requirements associated with your profession.

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Structure of a Professional Corporation

  • Shareholders: Oklahoma Professional Corporation’s shareholders must be licensed professionals in the same field as the corporation’s purpose. For example, if a professional corporation is formed to offer legal services, all shareholders must be licensed attorneys. This requirement ensures that the professional corporation’s management comprises qualified individuals with relevant expertise.
  • Directors: The directors of a professional corporation in Oklahoma are responsible for overseeing the corporation’s operations and making high-level decisions. The directors must also be licensed professionals in the same field as the corporation’s purpose. The number of directors required depends on the specific licensing board’s regulations, but typically a minimum of one director is needed.
  • Officers: The officers of Oklahoma Professional Corporation manage the professional corporation. Officers typically include a President, Secretary, and Treasurer. However, additional officers can be appointed as needed. While not all officers must be licensed professionals, the President must hold a valid license in the same field as the corporation’s purpose.

Starting a Professional Corporation in Oklahoma: A Guide

Here is a detailed guide to starting a professional corporation in Oklahoma that you should follow.

Step 1: Appointment of Registered Agent

The first step in forming a Professional Corporation is appointing Registered Agent in Oklahoma. This individual or company will act on behalf of the corporation, receiving official notices and legal documents. The agent must have a physical address in Oklahoma and be available during regular business hours.

We compiled the list of the best registered agent services in Oklahoma to help you choose the one you can rely on.

Step 2: Choosing the Name of the Corporation

Selecting a name for your Oklahoma Professional Corporation is crucial. The name must be unique and appropriate, including the words “professional corporation” or the abbreviation “P.C.” It must also comply with the rules and regulations of the governing licensing board and should not be confusingly similar to an existing corporation’s name.

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Step 3: Drafting of By-laws

By-laws are the internal rules and regulations governing the management and operations of the professional corporation. These should include provisions related to the appointment of directors, issuance of shares, and any restrictions imposed by the licensing board.

Step 4: Appointment of Board of Directors

The board of directors oversees the management and operations of the Oklahoma Professional Corporation. Directors must be licensed professionals in the same field as the corporation’s purpose.

Step 5: Conduction of Board Meetings

Regular board meetings are essential for maintaining the proper functioning and compliance of the professional corporation. The by-laws should specify the frequency, notice requirements, and procedures for conducting these meetings.

Step 6: Issuance of Corporate Shares

Shares represent ownership in the corporation. The professional corporation must issue shares to its shareholders, who must be licensed professionals in the same field. Share issuance should comply with the by-laws and any restrictions imposed by the licensing board.

Step 7: Comply with State Requirements

Forming Oklahoma Professional Corporation requires compliance with specific state requirements, such as obtaining necessary permits and licenses, paying fees, and adhering to rules and regulations the governing licensing board sets forth.

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Step 8: Filing of Statement of Information

Oklahoma professional corporations must file an annual report with the Oklahoma Secretary of State. This document includes essential information about the corporation, including its name, address, Registered Agent, and directors.

Step 9: Getting Tax Permits from the State

The professional corporation must obtain the necessary tax permits from the Oklahoma Tax Commission, such as an Employer Identification Number (EIN) from the Internal Revenue Service (IRS).

Step 10: Opening of a Bank Account

Finally, open a separate bank account for the Oklahoma Professional Corporation to maintain proper accounting and financial records.

Fees Associated with Professional Corporation in Oklahoma

Here are some of the most common fees when starting a professional corporation in Oklahoma.

