How to Form a Professional Corporation in Oklahoma (2024 Guide)

Steve Bennett
Business Formation Expert  |   Fact Checked by Editorial Team
Last updated: 
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Forming a Professional Corporation in Oklahoma

If you would like to start and learn how to form a corporation in Oklahoma, there are a few things that you should do now. However, in a professional corporation, professionals must create a special organizational structure to establish a professional or service corporation. Among the appropriate professions to organize a professional corporation in Oklahoma are accountants, physicians, engineers, architects, and attorneys.

Forming a professional corporation in Oklahoma or any business organization needs a certain number of steps. In this article, Webinarcare Editorial Team is going to share those steps. Keep in mind that these are general procedures. Depending on local law, it may be modified. For instance, your professional corporation may be subject to city or county-based rules.

What is a Professional Corporation in Oklahoma?

A professional service corporation (PSC), often known as a professional corporation (abbreviated as PC), is a particular type of organization that is permitted by state law to allow owners of specifically licensed professions to practice in the Oklahoma. A professional corporation’s owner is answerable for their own negligence or wrongdoing but is not held personally liable for the actions of other owners. The abbreviation PC or P.C. is frequently used to denote professional corporations.

This structure allows professionals to enjoy some of the benefits and protections of a traditional corporation while maintaining their professional status and abiding by the regulations of their respective licensing boards.

LegalZoom is the recommended corporation formation if you are thinking of forming a professional corporation from scratch. However, you can always start an LLC in Oklahoma, if you changed your mind.

WEBINARCARE EDITORIAL TEAM

How to Form a Professional Corporation in Oklahoma

To form a Professional Corporation in Oklahoma for the professional service you provide, you must follow a few steps that include verifying if you are qualified for a PC, naming your business, hiring a Registered Agent, filing the Certificate of Incorporation, outlining an operating agreement, requesting for an EIN, opening a bank account, getting a business license, and filing for an Annual report and taxes.

Step 1: Verify If You Are Qualified for a Professional Corporation

In forming a professional corporation in Oklahoma, you should know if you are qualified. There are specific professions that are allowed to form a professional service corporation, including-

To provide your service, you must be qualified and have a license. In most cases, you can now form a professional corporation after finishing your studies, passing the exam, and receiving your license. If you work in an industry that does not provide a license or professional certification, you should consider starting an LLC or corporation.

Step 2: Name your Professional Corporation in Oklahoma

After you have decided to form a professional corporation in Oklahoma, you must choose a name for your corporation. Here are some pointers to consider when naming your professional corporation.

  • The business name should have the word PC, frequently followed by the name of the principal owner in place of Inc or LLC. (Example. John Doe, MD, PC)
  • Limit of restricted words that need a license.
  • A unique name is needed with no match
  • No confusion with a government entity name.

In Oklahoma, if you do not wish to file your professional corporation right away but want to hold the name that you have decided on, then you can reserve your corporation name for 60 days. You must file a name reservation application in the Oklahoma Secretary of State to keep the name.

If not already present, a professional corporation, professional association, service corporation, or professional service corporation must be included in the name. You may register your business under a different legal name if your preferred legal name is unavailable. Once you’ve decided on a name, you can apply for Oklahoma DBA (doing business as). This way, you can run a clinic or law firm under your name.

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Step 3: Choose the Oklahoma Registered Agent

The next step in forming a professional corporation is hiring a Registered Agent, who accepts legal paperwork for your business. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in Oklahoma. Forming a professional corporation for your service will be easier if you have Registered Agent in Oklahoma.

Alternatively, you can serve as your own Registered Agent if you have the time. Usually, in Oklahoma, a Registered Agent costs is ranging from $50 – $150. To make it easier, you can hire Oklahoma Registered Agent Services for your professional corporation.

