How to Form a Professional Corporation in Kansas


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Form a Professional Corporation in Kansas

Are you considering starting a professional corporation in Kansas? Congratulations! Establishing a professional corporation is an excellent choice for entrepreneurs and professionals alike who seek to benefit from a business structure that provides limited liability protection, tax advantages, and enhanced credibility. However, navigating the process of forming a professional corporation in Kansas can be daunting.

This article aims to provide a comprehensive guide on how to form a professional corporation in Kansas, covering everything from understanding the basics of this business entity to the essential steps and requirements you must comply with to launch your new venture successfully. Let’s dive in and explore the ins and outs of forming a professional corporation in Kansas!

What is a Professional Corporation in Kansas?

A professional service corporation (PSC), sometimes called a professional corporation (abbreviated as PC), is a type of organization authorized by state law to allow owners of particularly licensed professions in Kansas. The owner of a professional corporation is responsible for their own negligence or misconduct, but they are not held personally accountable for the actions of other owners. PC or P.C. is a regularly used abbreviation to identify professional corporations.

PCs and LLCs provide personal asset protection; that is, the personal assets are free from business debts. However, they do not have similar tax benefits. There is no secret formula as to which type of business structure is better than the other. It solely depends on the requirements of your business. However, forming an LLC is easier than setting up a PC in Kansas.

LLCBuddy Editorial Team

Unlike other types of corporations, owners of Professional Corporations get two types of citizenship. One is where they incorporated the corporation, and the other is where they conduct the business. This benefit is not available for other types of corporations. You can form a free LLC in Kansas if you hire a professional service that provides LLC formation at $0.

How to Form a Professional Corporation in Kansas

To form a Professional Corporation 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 Articles 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 Kansas, you should know if you are qualified. There are specific professions that are allowed to form a professional service corporation, including-

  • Doctors
  • Architects
  • Engineers
  • Accountants
  • Lawyers and others

You should be qualified to have a license to provide your service. In most cases, once you have graduated with your studies, passed the exam, and got your license, you may now form a professional corporation. However, if you work in an industry that doesn’t offer a license or professional certification, you should consider forming a corporation or limited liability company.

Step 2: Name your Professional Corporation in Kansas

After you have decided on the idea to form a professional corporation in Kansas, deciding the name for your corporation is significant. There is a complete guide on  Kansas LLC name guidelines for you to have a proper business name. Here are some regulations you must follow while 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)
  • No confusion with a government entity name.
  • A unique name is needed with no match
  • Limit of restricted words that need a license. 

In Kansas, 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 120 days. To keep the name, you must file a name reservation application with Kansas Secretary of State

A professional corporation, professional association, service corporation, or professional service corporation must be present in the name if it doesn’t already. You might opt to register your business under a different legal name if your preferred name isn’t available.  Once you have chosen a name, you can submit an application for a DBA (doing business as). In this manner, you can choose any name you desire to run a clinic or law firm.

Step 3: Choose the Kansas Registered Agent

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

Alternatively, you can serve as your own Kansas Registered Agent if you have the time. However, you must stay compliant to avoid missing any important documents from Kansas.

Step 4: File the Articles of Incorporation in Kansas

After you hire a Kansas Registered Agent to form a professional corporation, the next step is to file the Kansas Articles of Incorporation. In writing the Articles of Incorporation, the business name, owner’s contact information, corporation address, and Registered Agent contact information should be written. You should also include the names of all co-owners. All owners have to prove they have the proper license to practice the specific profession they intend to. 

Filing the Articles of Incorporation in Kansas may be done with two ways, online and by mail. The Articles of Incorporation fee may vary from different states. However, in Kansas, it costs $90 for filing online and by mail. 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 to Kansas Office of the Secretary of State, Memorial Hall, 1st Floor, 120 S.W. 10th Avenue, Topeka, KS 66612.

Step 5: Write an Operating Agreement in Kansas

An operating agreement is a document that contains all of your company’s organizational details. It is not required to draft an operating agreement in most states. Yet, having one as an internal document is strongly advised. The Kansas operating agreement includes information like-

  1. About Business
  2. Members and management
  3. Capital contribution
  4. Profit Distribution
  5. Change of membership
  6. Dissolution

Step 6: Designate the PC Board of Directors in Kansas

The next step is to appoint the initial board of directors in your PC in Kansas. All the initial directors must submit their details to the owner. The owner must keep the records and submit them in accordance with the Kansas SOS. When writing the By-laws, as a shareholder and owner, you must make sure there is a point mentioned about appointing a new director later. 

