What Does PC Stand for After a Business Name?
When preceded by a business name, the letters "PC" or "P.C." stand for "Professional Corporation." All entities that have registered as a professional corporation must identify themselves with these letters when conducting business. Specific reasons exist regarding why an entity or group of professionals may want to organize as a professional corporation.
Other People Are Reading
-
Significance
-
The main benefit of organizing as a corporation is to protect yourself from liability in the case that you or your company is sued. For instance, if you are a truck driver and you are in a car accident, the parties damaged will have to sue the company by which you are employed, rather than seeking to collect from your own personal assets. Furthermore, if an entity goes bankrupt, creditors will only be able to collect from the liquidated assets of the company.
Identification
-
A PC is comparable to a LLC, or limited liability corporation. An LLC is taxed similarly to a sole proprietorship or partnership, but members of the LLC are protected from the liabilities and debts of the entity. A PC is a similar structure that is exclusive to certain licensed professions, such as chiropractors, attorneys, accountants and architects. However, a PC does not protect individuals from personal liability due to malpractice or negligence.
-
Benefits
-
A PC is advantageous for a firm because it protects the overall company from the liabilities of the individual members. For example, if a doctor is sued for malpractice, he alone is responsible for any damages resulting from the suit, rather than the practice as a whole.
Geography
-
Depending on the jurisdiction, other corporate structures are similar or more pertinent to certain professions. Other entity types that are similar to a PC are Limited Liability Partnerships (LLP) and Professional Limited Liability Corporations (PLLC). Like a PC, these structuring protect partners and co-owners from the liabilities of individual members.
Considerations
-
Plaintiffs seeking to sue an individual for malpractice or negligence, rather than the overall PC, LLP or PLLC, must prove that the individual was working outside of the entity's corporate mission and purpose. For example, if an attorney acts in his own financial interests rather than that of the client, this can be construed as breach of fiduciary duty, which is beyond the scope of the corporate mission and purpose.
Plaintiffs can also claim that a corporation is merely a "sham operation" and that the defendant was actually acting as an individual. As such, it is important to maintain the the procedural expectations of a corporation (i.e. hold board meetings, establish a corporate mission and accounting policies).
-