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Step 4: File the Certificate of Incorporation in Oklahoma

After you hire a Registered Agent to form a professional corporation, the next step is to file the Oklahoma Certificate of Incorporation. In writing the Certificate of Incorporation, the business name, owner’s contact information, corporation address, and Registered Agent contact information, should be written. Include the names of all co-owners as well. All owners must demonstrate that they have the necessary licenses to practice the profession in question.

Filing the Certificate of Incorporation in Oklahoma may be done with three methods that are online, by mail and in-person. The Certificate of Incorporation fee may vary from different state. However, in Oklahoma, it costs $25 for online, by mail filing or in person filing.. Create an account/Log in to the SOS site, get the online form, fill it, and submit online. For offline filing, Send the form by mail or drop it off in person at Oklahoma Secretary of State, 421 N.W. 13th Suite 210, Oklahoma City, OK 73103.

Step 5: Write an Operating Agreement in Oklahoma

An operating agreement in Oklahoma is a document that contains all of your company’s organizational details. It is optional to draft an operating agreement in most states. Yet, having one as an internal document is strongly advised. The operating agreement includes information like-

  • About Business
  • Members and management
  • Capital contribution
  • Profit Distribution
  • Change of membership
  • Dissolution

Step 6: Designate the PC Board of Directors in Oklahoma

The next step is to form the first board of directors for your PC in Oklahoma. All of the initial directors must provide the owner with their contact information. The owner must keep records and submit them by the Oklahoma Secretary of State. As a shareholder and owner, you must ensure that a provision for appointing a new director is included in the By-laws. In Oklahoma, you must have One directors in forming your Professional Corporation.

Step 7: Write the Corporate Bylaws

Now that you are done forming the team of the board of directors, the next step is to draft corporate bylaws. Corporate bylaws are the basic rules that control a corporation. It includes the organization’s structure, processes, laws, and rules. As a result, all personnel, managers, and corporation members must obey the firm’s rules.

Creating comprehensive corporate bylaws requires specific knowledge about the company, its structure, and operations. However, I can provide you with a general outline of what corporate bylaws usually include. It is crucial to consult with Oklahoma Business Attorney or a legal expert to ensure that your bylaws comply with the laws and regulations governing your jurisdiction and industry.

  • Name and Purpose of the Corporation
  • Registered Office and Agent
  • Shareholders
  • Board of Directors
  • Officers
  • Committees
  • Indemnification and Insurance
  • Conflict of Interest
  • Records and Reports
  • Amendments
  • Miscellaneous

Step 8: Hold the First Board of Directors’ Meeting

Gather the board of directors for the first meeting after drafting the corporate bylaws. This meeting will conclude with the appointment of directors to manage the company’s daily operations, approval of the bylaws, selection of the corporation’s financial reporting year, and approval of the stock issue. Minutes should be taken at all board meetings and kept with the company’s records.

Step 9: Request an EIN in Oklahoma.

After the operating agreement’s documentation, you should get or request an Employer Identification Number (EIN) in Oklahoma. The tax ID for your professional corporation will be an EIN. The Internal Revenue Service can provide an EIN (IRS). It has nine digits and is comparable to a social security number. Nevertheless, EIN is different from SSN. Only business-related tasks, primarily filing general taxes, are performed using it. The form needs to be filled out and submitted online to the IRS.

The application of an EIN in Oklahoma can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

After you have your EIN number, you can benefit in several ways. It will give your professional corporation the absolute advantage necessary to operate at full capacity without encountering legal or judicial issues.

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Step 10: Open a Bank Account and Prepare for Taxes.

You should open a business bank account as soon as you have applied for and received your Employer Identity Number because you will use this account for yourself, your clients, and your staff. Check out the Best Banks in Oklahoma for you to decide on which bank you are going to open an account.

Due to your organization’s increased legality and liquidity, having a US business bank account may make conducting business in Oklahoma easier. Most banks require an EIN for businesses other than sole proprietorships to open a business bank account. Also, keeping your accounts separate will prevent you from merging your personal and business finances. Also, filing taxes is simpler when you have an EIN. You can expect to pay employee and corporate taxes when you form a professional corporation.

