Does a Professional Corporation in Arizona Require State Licensing?

Corporation in Arizona

One of the reasons business owners choose to form a professional corporation in Arizona is that this structure requires state licensing. In this state, you can choose between PCs and professional LLCs. The latter is easier to form and it has certain tax benefits. The former is ideal for high-income providers as it offers better liability protection. 

Licensing Requirements for Professional Corporations in Arizona

Arizona has specific licensing requirements for professionals who wish to form a PC. These requirements are designed to make sure that individuals practicing within the corporation have valid licenses in their respective fields. 

State Regulatory Boards 

Different professions in AZ are overseen by various state regulatory boards. These boards grant and regulate professional licenses. If you wish to form a PC, you should comply with these licensing regulations set forth by your regulatory board.

Arizona Corporation Commission 

Apart from professional licensing requirements, you should also file the necessary documents with the AZ Corporation Commission (ACC). These would include Articles of Incorporation and other required forms. 

What are the Benefits of Choosing a PC in AZ? 

One of the benefits is that this legal structure offers limited liability protection. It means that your personal assets are protected from business debts and liabilities. 

Structured Business Form 

PCs provide a structured and formalized business form. It also offers a clear framework for governance. It can be particularly beneficial if you work collaboratively, as it establishes a defined management structure and decision-making process. 

Ease of Transferability 

This type of structure also provides ease of transferability of ownership interests. It can be advantageous to you if you wish to bring in new partners or transfer ownership shares without disrupting your business continuity. 

Tax Flexibility 

Choosing this structure lets you enjoy flexibility in tax treatment. You can elect to be taxed as a regular corporation or choose pass-through taxation, where your profits and losses are reported on your individual tax returns. 

Enhanced Credibility 

Operating as a PC can enhance your credibility and professionalism. Your clients will perceive you as a more established and reputable entity. In other words, it fosters trust and confidence. 

More Considerations 

When you do choose this structure, it is vital to know that there are other requirements you need to fulfill. For instance, as a PC in AZ, you need to file yearly reports with the AZ Corporation Commission. These reports include updated information about the corporation’s officers, directors, and business activities. You should stay compliant with the reporting as it is vital to maintain good standing. 

Maintaining Professional Licenses

You and the other members of your PC must maintain your professional licenses. In that case, you need to renew your license by complying with the rules and regulations of your profession’s licensing board. 

Insurance Requirements

This is another vital requirement that you must prioritize. Explore and secure the necessary professional liability insurance coverage to protect your company against potential claims. 

Corporation in Arizona

Establishing Your PC 

Starting a professional corporation in Arizona requires complying with the state’s licensing requirements. However, the advantages of limited liability protection and tax liability make PC an appealing choice for many licensed professionals, including yourself. If you wish to start a PC but are not sure how, please contact our experts. You may also check out the forms on the left side of this page.