Professional Corporation / PLLC Formation Packet — Alabama

Professional Corporation / PLLC Formation Packet — Alabama

Quick-Reference Summary

Part 1 — Choosing PC vs. PLLC in Alabama

Part 2 — Pre-Filing Checklist

License Verification

☐ All proposed shareholders/members, directors/managers, and officers hold current, active Alabama licenses (or qualified-state licenses where reciprocity is permitted) to render the single profession to be practiced
☐ License numbers recorded and verified with the licensing board
☐ No license suspended, revoked, or terminated (a person whose authorization is terminated/suspended is not a "qualified person" under § 10A-4-1.03)

Licensing-Board Pre-Approval / Post-Formation Filing

☐ Determined whether the licensing board requires pre-approval or a certificate before filing
☐ Determined post-formation filing deadlines (e.g., Board of Dental Examiners and Board of Medical Examiners filings within 30 days of formation)
☐ Confirmed whether the board issues a "qualified person" certificate required before any share transfer (dental: required per board rule)

Name Availability and Designation

☐ Name searched and available with the Alabama Secretary of State
☐ Name includes required designation ("professional corporation"/"P.C." for a PC; an LLC/PLLC designation for a PLLC) under Ala. Code § 10A-1-5.08
☐ Name complies with any board-specific naming rule (e.g., dentist names plus "P.C.")
☐ Name reservation obtained if required (Alabama generally requires a name reservation/certificate of name reservation before formation filings — verify current process)

Registered Agent and Office

☐ Alabama registered agent appointed with an Alabama street (physical) address (Ala. Code § 10A-1-5.31)
☐ Registered agent consent obtained

Fees and Insurance

☐ Current Secretary of State filing fee confirmed at sos.alabama.gov
☐ Professional liability / malpractice insurance obtained or confirmed (and any board-mandated minimum coverage met)
☐ Federal EIN obtained from the IRS

Part 3 — Certificate of Formation — Professional Corporation (Fillable)

STATE OF ALABAMA — CERTIFICATE OF FORMATION OF A DOMESTIC PROFESSIONAL CORPORATION

The undersigned incorporator(s), each a natural person duly licensed to practice [PROFESSION] in the State of Alabama, hereby form a domestic professional corporation pursuant to Ala. Code § 10A-4-1.01 et seq. and the applicable provisions of Title 10A of the Code of Alabama, and adopt the following Certificate of Formation:

Article I — Name

The name of the corporation is:

[________________________________]

The name includes the designation required by Ala. Code § 10A-1-5.08:

• ☐ "Professional Corporation"
• ☐ "P.C."
• ☐ Board-required professional designation (e.g., "D.M.D.," "D.D.S."): [________________________________]

Article II — Professional Purpose (Single Profession)

The corporation is organized for the sole and specific purpose of rendering the professional service of [PROFESSION], and services ancillary thereto, and for no other purpose. The corporation shall not engage in any business other than the rendering of the single professional service for which it is organized, except as permitted by law.

The profession practiced is:

• ☐ Medicine ☐ Dentistry ☐ Law ☐ Public Accounting (CPA) ☐ Architecture ☐ Professional Engineering
• ☐ Psychology ☐ Optometry ☐ Chiropractic ☐ Veterinary Medicine ☐ Podiatry
• ☐ Marriage & Family Therapy / Counseling ☐ Other: [________________________________]

Article III — Professional Services and Licensure

A. The corporation shall render professional services only through individuals who are duly licensed or otherwise legally authorized to render the professional service of [PROFESSION] in the State of Alabama.

B. The corporation shall comply with all rules and regulations of the [NAME OF LICENSING BOARD] governing the practice of [PROFESSION] and with Ala. Code § 10A-4-1.01 et seq.

Article IV — Registered Agent and Registered Office

The registered agent and registered office of the corporation in Alabama are (Ala. Code § 10A-1-5.31):

Registered Agent: [________________________________]
Registered Office (Alabama street address): [________________________________]
City, State, ZIP: [________________________________], Alabama [____]

The registered agent has consented to serve.