Step 11: Get a Business License in Oklahoma

Before your professional corporation operates in Oklahoma, you must have Oklahoma Business License first. A business license is a formal document issued by a state government agency that allows you to conduct business in the geographic area governed by that agency. The cost of business licenses and permits in Oklahoma ranges from $50 – $300. You must check with the local authorities to see if any special licenses or permits are required.

Step 12: File Your Taxes in Oklahoma

Finally, you’ve arrived at the final process. Remember to file your taxes when you have obtained a business license and are ready to begin operations. To avoid a large tax bill, you should begin paying taxes quarterly as soon as possible. Each state has different tax requirements. Start examining the Oklahoma tax classification for the taxes that an LLC in Oklahoma must pay.

Main Characteristics of a Professional Corporation

In forming a Professional Corporation, the main characteristics must be distinguished before forming it. These are the general characteristics of forming a Professional Corporation in Oklahoma.

  • Limited Liability Protection: A professional corporation provides its owners, shareholders, or members limited liability protection like a regular corporation. This means the shareholders’ personal assets are generally protected from business debts, obligations, and lawsuits, except in malpractice or professional negligence cases.
  • Oklahoma Licensing Requirements: All shareholders must typically be licensed professionals in the same field in a professional corporation. The corporation must also comply with specific state regulations and licensing requirements that govern the profession.
  • Governance and Management: A professional corporation is governed by a board of directors, who the shareholders elect. The board appoints officers to manage the day-to-day operations of the corporation. All directors and officers must be licensed professionals in the same field as the corporation.
  • Taxation: Professional corporations are taxed as C corporations, where the corporation pays taxes on its income, and shareholders pay taxes on dividends received from the corporation. However, some professional corporations may be eligible for S corporation status, allowing pass-through taxation. Income, losses, deductions, and credits flow to the shareholders, who report this information on their income tax returns.
  • Restrictions on Ownership and Transfer of Shares: Professional corporations often restrict the ownership and transfer of shares to ensure that only licensed professionals in the same field can become shareholders. This helps maintain the professional nature of the corporation and adheres to state licensing requirements.
  • Malpractice Liability: While a professional corporation provides limited liability protection for general business debts and obligations, it does not shield shareholders from liability for their own malpractice or professional negligence. Shareholders can still be personally liable for their actions in providing professional services.

In summary, a professional corporation is a specialized corporate structure designed for licensed professionals, offering limited liability protection and a formal governance structure while adhering to state licensing requirements and regulations.

Maintain Professional and Business License in Oklahoma

You must maintain or renew your professional license regularly now that you have established your professional corporation. Even if your company is well-established, it is only meaningful if you have a valid operating license. And it makes no difference if your professional license is still valid for a year or two, but your business license has already expired.

Make time at least once a year to check the status of your licenses. You won’t miss anything important this way. You can address any issues that arise.

Filing Annual Report in Oklahoma

In Oklahoma, you must submit a report. The owners’ and Registered Agent’s names and contact details are listed in the Annual Report. Also, it should include all of your yearly financial activity. You must submit the report every 1 year in the Oklahoma Secretary of State.

