Converting a regular Florida corporation to a Florida professional corporation takes some doing. But once you’ve got all your ducks in a row, and everyone in the corporation has signed off on the change, you’re basically good to go. Here we’ll go over what a professional corporation is, how they’re different from regular corporations, and the steps you’ll need to take in order to make the conversion go smoothly.
What Is A Florida Professional Corporation?
A Florida professional corporation (PC) is a business entity similar to a regular corporation, but structured around licensed professionals like accountants, engineers, lawyers, physicians, dentists, and other pursuits that require training. Just like a regular corporation, a PC offers liability protection by keeping the personal assets of the owners separate from the corporation.
Differences between a Florida Corporation and a Florida Professional Corporation
In most cases the traditional Florida corporation is quite similar to a Florida professional corporation. Both have boards of directors, shareholders, and similar tax structures. A PC and regular corporation both offer liability coverage in the event of a lawsuit or bankruptcy. However, while a PC can shield its owners from the malpractice or negligence of their fellow professionals, a PC will not insulate the business partners from lawsuits regarding their own individual bad actions.
Requirements for Florida PCs
Naming requirements. A Florida professional corporation’s name must include “Chartered,” “Professional Association,” or “P.A.” This means that during the conversion from a regular corporation to a PC, you’ll need to ditch the entity descriptor of Inc., or Corp. For example, a professional law corporation would be “Smith, Smith, and Stevens, P.A.”
Shareholder requirements. In accordance with FL Stat § 621.03, a PC’s shareholders must be “duly licensed or otherwise legally authorized to render the same professional service as the corporation.” If your PC is organized to do business in engineering, you can’t have a shareholder who doesn’t have a license in engineering.
Steps To Convert A Florida Corporation To A Florida Professional Corporation
To convert your Florida corporation into a Florida professional corporation, you’ll need to follow these steps:
Step 1: Call a Meeting of Shareholders
If you want to convert your Florida corporation to a Florida PC, all shareholders will need to agree to the conversion.
Step 2: Prepare a Plan of Conversion
Once approved, you’ll need to draw up a plan of conversion. Your plan of conversion will need to list the current name of your corporation, as well as the proposed name of your professional corporation. Remember, even if you’re not changing the name, the identifier at the end of the name will need to change to meet Florida’s PC naming standards.
Step 3: File a Certificate of Conversion
FL Stat § 607.1113 requires that once a plan of conversion has been approved by the board of directors of a domestic Florida corporation, the corporation must then file a Certificate of Conversion ($35) along with a new Florida Articles of Incorporation ($70) with Florida’s Division of Corporations.
Online conversions aren’t yet allowed, so you’ll need to mail your paperwork and check to:
Florida Department of State
Division of Corporations
PO Box 6327
Tallahassee, FL 32314
One thing to note, when filling out your Florida PC’s Articles of Incorporation, you’ll need to take special care to include a non-generic “purpose” under “Article III.” If your Florida PC is engaged in law, you’ll need to write something more than just “law firm” or “practicing law.” Florida wants PC’s to include a specific purpose, like “The PC of Smith, Smith, and Stevens, P.A. will practice maritime and medical malpractice law.”