What is a professional corporation (PC)?

A professional corporation (PC) is specifically designed for licensed professionals such as doctors, lawyers, accountants, and architects. This type of corporation provides certain legal protections, allowing professionals to incorporate their practice while still adhering to the ethical and regulatory standards pertinent to their field.

The key distinction of a PC is that it offers limited liability protection for its owners against claims arising from the business's professional services, although it does not protect against malpractice claims within the profession itself. This means that if a professional is sued, personal assets may still be at risk if they are found personally liable for their professional actions. However, the structure helps to shield them from the debts and liabilities of the corporation.

In contrast, other options describe entities that do not correctly capture the specific legal and practical implications of a professional corporation. General business entities can be established for any type of business activity and do not have the same professional restrictions. Nonprofit organizations serve entirely different purposes, focusing on charitable activities rather than for-profit endeavors. Subsidiaries of larger corporations refer to companies that are controlled by another corporation, which does not align with the professional focus of a PC. Thus, the answer accurately reflects the unique characteristics and purposes that define a professional corporation.