FAQs

What is a professional corporation in Oklahoma?
A professional corporation in Oklahoma is a specialized type of corporation that limits liability for its owners who work in a specific profession.
What professions can form a professional corporation in Oklahoma?
Professions such as doctors, dentists, and lawyers can form professional corporations in Oklahoma.
How do I form a professional corporation in Oklahoma?
You can form a professional corporation in Oklahoma by filing the necessary forms with the Oklahoma Secretary of State and meeting all statutory requirements.
Is there a minimum number of shareholders required to form a professional corporation in Oklahoma?
No, there is not a minimum number of shareholders required to form a professional corporation in Oklahoma.
Can a professional corporation in Oklahoma provide medical services?
Yes, a professional corporation in Oklahoma can provide medical services.
What is the process for changing the business structure of a professional corporation in Oklahoma?
The process for changing the business structure of a professional corporation in Oklahoma requires filing appropriate paperwork and meeting statutory requirements.
How is a professional corporation in Oklahoma taxed?
A professional corporation in Oklahoma is taxed as a regular corporation for federal tax purposes and at a special rate for state tax purposes.
Can I form a professional corporation in Oklahoma if I am licensed in another state?
Yes, you can form a professional corporation in Oklahoma if you are licensed in another state.
Do I need to have liability insurance before I can form a professional corporation in Oklahoma?
No, you do not need to have liability insurance before you can form a professional corporation in Oklahoma, but it is recommended.
What is required on the Articles of Incorporation for a professional corporation in Oklahoma?
The Articles of Incorporation for a professional corporation in Oklahoma must include information specific to the profession the corporation operates in.
Do I need to appoint a registered agent for my professional corporation in Oklahoma?
Yes, you are required to appoint a registered agent for your professional corporation in Oklahoma.
What is the filing fee for a professional corporation in Oklahoma?
The filing fee for a professional corporation in Oklahoma is $100.
How often do I need to file reports for my professional corporation in Oklahoma?
You are required to file an annual report for your professional corporation in Oklahoma.
Can a professional corporation be owned by an LLC in Oklahoma?
Yes, an LLC can own a professional corporation in Oklahoma.
What is the difference between a professional corporation and a regular corporation in Oklahoma?
A professional corporation in Oklahoma is specifically for professionals who operate in a certain field, while a regular corporation has more flexibility in its operations.
Can a professional corporation in Oklahoma hire non-professionals?
Yes, a professional corporation in Oklahoma can hire non-professionals for administrative and support roles.
Who can act as a incorporator for a professional corporation in Oklahoma?
The incorporator for a professional corporation in Oklahoma can be any adult, whether or not they are affiliated with the profession of the corporation.
Do I need to provide a Social Security number or Tax ID for my professional corporation in Oklahoma?
Yes, you will need to provide a Social Security number or Tax ID for your professional corporation in Oklahoma.
What if my profession requires specific licenses in Oklahoma?
You will need to obtain all necessary licenses for your profession in Oklahoma before forming a professional corporation.
Can I include my professional title in the name of my Oklahoma professional corporation?
Yes, you can include your professional title in the name of your Oklahoma professional corporation.
Can I have more than one profession in a professional corporation in Oklahoma?
Yes, you can have more than one profession in a professional corporation in Oklahoma if the related professions are allowed to be included according to state regulations.
What are the ongoing requirements for running a professional corporation in Oklahoma?
The ongoing requirements for running a professional corporation in Oklahoma include filing reports and meeting all statutory requirements.
Can a foreign corporation form a professional corporation in Oklahoma?
Yes, a foreign corporation can form a professional corporation in Oklahoma but must meet all statutory requirements.
What is the purpose of the bylaws for a professional corporation in Oklahoma?
The bylaws for a professional corporation in Oklahoma outline the rules and procedures for conducting business.
Can I designate a separate office for my professional corporation in Oklahoma?
Yes, you can designate a separate office for your professional corporation in Oklahoma.
What is the maximum number of shareholders that can be in a professional corporation in Oklahoma?
There is no maximum number of shareholders for a professional corporation in Oklahoma.
Can I transfer ownership of my professional corporation in Oklahoma?
Yes, you can transfer ownership of your professional corporation in Oklahoma according to state regulations.
Who needs to sign the Articles of Incorporation for a professional corporation in Oklahoma?
The Articles of Incorporation for a professional corporation in Oklahoma will need to be signed by the incorporator or initial shareholders.
What are the benefits of forming a professional corporation in Oklahoma?
