Starting your own business is an exciting venture. The first step, however, is choosing how you would like to register your company. If you are pursuing a profession that requires a state license, such as medicine, law, or accounting, then you will want to establish your business as a professional corporation (PC) in Tennessee. In this article, we will guide you step by step on how to form a professional corporation in tennessee.

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What is a Professional Corporation?

Before we dive into the formation of a PC in Tennessee, let's talk about what it actually means for a business to be a professional corporation. In layman's terms, a PC is a business entity that is owned by licensed professionals. A professional corporation can only be created by state law and is subject to certain requirements, restrictions, and regulations that don't apply to other business entities.

Steps to Form a Professional Corporation in Tennessee

**Step 1: Choose a Name for Your PC**

The name should reflect your brand and must meet the requirements of the Tennessee Secretary of State. The name must not be identical or too similar to other business entities registered in Tennessee. Be sure to check if your desired name is available by performing a quick online name search.

**Step 2: Select a Registered Agent**

All businesses in Tennessee are required to name a registered agent; an individual or company who will accept legal papers on behalf of your corporation. The registered agent must maintain a physical address (not a P.O box) in Tennessee.

**Step 3: File Articles of Incorporation with Tennessee Secretary of State**

The next step involves filing Articles of Incorporation with the Tennessee Secretary of State. The articles of incorporation should contain information like the company's name, registered agent, business purpose and whether the corporation will hire officers or directors.

**Step 4: Draft Bylaws of Your PC**

The bylaws are like a constitution of your corporation; it contains rules about how your business will operate. Ensure that your bylaws are in accordance with Tennessee state statutes.

**Step 5: Obtain a License from State Boards**

If you are in a licensed profession like accounting, veterinary science, medicine or architecture to name a few, you must obtain your license before forming a PC. Normally, licensing is a PRN (predetermined relationship numbers) that permit that profession holders should be four to ten members. You need to determine your uniquely assigned PRN and ensure that you fit the PRN sizes assessment criteria.

**Step 6: Prepare Shareholder Agreements**

If your corporation is owned by shareholders, you must prepare a shareholder agreement among the owners. The agreement specifies the terms under which shareholders may, or may not, sell their shares and transfer membership, it also describes the responsibilities and expectations of each shareholder.

**Step 7: Hold First Meeting and Elect Officers/Directors**

After articles of corporation are filed, the next step is your corporation’s first meeting. In that meeting, issues become clearer on corporate structure, right, and responsibilities, and thus choose board members and appoint officers relevant to the operation of your business in accordance with your company's specific goals and interests.

**Step 8: Acquire Tax Identification Number and Register with Tennessee Revenue Department**

There are fairly simple ways to get a Tennessee EIN from a federal government website straight from your desktop. you will need an EIN number from the Internal Revenue System (IRS) Additionally, register with the Tennessee Revenue Department once you have secured a tax ID.

**Step 9: Obtain Necessary Permits, Licenses and Insurances**

Finally, acquire your local and state business permits, licenses from your specific licensing board

Conclusion

Running a business requires diligent effort, energy, and resources and the formal character of the formation of a professional corporation could be crucial. That is the reason we’re suggesting a rundown of nine steps that will ease the process to establish your professional corporation in Tennessee completely. Find a balance operating your job requirements with the legal demands; you’ll soon see the advantages of being a formal hired professional!

Remember, before undertaking any corporate registration, it’s prudent to seek the counsel of an experienced legal team, so they can adequately guide you through the Tennessee specific structures, regulations, and formal demands for a PC. A firm understanding of PC structures, utility and nuances characteristics should be prior to create and administrate your chosen business entity skillfully.

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