A PC in the context of a CPA typically refers to a Professional Corporation.
Understanding Professional Corporations (PCs)
A professional corporation is a specific type of corporate structure available to licensed professionals, like Certified Public Accountants (CPAs), who wish to incorporate their practice.
Key Characteristics of a PC:
- Licensed Professionals Only: Only licensed professionals can form a PC.
- Same Profession: Shareholders, directors, and officers must belong to the same profession (e.g., all CPAs). According to the reference, "the shareholders, directors, and officers must belong to the same profession."
- Incorporated Practice: It allows professionals to incorporate their practice, offering potential benefits like limited liability (though professional liability remains with the individual professional).
Why form a PC?
While specific benefits depend on jurisdiction, generally, professionals form PCs for reasons such as:
- Tax advantages.
- Potentially limited personal liability (though this often doesn't shield professionals from liability related to their own negligence or malpractice).
- Facilitating business operations and succession planning.