The benefits of forming a professional corporation in Oklahoma include limited liability protection, flexible management structure, tax savings opportunities, and increased professionalism.
What are the requirements for forming a professional corporation in Oklahoma?
The requirements for forming a professional corporation in Oklahoma include filing articles of incorporation, obtaining a certificate of authority, and complying with state regulations for professional corporations.
Can I form a professional corporation in Oklahoma for any profession?
No, the formation of professional corporations in Oklahoma is limited to specific professions that require a license or certification.
Is there a limit to the number of professionals that can form a professional corporation in Oklahoma?
No, there is no limit to the number of professionals that can form a professional corporation in Oklahoma.
How is a professional corporation taxed in Oklahoma?
A professional corporation in Oklahoma is taxed like a C corporation, meaning it’s subject to corporate income tax and its earnings are taxed at both the corporate and individual levels.
How long does it take to form a professional corporation in Oklahoma?
It varies depending on the complexity of formation but typically takes between 5-10 days to file articles of incorporation and obtain a certificate of authority.
Can non-residents form a professional corporation in Oklahoma?
Yes, non-residents can form a professional corporation in Oklahoma, as long as at least one of the professional shareholders is licensed in Oklahoma.
Can professionals from multiple states form a professional corporation in Oklahoma?
Yes, professionals from multiple states can form a professional corporation in Oklahoma, as long as they meet all state and federal regulatory requirements.
Are there any disadvantages to forming a professional corporation in Oklahoma?
Disadvantages of forming a professional corporation in Oklahoma include higher formation fees, additional regulatory compliance requirements, and greater administrative maintenance.
Who can own shares in a professional corporation in Oklahoma?
Only licensed professionals are allowed to own shares in a professional corporation in Oklahoma.
Can the shareholders of a professional corporation in Oklahoma be sued individually?
Unless personal negligence or misconduct is established, shareholders of a professional corporation in Oklahoma are generally not personally liable for business debts or claims against the corporation.
Is a board of directors required for a professional corporation in Oklahoma?
No, a board of directors is not required for a professional corporation in Oklahoma. However, the corporation should be managed by professionals.
Can a professional corporation in Oklahoma issue stock?
Yes, a professional corporation in Oklahoma can issue stock, with ownership limited to licensed professionals.
Can a professional corporation in Oklahoma engage in multiple professions?
No, a professional corporation in Oklahoma can only engage in one specific type of licensed profession.
Can a professional corporation in Oklahoma provide services outside the state?
Yes, a professional corporation in Oklahoma can provide services outside of Oklahoma, provided it meets the necessary regulatory requirements.
Does forming a professional corporation in Oklahoma limit my liability as a professional in my profession?
Yes, forming a professional corporation in Oklahoma provides limited liability protection for individual professional shareholders.
Are there any specific regulations for professional corporations in Oklahoma?
Yes, professional corporations in Oklahoma must comply with specific corporate governance and management regulations imposed by state and federal laws.
Are there any ongoing maintenance requirements for professional corporations in Oklahoma?
Yes, maintaining a professional corporation in Oklahoma means complying with annual reporting requirements and keeping up-to-date records of minutes and other mandatory documents.
Can professionals from out-of-state practice in Oklahoma as part of a professional corporation?
Yes, out-of-state professionals can practice in Oklahoma as part of a professional corporation as long as they meet the state’s licensing requirements.
Can a professional corporation in Oklahoma own property?
Yes, a professional corporation in Oklahoma can own property and assets necessary for its business operations.
Can a professional corporation in Oklahoma sue or be sued?
Yes, a professional corporation in Oklahoma can sue and be sued in its corporate capacity.
What are the securities laws requirements for issuing shares in a professional corporation in Oklahoma?
Securities law requirements in Oklahoma apply to both the issuance of stock and the sale of stock in a professional corporation.
Can professional corporations in Oklahoma conduct business under a business name?
Yes, professional corporations in Oklahoma can conduct business under a business name, as long as the corporate name includes the required professional designations.
Is a professional corporation in Oklahoma required to have a registered agent?
Yes, a professional corporation in Oklahoma must have a registered agent with a physical street address located in the state.
Can I form a professional corporation in Oklahoma through a formation service?
Yes, a professional corporation in Oklahoma can be formed through a formation service provided they meet the necessary regulatory requirements.
Can I convert my existing business into a professional corporation in Oklahoma?
Yes, an existing business in Oklahoma can be converted into a professional corporation, provided all regulatory requirements are met.