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. 

In creating corporate bylaws, you should include the following on how the decisions will be made.

  • The responsibilities are given to each officer.
  • How will judgments in business be made?
  • Where and when are the annual shareholder meetings?
  • The minimum number of shareholders required for decision-making.
  • Location and timing of dividend payments.

Step 8: Hold the First Board of Directors’ Meeting

After drafting the corporate bylaws, gather all the board of directors for the first meeting. This meeting will be finalized by appointing directors to manage the company’s daily operations, approve the bylaws, choose the corporation’s accounting year, and approve the stock issue. All board meetings should have minutes taken and stored with the company’s records.

Step 9: Request an EIN in Kansas

After documenting the operating agreement, you should get or request an Employer Identification Number (EIN). An EIN will serve as the tax ID for your professional corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website. 

The application of an EIN in Kansas 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 4 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 a number of ways. It will give your professional corporation the final advantage necessary to operate at full capacity without encountering legal or judicial issues.

Step 10: Open a Bank Account and Prepare for Taxes

Once you have filed and received your Employer Identification Number, you should open a bank account since you will use this account for yourself, your clients, and your employees. 

Your business dealings in Kansas  might be simpler by having a US business bank account because it boosts your company’s legitimacy and liquidity. For firms other than sole proprietorships, most banks demand an EIN to create a business bank account. Also, keeping separate finances helps you avoid combining personal and professional finances. Also, having an EIN makes tax preparation easier. With a professional corporation, you can anticipate paying employment and corporate taxes.

Step 11: Get a Business License in Kansas

Before your professional corporation operates in Kansas, you need to have a business license first. A business license is a formal document issued by the state government agency that allows you to operate your business in the geographic region that that agency governs. In Kansas, business license and permit costs depend on the business’s nature and type. You must check with the local authorities if any special licenses or city-based permits are needed. 

Step 12: File Your Taxes in Kansas

Finally, you are down to the last step. After getting a business license and being ready to operate, do not forget to file your taxes first. You should start paying taxes quarterly as soon as possible to avoid a large tax bill. Each state has different tax requirements. Go through the Kansas classification of taxes for the taxes an LLC in Kansas has to pay. 

Important Information

Maintaining Professional and Business License in Kansas

Now that you have established your professional corporation, you must maintain or renew your professional license every now and then. Even if your business is established but you don’t have a valid license to operate, your business is irrelevant. And, even if your professional license is still valid for a year or two, but your business license is already expired, it is still irrelevant. 

Make time to check the status of your licenses at least once per year. Then, you can keep from missing anything significant. If there are any issues, you can address them.

Filing an Annual Report in Kansas

In Kansas, you will be required to submit a report each year. 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 one yearly in Kansas, and you can do it yourself or hire someone else to handle it. Everything must be precise and up to date.

Advantages of Forming a Professional Corporation in Kansas

A professional corporation takes a lot of time to process and pursue. However, with the help of the Kansas Registered Agent, everything will become easier. In fact, there are advantages that will help you form a professional corporation in Kansas. 

  1. Limited Liability: The biggest advantage of setting up a professional corporation is that the owners are not held personally responsible for the debts and obligations of the company. This indicates that only the company’s assets will be confiscated to settle claims and creditors if the business is sued or declares bankruptcy. Additionally, this protection exempts corporate owners from being held accountable for other owners’ reckless or criminally negligent acts.
  1. Tax Deductions: Similar company expenses, such as employee fringe benefits, startup and operating costs, and equipment purchases, can be written off by professional companies in the same ways they can be for other kinds of firms. However, there are several tax deductions professional corporations can take advantage of that other types of businesses can’t. For example, the salaries and bonuses paid to owners and employees are tax-deductible.
  1. Retained Earnings: Professional corporations can keep a portion of their profits under the corporate tax system to grow their companies.

