> ## Documentation Index
> Fetch the complete documentation index at: https://mso.getlemma.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Form a professional corporation

> File articles of incorporation for a PC: professional purpose clause, licensee attestations, board pre-approvals, bylaws, share issuance, and the EIN.

This guide walks the mechanical steps of forming a professional corporation. It assumes you have already chosen your state and confirmed that a PC is the required form — if not, start with [PC vs PLLC vs PA](/concepts/entities/pc-vs-pllc-vs-pa).

Have healthcare counsel file this or review the filing. A defective professional entity formation can invalidate payer contracts signed in its name and is expensive to correct after enrollment.

## Prerequisites

* A licensed clinician who will own the entity, verified: active license, no disciplinary action, clear on [OIG LEIE](https://exclusions.oig.hhs.gov/) and [SAM.gov](https://sam.gov/)
* Your state's permitted entity form confirmed — see your [state page](/reference/legal/states/california)
* A name that satisfies professional entity naming rules
* A registered agent in the state of incorporation
* Healthcare counsel engaged

## Steps

<Steps>
  <Step title="Clear the name with both authorities">
    Check availability with the secretary of state **and** compliance with the licensing board's naming rules. Most states require a designator — "P.C.", "Professional Corporation" — and some restrict the name to licensed owners' surnames or require board approval of a trade name.

    Reserve the name if the state permits it. File a DBA separately if your brand differs from the legal name.
  </Step>

  <Step title="Obtain licensing board pre-approval, if required">
    Several states require a certificate or approval from the professional board **before** the secretary of state will accept the filing. New York routes professional entity filings through the State Education Department; Arkansas requires a medical board certificate.

    Budget 4–8 weeks in pre-approval states. Check your state page before assuming a same-week filing.
  </Step>

  <Step title="Appoint a registered agent">
    Required in the state of incorporation. If you'll expand, consider a national vendor now — see [Choose registered agents across states](/guides/formation/choose-a-registered-agent).
  </Step>

  <Step title="File articles of incorporation">
    Must include:

    * **A professional purpose clause** limiting the corporation to rendering the specified professional service
    * **A licensee ownership attestation** stating all shareholders are licensed
    * Share structure, one class of common stock, a modest number of authorized shares
    * Registered agent and registered office
    * Incorporator (should be the clinician or counsel, **never** the MSO)
  </Step>

  <Step title="Hold the organizational meeting and adopt bylaws">
    By written consent is fine. Elect directors and officers — **all licensees where the state requires it** — adopt bylaws, authorize share issuance, and authorize opening bank accounts and naming signers.

    File the consents in a minute book. These records are evidence the PC is a real, separately governed entity, which is exactly what a CPOM challenge attacks. See [Maintain corporate formalities](/guides/formation/maintain-corporate-formalities).
  </Step>

  <Step title="Issue the stock certificate with a restrictive legend">
    Issue shares to the clinician. The certificate must carry a **restrictive legend** referencing the stock transfer restriction agreement. Without the legend, a transferee could argue they took free of the restriction.

    Execute the transfer restriction agreement at or immediately after issuance. See [Draft the stock transfer restriction](/guides/agreements/draft-stock-transfer-restriction).
  </Step>

  <Step title="Get the EIN">
    Free and same-day from the IRS at [irs.gov](https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online). The responsible party is the clinician-owner. Do not pay a third-party service for this.

    **Save the CP 575 confirmation letter.** You will need it for banking and every payer enrollment, and the legal name on it must match what you use everywhere else.
  </Step>

  <Step title="Register with state tax and labor agencies">
    State income tax withholding and unemployment insurance registration, since the PC will employ clinicians.
  </Step>

  <Step title="Raise the S-election question with your CPA">
    A PC taxed as a C-corporation that is a personal service corporation faces a flat 21% federal rate under IRC § 11(b), with no graduated brackets. Many elect S status. The Form 2553 deadline is tied to the tax year — missing it costs a year.
  </Step>
</Steps>

## Verify it worked

* [ ] State-stamped articles of incorporation in hand
* [ ] Entity shows as active and in good standing on the secretary of state's website
* [ ] Bylaws and organizational consents in the minute book
* [ ] Stock certificate issued, with restrictive legend
* [ ] CP 575 EIN letter received, with the legal name recorded exactly as printed
* [ ] State tax and employer registrations confirmed

## Common failure modes

| Failure                                                               | Consequence                                                        |
| --------------------------------------------------------------------- | ------------------------------------------------------------------ |
| Generic "any lawful purpose" clause instead of a professional purpose | Filing rejected, or an entity that doesn't qualify as professional |
| MSO listed as incorporator or shareholder                             | Direct CPOM violation                                              |
| Skipping board pre-approval                                           | Filing rejected; weeks lost                                        |
| Non-licensee officers or directors where prohibited                   | Governance defect                                                  |
| No restrictive legend on the certificate                              | Transfer restriction may be unenforceable against a transferee     |
| Legal name in NPPES or on the W-9 differs from the CP 575             | Payer enrollment rejections for months                             |
| Using an online formation service in a pre-approval state             | Wrong form filed                                                   |
| No bylaws or organizational consents                                  | Weakens the corporate-separateness defense                         |

**The legal name must match everywhere.** The CP 575, the W-9, NPPES, the payer applications, and the bank account must all carry the identical legal name. Name mismatch is the leading cause of first-claim rejections, and resolving it means re-filing enrollment with every payer.


## Related topics

- [Step 3: Form the PC](/start/zero-to-paid/form-the-pc.md)
- [Form a PLLC](/guides/formation/form-a-pllc.md)
- [Form a professional association (PA)](/guides/formation/form-a-pa.md)
- [Maintain corporate formalities](/guides/formation/maintain-corporate-formalities.md)
- [PC vs PLLC vs PA (vs corp vs LLC)](/concepts/entities/pc-vs-pllc-vs-pa.md)
- [Who can own a professional entity](/concepts/entities/who-can-own-what.md)
- [California — CPOM & MSO reference](/reference/legal/states/california.md)
- [The complete agreement stack (checklist)](/reference/legal/agreement-stack-checklist.md)