Florida LLC vs Florida Professional Association

Florida LLC vs Florida Professional Association

If you are looking to form a company centered on a professional service, you may want to consider a professional corporation or professional association (PA). A professional association is an entity formed with the single purpose of providing a specific professional service. These professional services are commonly doctors, lawyers, accountants, and more. The important qualifying aspect of a professional association is that the members are licensed in the profession that their business practices. Additionally, a PA is often formed in a similar manner to that of a corporation, as it has a board of directors, shareholders, and enjoys perpetual succession.

An LLC, on the other hand, is a more general entity with greater flexibility in terms of state restrictions and business practices. When forming an LLC, there is no requirement for a board of directors or shareholders and the entity can be created by one or multiple individuals. Additionally, LLCs enjoy pass-through taxation, which means they avoid the double taxation that corporations experience. The entity type you choose will likely hinge on the service your business will provide and the state requirements that govern it.

Single Purpose for Professional Association

A requirement for professional associations in the state of Florida is that your PA is formed with the single purpose of providing a specific professional service. Any shareholder of the association must be properly licensed to provide the services offered by the business. There are a number of different services that qualify as a professional service, such as CPA, insurance agent, dentist, attorney, veterinarian, and more.

While all shareholders need to be licensed to provide the association’s given professional service, they are not required to perform those services on behalf of the business. Other employees of the business can provide the services so long as they are also appropriately licensed in the field. Additionally, the professional association can employ non-licensed individuals to perform services apart from the specified professional service.

Florida Professional Association Name Requirements

When choosing a name for your professional association, keep in mind that it must contain a signifier such as “professional association”, “PA”, or “chartered”. Your name cannot use any other misleading signifiers, such as “incorporated”, “inc.”, or “company”. However, if your business has registered with the state of Florida under a fictitious name (a name different than the shareholder’s legal name or registered corporate name) then you have the option of omitting the signifier from your name. There are additional exemptions for fictitious names that extend to attorneys and other licensed professionals by the Department of Health and the Department of Business and Professional Regulation. If you require additional information on this, consult the Florida Division of Corporation’s website.

Filing Articles of Incorporation in Florida

In order to form your professional association or professional corporation, you are required to file articles of incorporation. These articles will be filed with the Florida Division of Corporations and can be completed online or by mail. Your articles of incorporation will include the following information:

  • Name of your professional association.
  • Stated single purpose of your professional association.
  • Address for your principal place of business (and a mailing address if this is different).
  • Name and address of your registered agent.
  • Name and address of your incorporator.
  • Optional effective date (if one is not specified, it will be the date your articles are filed).

Additional Considerations for Your Professional Association

Be sure to check for any additional permit or license requirements unique to your location. The Florida Small Business Development Center will have information on any of their requirements for your county or city. Other state agencies that you might check with are the Florida Department of Business and Professional Regulation and the Florida Department of Agriculture. Both departments have their own licensing requirements that may pertain to your business.

Additionally, you will want to be certain that your business complies with any tax or regulatory requirements that apply to professional associations in the state of Florida. A good place to check for this information is on the Florida Department of Revenue website. Also, if you require any information on obtaining an employer identification number (EIN), income tax requirements, or tax forms, consult the IRS website.