FAQs

What is a Professional Corporation in Kansas?
A professional corporation in Kansas is a business entity that is specifically designed to provide professional services to its clients. This type of corporation is regulated by the state and is limited to the professional services of its shareholders, officers, and directors.
How do I form a Professional Corporation in Kansas?
To form a professional corporation in Kansas, you must file Articles of Incorporation with the Kansas Secretary of State. The articles should include details such as the name of the corporation, the registered agent and their address for service of process, the purpose of the corporation, and the number and classes of shares that are authorized.
What are the requirements to form a Professional Corporation in Kansas?
To form a professional corporation in Kansas, you must meet the requirements set forth by the Kansas Secretary of State. This includes filing Articles of Incorporation with the Secretary of State, being a licensed professional in the state, and obtaining a Certificate of Authority from the Kansas Department of Revenue.
What documents do I need to form a Professional Corporation in Kansas?
To form a professional corporation in Kansas, you will need to file Articles of Incorporation with the Kansas Secretary of State and obtain a Certificate of Authority from the Kansas Department of Revenue. You will also need to provide a registered agent and their address for service of process.
Can I form a Professional Corporation in Kansas online?
Yes, you can form a professional corporation in Kansas online. You can file your Articles of Incorporation with the Kansas Secretary of State and obtain a Certificate of Authority from the Kansas Department of Revenue online.
What is the cost to form a Professional Corporation in Kansas?
The cost to form a professional corporation in Kansas will vary depending on the type of services you require. Filing the Articles of Incorporation with the Kansas Secretary of State costs $70, and the Certificate of Authority from the Kansas Department of Revenue costs $50.
What is the filing timeframe for forming a Professional Corporation in Kansas?
The filing timeframe for forming a professional corporation in Kansas is typically within 1-2 business days.
What are the benefits of forming a Professional Corporation in Kansas?
The main benefits of forming a professional corporation in Kansas include the limited liability protection it offers to the shareholders, officers, and directors, as well as the tax advantages it provides. It also allows you to operate as a professional entity in the state and gives you the opportunity to expand and grow your business.
What type of professionals can form a Professional Corporation in Kansas?
Any professional who is licensed and authorized to provide services in the state of Kansas can form a professional corporation. This includes professionals such as lawyers, doctors, accountants, architects, and engineers.
Does a Professional Corporation in Kansas need to have a board of directors?
Yes, a professional corporation in Kansas must have a board of directors. The board of directors is responsible for the management of the corporation and for making decisions about the corporation’s business affairs.
Does a Professional Corporation in Kansas need to hold annual meetings?
Yes, a professional corporation in Kansas must hold annual meetings in order to review the corporation’s performance and make decisions about the corporation’s business affairs.
Does a Professional Corporation in Kansas need to file annual reports?
Yes, a professional corporation in Kansas must file annual reports with the Kansas Secretary of State. These reports must be filed within a certain timeframe and must include financial statements and other information about the corporation’s activities.
How can I obtain a Certificate of Authority for my Professional Corporation in Kansas?
To obtain a Certificate of Authority for your professional corporation in Kansas, you will need to file an application with the Kansas Department of Revenue. The application must include information such as the name of the corporation, the registered agent and their address for service of process, and the number and classes of shares that are authorized.
Can I dissolve a Professional Corporation in Kansas?
Yes, you can dissolve a professional corporation in Kansas. To do so, you must file Articles of Dissolution with the Kansas Secretary of State. The articles must include details such as the name of the corporation, the registered agent and their address for service of process, and the date of dissolution.
What is the cost to dissolve a Professional Corporation in Kansas?
The cost to dissolve a professional corporation in Kansas is $70. This fee is for filing the Articles of Dissolution with the Kansas Secretary of State.
What is the filing timeframe for dissolving a Professional Corporation in Kansas?
The filing timeframe for dissolving a professional corporation in Kansas is typically within 1-2 business days.
What happens when a Professional Corporation in Kansas is dissolved?
When a professional corporation in Kansas is dissolved, it is no longer legally recognized as an entity in the state. All of its assets will be distributed to its shareholders and all of its debts and liabilities will need to be paid.
Does a Professional Corporation in Kansas need to file taxes?
Yes, a professional corporation in Kansas must file taxes with the Kansas Department of Revenue. The corporation must file an annual report and pay taxes on its profits.
