Illinois Professional Corporations Explained | PCs And PLLCS in Illinois

Illinois Professional Corporations Explained | PCs And PLLCS in Illinois

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Updated on:
July 27, 2018

I was recently asked the following question relating to professional corporations in response to my recent video blog: Which Corporate Form is Right for Your Business?

Q:  I have a full-time job, but I am now taking on private clients (home-based speech therapy services). I have liability insurance already. Do I HAVE to incorporate or can I just consider it a side job and claim it appropriately on my taxes? 

​A:   Incorporation would probably only be beneficial for you for tax purposes at this point.  Speech pathologists and certain other professionals are required to form “professional corporations” or “PCs.”  PCs, unlike other corporate forms, will not protect you from malpractice liability.  As your business grows, you may want to consider forming a PC to protect you from liability for your business’ contracts.  However, at this time, since you probably do not have a lease or other such contracts to worry about, a PC would probably not be helpful for liability purposes.  

Although incorporation will not protect you from the type of liability you are likely to incur with a home-based speech pathology business, forming a PC and filing an S-Corp election with the IRS may be beneficial for tax purposes.  Sole proprietors must pay self-employment tax on their profits (including salary), while S-Corp shareholders only pay self-employment tax on their salaries, not their profits.  You can learn more about this by reading my article: LLCs vs. S-Corps: Selecting a Corporate Form for Your Small Business.

Professional Corporations

Whether you are taking in enough profit with your business to make an S-Corp beneficial is something you should discuss with your accountant. 

We offer free “tune-up” consultations to small business owners to discuss both legal and non-legal issues that you may be facing (e.g. website, insurance, accounting issues, regulations, contracts, etc.).  If you think this might be helpful, I would be happy to schedule a time to meet with you.

Presented By O'Flaherty Law

O'Flaherty Law is happy to meet with you by phone or at our offices in Downers Grove, Elmhurst, Naperville, St. Charles, Lake in the Hills and Tinley Park, Illinois.

What to Expect From a Consultation

The purpose of a free consultation is to determine whether our firm is a good fit for your legal needs. Although we often discuss expected results and costs, our attorneys do not give legal advice unless and until you choose to retain us. Although most consultations are complimentary, some may carry a charge depending on the type of matter and meeting location.

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Incorporation, LLCs, and Corporate Law

Illinois Professional Corporations Explained | PCs And PLLCS in Illinois
Disclaimer: Our articles and comment responses do not constitute legal advice and are not intended to create an attorney-client relationship.

Please contact us to schedule a free consultation for legal advice specific to your situation.

What is a Professional Corporation?Who has to file as a professional corporation in Illinois?What is a PLLC?What is a PC?Who has to file as a PC in Illinois?What is the difference between a PC and an S-Corp in Illinois?

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