Is a PC the same as an LLC?
The difference between LLC and PC is straightforward. A limited liability company (LLC) combines the tax benefits of a partnership and the limited liability protection of a corporation. A professional corporation (PC) is organized according to the laws of the state where the professional is licensed to practice.
What is PC in a law firm?
A professional corporation is organized under the laws of the state in which it is formed. Unlike a regular corporation, a PC for lawyers requires that each director, shareholder and officer be licensed to practice law.
What type of entity is a PC?
Professional Corporations (PC) are corporations for certain occupations – typically, service professions like lawyers, doctors, architects and the like. A professional corporation isn’t allowed to branch out beyond the services for which it was specifically incorporated with the state.
What is difference between PC and pllc?
The difference between a PC and a PLLC is ultimately the same as the difference between a regular corporation and a regular LLC. One major difference is how these entities are taxed. With a PLLC, you can choose to be taxed like a C corp or an S corp, but the far more common option is taxation as a pass-through entity.
Can a PC be as corp?
The PC pays corporation taxes, and this means a sole practitioner gets hit with double taxation. Both can file as an S corporation—which is a special type of corporation that is created through an IRS tax election—to avoid double taxation. In an S corp., profits and losses pass through to your personal tax return.
How does a PC get taxed?
A PC must file a professional corporation tax return and pay taxes on its earnings. PCs are subject to a 35% flat federal tax rate on their corporate earnings, which can be a disadvantage since C corporations are taxed at 15 to 34% for their earnings below $100,000.
Is a PC considered a corporation for 1099 purposes?
The same holds true for 1099 forms. Our attorney and our accountant are both professional corporations (PCs). The law is a little fuzzier when it comes to accountants and other professionals, but Hunt advises that 1099s be sent to all providers of professional services, even if they are LLCs or corporations.
Can a PC be C corp?
PCs are generally taxed like a c corporation, with the PC paying taxes at the corporate rate, which can lead to double taxation. PLLCs, on the other hand, are taxed like LLCs, which generally have pass-through taxation of the members.