Article V — Capital Stock

A. The corporation is authorized to issue [________] shares of common stock, [par value $[____] per share / no par value].

B. Qualified-Person Restriction (Ala. Code § 10A-4-3.01). The corporation may issue or transfer stock, fractions of shares, and rights or options to purchase stock only to "qualified persons" as defined in Ala. Code § 10A-4-1.03. Any issuance or transfer in violation of this restriction is void (except a transfer by operation of law or court decree).

Article VI — Incorporator(s)

Article VII — Directors

A. The initial board of directors consists of [____] director(s).

B. Each director must be a qualified person licensed to render [PROFESSION] in Alabama. Officers and directors who are not licensed in the profession may not participate in any decision constituting the practice of [PROFESSION] (cf. Ala. Code § 10A-4-3.06).

Article VIII — Professional Licensing Covenant

A. Each shareholder, director, and officer shall maintain a current, active license to render [PROFESSION] in Alabama (or in a qualified state where reciprocity is permitted).

B. If any shareholder becomes a "disqualified person" (license terminated or suspended) under Ala. Code § 10A-4-1.03, that shareholder shall transfer all shares in accordance with Article IX, and any non-licensed person shall not participate in professional decisions.

C. The corporation shall make all filings required by the [NAME OF LICENSING BOARD] (including, where applicable, filing a certified copy of this Certificate of Formation and ownership information within the board's deadline, commonly 30 days).

Article IX — Share-Transfer Restriction and Mandatory Buy-Back

A. No transfer to disqualified persons. No share, fraction of a share, or right or option to purchase shares shall be transferred or pledged to any person who is not a qualified person under Ala. Code §§ 10A-4-1.03 and 10A-4-3.01. Any transfer in violation of this Article is void.

B. Mandatory buy-back on death or disqualification. Upon the death of a shareholder or upon a shareholder becoming a disqualified person, the corporation shall purchase (or cause a qualified person to purchase) all of that shareholder's shares within [____] days at a price determined by:

• ☐ Book value as of the most recent fiscal year-end
• ☐ Fair market value determined by an independent appraiser
• ☐ Formula set forth in the Shareholders' Agreement
• ☐ Other: [________________________________]

C. Board certificate (if required). Where the licensing board so requires by rule, no share shall be transferred or issued until the board's certificate stating that the transferee/issuee is a "qualified person" is presented to and filed with the corporation.

D. All stock certificates shall bear a legend reflecting these transfer restrictions.

Article X — Dissolution and Wind-Down

A. Upon dissolution, all professional obligations and pending matters shall be completed or transferred to another qualified person or professional entity authorized to render [PROFESSION] in Alabama.

B. The corporation shall give the [NAME OF LICENSING BOARD] any notice of dissolution required by board rule.

Incorporator Signature

IN WITNESS WHEREOF, the undersigned incorporator(s) executed this Certificate of Formation on [__/__/____].

Part 4 — Certificate of Formation — Professional LLC (PLLC) (Fillable)

STATE OF ALABAMA — CERTIFICATE OF FORMATION OF A DOMESTIC LIMITED LIABILITY COMPANY (Professional Services)

The undersigned organizer(s) form a domestic limited liability company to render professional services pursuant to Ala. Code § 10A-5A-1.01 et seq. and § 10A-5A-8.01, and adopt the following Certificate of Formation:

Article I — Name

The name of the company is:

[________________________________]

The name includes the LLC designation required by Ala. Code § 10A-1-5.08:

• ☐ "P.L.L.C." / "PLLC" (professional limited liability company)
• ☐ "L.L.C." / "LLC" with board-approved professional naming
• ☐ Board-required professional designation: [________________________________]

Article II — Professional Purpose (Single Profession)

The company is organized to render the professional service of [PROFESSION] and services ancillary thereto, and shall render professional services only in compliance with the rules of the licensing authority for that profession (Ala. Code § 10A-5A-8.01(a)).