Does a Professional Corporation in Kansas need to have a registered agent?
Yes, a professional corporation in Kansas must have a registered agent and their address for service of process. The registered agent is responsible for receiving legal documents on behalf of the corporation.
Does a Professional Corporation in Kansas need to have an Employee Identification Number?
Yes, a professional corporation in Kansas must have an Employee Identification Number. This number is used for filing taxes and other purposes.
Does a Professional Corporation in Kansas need to comply with applicable laws?
Yes, a professional corporation in Kansas must comply with all applicable laws and regulations. This includes laws and regulations related to taxes, corporate governance, and professional licensing.
What are the advantages of forming a Professional Corporation in Kansas?
The main advantages of forming a professional corporation in Kansas include the limited liability protection it offers to its shareholders, officers, and directors, as well as the tax benefits it provides. It also allows you to operate as a professional entity in the state and gives you the opportunity to expand and grow your business.
What is a professional corporation in Kansas?
A professional corporation in Kansas is a legal entity that is formed by professionals such as doctors, lawyers, accountants and architects to provide services to the public.
What are the requirements to form a professional corporation in Kansas?
To form a professional corporation in Kansas, you must obtain a Certificate of Authorization from the Kansas Secretary of State, must name the corporation and select a registered agent, and must file the Articles of Incorporation with the Secretary of State.
What are the benefits of forming a professional corporation in Kansas?
Forming a professional corporation in Kansas can provide your business with limited liability protection, help you attract and retain clients, and give you the ability to offer stock options or other benefits to your employees.
What are the corporate formalities for a professional corporation in Kansas?
Professional corporations in Kansas must comply with the same corporate formalities as other corporations, such as keeping accurate records of meetings, issuing shares to shareholders, and filing annual reports with the Secretary of State.
What is the process for filing the Articles of Incorporation for a professional corporation in Kansas?
The process for filing the Articles of Incorporation for a professional corporation in Kansas involves submitting the Articles of Incorporation to the Secretary of State with the applicable filing fee. The Articles must include the name of the corporation and the address of the registered agent.
What is the filing fee to form a professional corporation in Kansas?
The filing fee to form a professional corporation in Kansas is $50.
What are the ongoing requirements for a professional corporation in Kansas?
The ongoing requirements for a professional corporation in Kansas include filing annual reports, keeping corporate records, and holding annual meetings of the shareholders and directors.
How long does it take to form a professional corporation in Kansas?
It typically takes 2-4 weeks for a professional corporation in Kansas to be formed once the Articles of Incorporation have been filed.
What happens if a professional corporation in Kansas fails to comply with the corporate formalities?
If a professional corporation in Kansas fails to comply with the corporate formalities, it can be subject to fines or even dissolution.
Are there any special restrictions on a professional corporation in Kansas?
Yes, professional corporations in Kansas are subject to special restrictions such as a prohibition on transferring the corporate entity or engaging in certain activities.
What is the taxation structure for a professional corporation in Kansas?
Professional corporations in Kansas are subject to the same taxation structure as other corporations, including income taxes and franchise taxes.
Is it possible to convert a professional corporation in Kansas to another type of entity?
Yes, it is possible to convert a professional corporation in Kansas to another type of entity such as a limited liability company or a partnership.

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Conclusion

In forming a professional corporation in Kansas, having someone to help you build it is not necessary but suggestible. Even though it is easy because of the listed benefits and advantages above, forming your group of professional individuals will make it somehow successful. Just make sure to be guided by the steps and ensure that every one of the details and records is accurate and precise. And if you have any questions, share them in the comment section below.


About Author & Editorial Staff

Steve Goldstein, founder of LLCBuddy, is a specialist in corporate formations, dedicated to guiding entrepreneurs and small business owners through the LLC process. LLCBuddy provides a wealth of streamlined resources such as guides, articles, and FAQs, making LLC establishment seamless. The diligent editorial staff makes sure content is accurate, up-to-date information on topics like state-specific requirements, registered agents, and compliance. Steve's enthusiasm for entrepreneurship makes LLCBuddy an essential and trustworthy resource for launching and running an LLC.

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