Also Read

How to Save Money While Forming Oklahoma Professional Corporation

The first step in saving money while forming an Oklahoma professional corporation is careful consideration of legal requirements and paperwork. Before initiating the formation process, individuals must understand the legal framework and obligations associated with establishing a professional corporation. By doing the necessary research and familiarizing themselves with the relevant rules and regulations, entrepreneurs can better avoid unnecessary expenses, such as penalties for non-compliance or hiring expensive legal counsel later on.

Additionally, entrepreneurs should consider utilizing Do-It-Yourself (DIY) tools available online, specifically tailored to streamline the process of forming a professional corporation. These digital resources offer step-by-step guidance and templates that simplify the preparation of necessary legal documents, such as articles of incorporation or bylaws. By taking advantage of DIY platforms, aspiring professional corporations can save significant amounts of money that would have otherwise been spent on hiring expensive legal professionals.

Another effective method of saving money is to capitalize on available tax deductions and credits. Understanding the tax benefits and incentives offered to professional corporations in Oklahoma can result in significant savings over time. By consulting with experienced tax professionals and identifying applicable deductions, individuals can minimize their tax burden, ultimately leading to higher cost savings throughout the corporation’s life.

Moreover, businesses forming professional corporations in Oklahoma should consider shared services or collaborative arrangements. By joining forces with other companies or professionals in similar fields, corporations can pool resources, share expenses, and leverage collective bargaining power. Group purchasing arrangements for common operational supplies or services, such as office space, software licenses, or even marketing efforts, can significantly reduce costs for each participant, thereby maximizing overall savings.

The effective utilization of technology is another area of potential cost savings for those forming professional corporations. Embracing digital platforms and cloud-based solutions allows corporations to reduce traditional, infrastructure-related expenses, such as bulky and expensive office equipment. By leveraging technological advancements, corporations can streamline their operations, reduce overhead costs, and automate tasks that would otherwise require additional manpower.

In addition, a wise financial strategy entails monitoring expenses and being resourceful in finding cost-effective solutions for various aspects of professional corporation formation. Entrepreneurs should be diligent in reviewing contracts with vendors and service providers, negotiating fair rates, and opting for cost-effective alternatives when feasible. Furthermore, establishing clear budget priorities and periodically reevaluating spending decisions helps businesses maintain financial stability and identify potential areas for additional savings.

In conclusion, forming an Oklahoma professional corporation does not have to break the bank. By familiarizing oneself with the legal requirements, utilizing online resources, exploring tax benefits, embracing collaboration, leveraging technology, and being financially savvy, entrepreneurs can save money and successfully establish their professional corporations. These money-saving strategies not only aid in the initial stages of formation but also pave the way for long-term sustainability and growth.

Conclusion

In conclusion, forming a professional corporation in Oklahoma is a strategic decision for licensed professionals who seek to combine their expertise and services under a single corporate entity. This business structure offers limited liability protection, a formal governance structure, and compliance with state licensing requirements. However, it also comes with certain restrictions on ownership, transfer of shares, and personal liability for professional malpractice. By carefully considering the advantages and disadvantages of a professional corporation, professionals can determine whether this structure aligns with their business goals, regulatory requirements, and risk management needs, ultimately contributing to a more organized, secure, and compliant professional practice.

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