  • State Laws and Regulations: To form a professional corporation in Oklahoma, it is crucial to comply with the state laws and regulations governing professional corporations. The Oklahoma Statutes Title 18 and the specific licensing board’s regulations for each profession outline the requirements and restrictions for professional corporation formation. Before starting the process, professionals should consult with their licensing board to ensure they meet the necessary qualifications.
  • Incorporation Process: Once the licensing requirements are met, the next step to form a professional corporation in Oklahoma is to draft and file the Certificate of Incorporation with the Oklahoma Secretary of State. This document includes essential information about the corporation, such as its name, address, purpose, and number of authorized shares. Filing the Certificate of Incorporation requires a filing fee currently $50 for most professions. However, it is essential to check with the Oklahoma Secretary of State for the specific fee associated with your profession.
  • Naming Requirements: You must follow specific rules when choosing a name for a Professional Corporation in Oklahoma. The name must include the words “Professional Corporation,” “P.C.,” or “Prof. Corp.” Additionally, the name cannot be misleading or too similar to an existing corporation’s name. Conducting a name search with the Oklahoma Secretary of State is recommended to ensure the chosen name is available. This search is free, but reserving a name before filing the Certificate of Incorporation requires a reservation fee of $25 online and $25 mail.
  • Certificate of Incorporation: The Certificate of Incorporation is a critical document for forming a professional corporation in Oklahoma. It outlines the corporation’s essential information, such as the name, address, purpose, and number of authorized shares. The Articles must also include a statement that the corporation is a professional corporation and the specific profession it practices. Once completed, the Certificate of Incorporation must be filed with the Oklahoma Secretary of State, accompanied by the appropriate filing fee.
  • Additional Fees and Costs: In addition to the filing fees mentioned above, forming Professional Corporation in Oklahoma may involve other costs, such as:
    • Annual Report: professional corporations must file an initial Statement of Information with the Oklahoma Secretary of State every Anniversary month of the corporation of filing the Certificate of Incorporation. The filing fee for this form is $25.
    • Licensing and Permit Fees: Depending on the specific profession, the governing licensing board may require additional licensing and permit fees.
    • Registered Agent Fee: Hiring of Registered Agent service will likely involve an annual fee of $50 – $150, which can vary depending on the service provider.
    • Legal and Accounting Fees: Forming a professional corporation may involve consulting with attorneys and accountants, which can result in additional professional fees.

Advantages of a Professional Corporation

  • Limited Liability Protection: One of the main benefits of a professional corporation is its limited liability protection to its shareholders. This means the shareholders’ assets are protected from the corporation’s debts and liabilities.
  • Tax Benefits: Professional Corporations enjoy specific tax benefits, such as deductions for business expenses and the ability to retain earnings within the corporation.
  • Business Credibility: Operating as a professional corporation can enhance the credibility and reputation of the professional services, demonstrating a commitment to compliance and professionalism.
  • Continuity of Operations: A professional corporation has a perpetual existence, ensuring the continuity of operations even if the shareholders or directors change.

Disadvantages of a Professional Corporation

  • Complexity and Cost of Formation: Forming a professional corporation can be more complex and costly than other business structures, such as sole proprietorships or partnerships.
  • Ongoing Compliance Requirements: professional corporations must adhere to ongoing compliance requirements, including regular board meetings, filing annual reports, and maintaining proper records.
  • Limited Flexibility in Management: professional corporations may need more flexibility in management, as the board of directors must consist of licensed professionals in the same field.

Taxation of Professional Corporations

Here are the taxes that your professional corporation must pay in Oklahoma:

Federal income tax

A professional corporation in Oklahoma is subject to federal income tax on its net earnings. However, a P.C. can elect to be taxed as an S corporation, which allows the corporation’s income, deductions, and credits to pass through to the shareholders. This can result in significant tax savings by avoiding double taxation.

State taxes

Oklahoma Professional Corporation is also subject to state taxes, such as the Oklahoma franchise tax, which is based on the corporation’s annual net income. Additionally, depending on the nature of its operations, the professional corporation may be subject to other state and local taxes, such as payroll and sales taxes permit in Oklahoma.

Tax deductions and exemptions

A professional corporation in Oklahoma can take advantage of various tax deductions and exemptions, such as deductions for employee benefits, operating expenses, and depreciation. These deductions can help reduce the corporation’s taxable income, ultimately leading to tax savings for the P.C. and its shareholders.

Alternatives to Professional Corporations in Oklahoma

If you decide that a professional corporation is not for you, then you might consider the following alternatives.

  • Sole Proprietorships: A simpler business structure is where an individual operates the business under their name without limited liability protection.
  • Partnerships: Two or more individuals join to operate a business, sharing profits, losses, and responsibilities.
  • Limited Liability Companies (LLCs): A hybrid business structure that combines the limited liability protection of a corporation with the tax benefits and flexibility of a partnership.
  • S-corporations: Starting an S Corp in Oklahoma avoids double taxation by allowing income, losses, and deductions to pass through to the shareholders’ personal tax returns.

