Forming a P.A. in Florida for Licensed Professionals

Forming a P.A. in Florida for Licensed Professionals

If you're a doctor, attorney, CPA, architect, or another licensed professional in Florida, you can't just pick any business structure off the shelf and call it a day. Florida law has a specific entity built for you: the Professional Association, or P.A.

Most people have heard of LLCs and corporations. Fewer understand what a P.A. is, why it exists, and how it's different from a regular business. If you're a licensed professional setting up or restructuring your practice in South Florida, this post is for you.

What Is a Professional Association?

A Professional Association is a specific type of corporation under Florida law, governed primarily by Chapter 621 of the Florida Statutes. It's designed exclusively for licensed professionals who are legally prohibited from forming a general corporation to practice their profession.

The reason? Florida doesn't want non-licensed people owning a medical practice or law firm. That would create obvious problems with accountability, ethics, and licensing rules. So the P.A. was created as a workaround that gives professionals the benefits of corporate structure while keeping ownership restricted to licensed individuals in the same field.

A P.A. is functionally similar to a professional corporation (P.C.) you might see in other states. In Florida, the names are used somewhat interchangeably, but the P.A. designation is the one you'll see on most professional businesses here.

Who Qualifies to Form a P.A.?

Not everyone can form a P.A. Florida statute limits this structure to licensed professionals whose licensing boards permit or require it. Common examples include:

• Physicians and surgeons
• Attorneys
• Dentists
• Chiropractors
• Optometrists
• Certified Public Accountants
• Architects and engineers
• Veterinarians
• Psychologists

The key rule is that all shareholders, officers, and directors of a P.A. must hold the same professional license as the services the business provides. If you're a physician's P.A., your shareholders have to be licensed physicians. You can't bring in a silent investor partner who isn't licensed in your field.

How Is a P.A. Different from an LLC or Regular Corporation?

This is where a lot of professionals get confused. Let me break it down simply.

A regular Florida corporation (Chapter 607) has no restriction on who can own it. A regular LLC (Chapter 605) is also open to any owner. A P.A. under Chapter 621 restricts ownership to licensed professionals in the same field, full stop.

On the liability side, here's something important that surprises people: forming a P.A. does NOT protect you from personal liability for your own professional malpractice. If you make a professional error and someone gets hurt, you can still be personally sued. The P.A. structure protects you from the business debts and liabilities of your partners or colleagues, not your own acts. That's a meaningful distinction.

For tax purposes, a P.A. is treated as a C-corporation by default under federal law. However, many professionals elect S-corporation status with the IRS to avoid double taxation and reduce self-employment tax on a portion of their income. This is one of the most valuable financial moves a solo or small-group practice can make, and it's worth reviewing with both a CPA and an attorney. If you're comparing structures, our LLC vs S-Corp guide walks through the tax considerations in plain terms.

How to Form a P.A. in Florida

The formation process is similar to forming a regular corporation, but with a few extra steps because of the licensing requirements.

Step 1: Choose a name. Your business name must include "P.A." or "Professional Association" and must comply with your licensing board's naming rules. Attorneys can't use trade names, for example. Physicians have different rules through the Florida Department of Health.

Step 2: File Articles of Incorporation. You file with the Florida Division of Corporations (Sunbiz). The articles must state that the corporation is formed under Chapter 621 and identify the licensed profession being practiced.

Step 3: Appoint officers and directors. All must be licensed in the same profession. You'll need a registered agent in Florida as well.

Step 4: Apply for your professional license through your board. Many licensing boards in Florida require the practice entity itself to be licensed, not just the individual. This is separate from your personal license. The Florida Department of Health, the Florida Bar, and the Board of Accountancy all have their own requirements here.

Step 5: Create bylaws and a shareholder agreement. This is often skipped and almost always regretted. Bylaws govern how your P.A. runs. A shareholder agreement covers what happens if a partner wants out, becomes disabled, loses their license, or dies. These documents prevent expensive disputes down the road. For professional practices with multiple owners, this step is as important as the filing itself.

Step 6: Elect S-corporation status if appropriate. File IRS Form 2553 within 75 days of formation to make the S-corp election effective for the current tax year.

If you want to understand more about how business entity structure affects your practice before you file, the business entity quiz is a good starting point.

Common Mistakes to Avoid

Skipping the operating agreement or bylaws. Even solo practitioners should have these. They establish governance rules and make you look professional if you ever need financing or bring in a partner.

Not registering with your licensing board. Filing with Sunbiz is step one, not the finish line. Many professionals form the entity and then forget that their board requires a separate application.

Mixing personal and business finances. This is the fastest way to lose your liability protections. Keep separate bank accounts, pay yourself a salary, and run legitimate business expenses through the P.A.

Ignoring buy-sell provisions. If your practice has more than one professional, what happens when someone leaves, retires, or loses their license? Without a clear agreement, you're heading toward business disputes that cost far more to resolve than they would have cost to prevent.

The Bottom Line

Forming a P.A. in Florida is not complicated, but it has more moving parts than a standard business filing. Between the Sunbiz filing, the board licensing requirements, the S-corp election, and the internal governance documents, there are multiple places where professionals cut corners and pay for it later.

If you're a licensed professional in South Florida ready to start or restructure your practice, The Kogan Firm can help you do it right from the start. We handle business formation for professionals across Miami-Dade, Broward, and Palm Beach counties. Call us or reach out through our contact page for a free consultation.