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Incorporating in Utah: What is a Professional Corporation?

by Norris Law Group on October 22, 2014

So far this week, we have examined the criteria that must be met in order to set up either a business corporation or an S corporation in Utah. Other business structures may be established in Utah as well. In this post, we will take a look at Utah professional corporations, as described in a free online guide titled How to Do Business in Utahfrom the Utah Governor’s Office of Economic Development.

The word “professional” in “professional corporation” refers to Utahns who are licensed professionals in their respective fields. Doctors, lawyers, hairstylists, financial planners, and massage therapists are just some examples of professionals who may all fall under this category.

A professional corporation must be set up with the intention of providing only one general type of service and associated services. For example, five doctors may come together and establish a medical practice as a corporation. The doctors may practice the same area of medicine or in related areas, and may also offer associated services such as lab work or wellness services.

A professional corporation is a bit different from other types of business corporations. No officers, directors, or shareholders may practice a profession other than the one for which the corporation was initially created. If a doctor in a professional corporation is married to an attorney, the attorney may not hold a position as an officer or a shareholder. The attorney, however, could serve in another capacity, such as a position as treasurer.

Professional corporations can also sell or transfer stock, but it may only be sold or transferred to other professionals in the same field.

Does a professional corporation sound like the right structure for your business? A discussion with an attorney experienced in creating Utah professional corporations can help you decide.

Attorney Graham Norris and his associates at the Norris Law Group serve the residents of Utah County, UT and throughout Utah, Wyoming and Idaho. Contact them today at 801-932-1238 or online for a free consultation.

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