FAQs

What is a professional corporation in Oklahoma?
A professional corporation in Oklahoma is a legal entity designed for licensed professionals such as doctors, lawyers, accountants, dentists, engineers, etc.
Why is starting a professional corporation different or challenging than other types of businesses in Oklahoma?
Starting a professional corporation is different than other types of businesses because it requires all shareholders of the corporation to be licensed professionals in Oklahoma.
Do I need to hire a lawyer to help me start a professional corporation in Oklahoma?
It is highly recommended to hire a lawyer with experience in business entity formation in Oklahoma, especially for professional corporations.
Are there any state-level filing or registration requirements for professional corporations in Oklahoma?
Yes, to operate a professional corporation in Oklahoma, you need to file Articles of Incorporation with the Oklahoma Secretary of State and submit a licensing application to the appropriate licensing board.
Can I file my Articles of Incorporation online for my professional corporation in Oklahoma?
Yes, the Oklahoma Secretary of State provides an online filing system for business documents like Articles of Incorporation.
How long does it take to get my professional corporation approved by the state in Oklahoma?
Processing times can vary, but it usually takes on average 3-5 business days to get your professional corporation approved in Oklahoma.
How much does it cost to start a professional corporation in Oklahoma?
Professional corporation filing fees in Oklahoma cost a minimum of $125 for the articles of incorporation plus variable fees for certain services, so it ultimately depends on the services you need.
What kind of taxes should I expect to pay when operating a professional corporation in Oklahoma?
Professional corporations in Oklahoma must pay the same state and federal taxes as regular corporations, such as corporate income tax, sales tax for certain services, and employment taxes.
Do I need to have a physical office in Oklahoma to register my professional corporation here?
No, you do not physically have to have an office in Oklahoma to form a professional corporation, but your corporation needs a registered Oklahoma agent to record any legal documents.
Can I register multiple professional licenses under the same professional corporation in Oklahoma?
Yes, it is possible to register for multiple professional licenses under the same professional corporation, but you must file separate applications with each relevant licensing board.
Do I need an Oklahoma state license to form a professional corporation if I already hold a professional license in another state?
No, as long as you hold a valid and active professional license in any state, you can qualify to form a professional corporation in Oklahoma.
Can I change my professional corporation structure from a professional limited liability company to a professional corporation after registering in Oklahoma?
Yes, it is possible to change your entity structure, but it involves restructuring process and compulsory approval from relevant governance authorities.
Do all shareholders of a professional corporation have to be licensed to practice in the same profession in Oklahoma?
It may sometimes be possible for shareholder ownership% to cross-professions. For example, a doctor can own the majority share as a partner, with another profession a lesser share.
Can my professional corporation legal structure also protect me from personal liability in Oklahoma?
Yes, organizing your business as a corporation structure can help manage financial and personnel risks. Also, these corporations help avoiding individual liabilities for debts accrued in company names in Oklahoma.
Can I get online services training or resources site from Oklahoma government relating to structuring or operating as a professional corporation?
Oklahoma Business One-Stop acquires different online resources and information related to structuring, registering, and operating as a professional corporation.
Can publicly traded companies’s subsidiary be a PC (professional corporation) in Oklahoma?
Publicly traded companies cannot qualify to be professional corporations is it not permitted.
Can I use names with initials for the professional corporation rather than full names in Oklahoma?
Oklahoma law states that every business name must comply with the state’s Non-Profit Corporation Act.
Does the state of Oklahoma issue a separate tax ID number to professional corporations?
Yes, and you will need one for your federal taxes. In Oklahoma, you can get help obtaining employer identification by contacting the Oklahoma Tax Commission.
Are there any annual reporting requirements for professional corporations in Oklahoma?
Professional corporations in Oklahoma may require annual reporting as it is necessary to advise Oklahoma governments of changes provide bylaws change update or other significant corporation files.
If I’m not an Oklahoma resident currently, what is the process like to form a professional corporation in Oklahoma?
Non-resident interested in filing for professional corporations in Oklahoma majorly go hand-in-hand such as those established for Oklahoma residents.
Can non-licensed individuals be employed by professional corporations in Oklahoma?
Yes, unlicensed individuals can be employed in a professional corporation as long as their work does not constitute practicing a licensed profession.
Can I reserve a business name for my professional corporation in Oklahoma?
Yes, you can reserve your professional corporation name in Oklahoma, after searching the availability of the name.
What is the process like to file for a tax-election for my business entity structure in Oklahoma?
Formal validation can happen through several specified governmental governing authorities depending upon your entity structure and type, a CPA’s assistance in Oklahoma shall always be beneficial.
Can my professional corporation do business in other states outside of Oklahoma?
Yes, your professional corporation can handle transactions and negotiate business in many US-states the structure and guidelines of the corporation’s registration must acknowledge any necessary permit requirements.
Can I have stock options outside of a certificate of professional incorporation paper for professional company stock certificates in Oklahoma?
Yes, though it will be expected of you in accepting the necessary certifications issued through authorized recording office of Oklahoma governance.
How is a professional corporation different from an LLC in Oklahoma?
Performance requirements like the qualifications and structural characteristics of both entities show differences. It indubitably aligns with the idea of professional corporation’s performance requirements being exclusive primarily to licensed profession-founders, whereas making an LLC steers away from these preliminaries.
When registering a professional corporation in Oklahoma, I end up doing it alongside other business-related requirements to affirm my eligibility?
To ensure conformity, these corporations will end up paying attention to assure statewide nomination and practices. It is advisable for most founders to get legal guidance as a whole.
Where can I turn to for compliance necessities, such as timeline sections of annual reports/articles registration, for professional corporations in Oklahoma?
For compliance help, operating hassle-free, the Oklahoma Secretary of State plays an immense role in supervising all governmental procedures with legal obligations of previously registered corporations well-being informed.