Article III — Professional Services and Licensure

A. The company shall render professional services only through members, managers, employees, or agents who are duly licensed or otherwise legally authorized to render [PROFESSION] in Alabama.

B. Each individual who renders professional services as a member or employee remains personally liable for any negligent or wrongful act or omission in which the individual personally participates, to the same extent as a sole practitioner (Ala. Code § 10A-5A-8.01(b)).

C. The company shall comply with all rules of the [NAME OF LICENSING BOARD] and with any additional requirements imposed by the board (Ala. Code § 10A-5A-8.01(e)-(f)).

Article IV — Registered Agent and Registered Office

Registered Agent: [________________________________]
Registered Office (Alabama street address): [________________________________]
City, State, ZIP: [________________________________], Alabama [____]

Article V — Members / Managers

• ☐ Member-managed ☐ Manager-managed

Article VI — Membership-Transfer Restriction

A. A member's transferable interest in the company may be voluntarily transferred only to a qualified person (Ala. Code § 10A-5A-8.01(g); "qualified person" per Ala. Code § 10A-4-1.03 by analogy and board rule).

B. Mandatory buy-back on death or disqualification. Upon the death of a member or a member becoming disqualified to render [PROFESSION], the company shall purchase (or cause a qualified person to purchase) that member's transferable interest within [____] days at a price determined by:

• ☐ Book value ☐ Fair-market-value appraisal ☐ Formula in the Operating Agreement ☐ Other: [________________________________]

C. The Operating Agreement shall reflect these transfer restrictions and the single-profession purpose.

Organizer Signature

IN WITNESS WHEREOF, the undersigned organizer(s) executed this Certificate of Formation on [__/__/____].

Part 5 — Licensing-Board Approval / Registration Block

☐ Board approval / certificate attached — The [NAME OF LICENSING BOARD] has issued its approval, consent, or certificate of registration for this professional entity. Document dated [__/__/____] is attached as Exhibit A.

☐ Post-formation board filing required — A certified copy of the Certificate of Formation and ownership information must be filed with the [NAME OF LICENSING BOARD] within [____] days of formation (e.g., dental and medical boards: within 30 days). Filing completed on [__/__/____].

☐ No pre-filing board approval required — The licensing board does not require pre-filing approval; the entity will comply with all applicable post-formation board rules.

Board / Authority: [________________________________]
Contact / Address: [________________________________]
Reference / File No.: [________________________________]

Final Signature Block

The undersigned, being duly licensed and authorized, certify that the information in this packet is true and correct.

Sources and References

• Ala. Code § 10A-4-1.03 (Definitions) — https://law.justia.com/codes/alabama/title-10a/chapter-4/article-1/section-10a-4-1-03/
• Ala. Code § 10A-4-3.01 (Issuance and transfer of stock — qualified persons) — https://law.justia.com/codes/alabama/title-10a/chapter-4/article-3/section-10a-4-3-01/
• Ala. Code § 10A-5A-8.01 (LLCs performing professional services) — https://law.justia.com/codes/alabama/title-10a/chapter-5a/article-8/section-10a-5a-8-01/
• Alabama Limited Liability Company Law of 2014 (Title 10A, Chapter 5A) — https://law.onecle.com/alabama/title-10a/chapter-5a/index.html
• Alabama Secretary of State — Business Services / Forms (Certificate of Formation, Form SOSDF-8) — https://www.sos.alabama.gov/business-services
• Alabama Certificate of Formation — LLC (Form SOSDF-8) — https://www.sos.alabama.gov/sites/default/files/form-files/sosdf-8.pdf
• Ala. Admin. Code r. 270-X-4-.01 (Board of Dental Examiners — professional corporations/associations) — https://www.law.cornell.edu/regulations/alabama/Ala-Admin-Code-r-270-X-4-.01