Also Read

How to Save Money While Forming Oklahoma Professional Corporation

One of the first ways to save money when forming an Oklahoma professional corporation is to do your homework. Research the requirements and regulations for forming a professional corporation in the state. This will help you understand the process and avoid any unnecessary costs or delays. By educating yourself on the necessary steps, you can ensure that you are not overspending on legal fees or other professional services.

Another way to save money when forming a professional corporation in Oklahoma is to consider using online resources and services. Many websites offer affordable options for registering a new business entity, providing templates for necessary documentation, and guiding you through the steps of forming a corporation. By utilizing these resources, you can save on legal fees and other professional services that may be necessary when setting up your professional corporation.

It is also important to consider the structure of your professional corporation when trying to save money. Depending on the nature of your business and your long-term goals, you may be able to take advantage of different formation options that offer cost savings. For example, forming an LLC instead of a traditional corporation may save you money on initial filing fees and ongoing administrative costs.

When it comes to hiring professionals to assist with forming your Oklahoma professional corporation, be sure to shop around and compare prices. While it is important to have expert guidance during this process, you should not overspend on professional services that may not be necessary. Look for professionals who offer competitive rates and are willing to work with you to create a cost-effective plan for your new professional corporation.

In addition to being careful about your spending during the formation process, it is important to think about the long-term financial health of your professional corporation. By creating a budget and sticking to it, you can ensure that your new business will be successful and profitable. Consider the costs of ongoing maintenance, such as annual filings and taxes, and plan accordingly to avoid any financial surprises.

Overall, saving money while forming an Oklahoma professional corporation is possible with careful planning and research. By educating yourself on the process, utilizing online resources, considering different formation options, comparing prices for professional services, and creating a budget, you can ensure that your new professional corporation is set up in a cost-effective manner. By taking these steps, you can save money now and set your business up for long-term success.

Conclusion

Oklahoma Professional Corporation can offer several benefits for licensed professionals. However, it is essential to carefully consider the proper structure and compliance requirements before proceeding. Seeking professional guidance in forming a professional corporation can help ensure a smooth process and enable professionals to focus on providing their services. Visit LLCBase for more information about starting a professional corporation in Oklahoma.

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