Professional Corporation / PLLC Formation Packet — Texas

Professional Corporation / PA / PLLC Formation Packet — Texas

FLAG — TEXAS OFFERS PC, PA, AND PLLC

Unlike most states, Texas authorizes three distinct professional-entity forms under BOC Title 7:

Quick-Reference Summary

Choosing Among PC, PA, and PLLC in Texas

• PC (Ch. 303). Corporate form; shareholders, directors, officers. Cannot be used for the practice of medicine by doctors of medicine. Often chosen by accountants, attorneys, and similar professions that prefer a corporate structure.
• PA (Ch. 302). A Texas-specific association form available only to the § 301.003(2) healing-arts professions. Historically used by physician and dental groups; governed as a professional entity.
• PLLC (Ch. 304). LLC form with member/manager flexibility and pass-through taxation by default. Available to the widest set of professions, including physicians. Frequently the default modern choice.
• Liability (all three). The entity limits liability for general business debts and for other owners' conduct, but a professional remains personally liable for the professional's own negligence/malpractice.
• Ownership rule (all three). Only professional individuals (or professional organizations) licensed in the same service may own/manage (BOC Ch. 301). This is the core professional-entity restriction.

Pre-Filing Checklist

Licensing Verification

☐ Every proposed owner is a professional individual licensed to provide the same professional service (BOC § 301.003(5))
☐ Any proposed entity owner is a qualifying professional organization (BOC § 301.003)
☐ License numbers verified with the Texas examining board
☐ No disqualifying disciplinary action pending

Entity Selection (Texas-specific)

☐ Confirmed which of PC / PA / PLLC the profession may use (check Texas SOS profession list and your board)
☐ If practicing medicine as a doctor of medicine: PA or PLLC only — not a PC
☐ Engineers/architects: confirm whether a business corporation (Title 2) rather than a PC is required

Name, Agent, Fees

☐ Name availability checked (SOSDirect / SOS name inquiry)
☐ Name includes the correct designation (P.C. / P.A. / PLLC) and complies with BOC § 5.060 (not contrary to professional rules)
☐ Texas registered agent designated; written/electronic consent obtained (BOC §§ 5.201, 5.207)
☐ $300 filing fee confirmed for the chosen form (203 / 204 / 206)
☐ Professional liability / malpractice insurance obtained or confirmed

Post-Filing

☐ Federal EIN obtained (IRS Form SS-4)
☐ Texas franchise tax account / Webfile set up with the Comptroller
☐ Any board-specific entity registration completed
☐ FinCEN beneficial ownership report addressed

PART A — CERTIFICATE OF FORMATION: PROFESSIONAL CORPORATION (Form 203)

CERTIFICATE OF FORMATION — PROFESSIONAL CORPORATION

Article 1 — Entity Name and Type

The filing entity is a professional corporation. The name of the entity is [NAME], P.C. The name complies with BOC Chapter 5 and § 5.060.

• ☐ "Professional Corporation"
• ☐ "P.C."

Article 2 — Registered Agent and Registered Office

Registered agent (consent obtained; the corporation may not be its own agent):

• ☐ Texas entity/registered organization: [________________________________]
• ☐ Individual Texas resident: [________________________________]

Registered office (Texas street address, not a mailbox service): [________________________________], Texas [____] (BOC §§ 5.201, 5.207).

Article 3 — Professional Service / Purpose

The corporation is formed to provide the single professional service of [PROFESSION] and is governed as a professional entity under BOC Title 7. The corporation may not engage in a business other than rendering that professional service and services ancillary thereto.

Article 4 — Directors / Governing Authority

The corporation has a board of directors. Each director and officer is a professional individual licensed to provide the corporation's professional service (BOC Ch. 301).

Article 5 — Authorized Shares; Ownership Restriction

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

B. Ownership limited to professional individuals/organizations (BOC Ch. 301). Shares may be owned only by a professional individual licensed to provide the corporation's service or by a qualifying professional organization.

Article 6 — Share-Transfer Restriction; Mandatory Buy-Back

A. No shareholder may transfer or pledge shares to any person who is not a professional individual or professional organization eligible to own them under BOC Ch. 301. Any transfer in violation is void.

B. Upon the death, withdrawal, or disqualification (e.g., license revocation/suspension/surrender) of a shareholder, the corporation shall purchase, redeem, or cause a qualified person to acquire the affected shares within [____] days, at:

• ☐ Book value as of the most recent fiscal year-end;
• ☐ Fair market value by independent appraisal; or
• ☐ A formula in a Shareholders' Agreement / Other: [________________________________].

C. Each certificate shall bear a conspicuous legend reflecting these restrictions.

Article 7 — Organizer

Organizer: [________________________________], Address: [________________________________].

Article 8 — Effectiveness

This certificate is effective: ☐ on filing ☐ on a delayed date: [__/__/____].

Organizer signature: _________________________________________ Date: [__/__/____]

PART B — CERTIFICATE OF FORMATION: PROFESSIONAL ASSOCIATION (Form 204)

CERTIFICATE OF FORMATION — PROFESSIONAL ASSOCIATION

Article 1 — Entity Name and Type

The filing entity is a professional association. The name is [NAME], P.A. (or "Associated"), complying with BOC Ch. 5 and § 5.060.

Article 2 — Registered Agent and Registered Office

Registered agent (consent obtained): [________________________________]
Registered office (Texas street address): [________________________________], Texas [____].

Article 3 — Eligible Profession / Purpose

The association is formed to provide the professional service of [ONE OF: doctor of medicine / osteopathy / podiatry / dentist / chiropractor / optometrist / therapeutic optometrist / veterinarian / licensed mental health professional] under BOC § 301.003(2). It is governed as a professional entity under Title 7.

Article 4 — Members / Governing Authority

Each member and governing person is a professional individual licensed to provide the association's service (BOC Ch. 301).

Article 5 — Ownership and Transfer Restriction

A. Ownership interests may be held only by professional individuals/organizations eligible under BOC Ch. 301.

B. No member may transfer an ownership interest to an ineligible person; any such transfer is void.

C. On death or disqualification of a member, the association shall acquire or cause a qualified person to acquire the interest within [____] days, at a price determined under [book value / fair value / association agreement].

Article 6 — Organizer; Effectiveness

Organizer: [________________________________].
Effective: ☐ on filing ☐ on [__/__/____].

Organizer signature: _________________________________________ Date: [__/__/____]

PART C — CERTIFICATE OF FORMATION: PROFESSIONAL LIMITED LIABILITY COMPANY (Form 206)

CERTIFICATE OF FORMATION — PROFESSIONAL LIMITED LIABILITY COMPANY

Article 1 — Entity Name and Type

The filing entity is a professional limited liability company. The name is [NAME], PLLC (or "P.L.L.C." / "Professional Limited Liability Company"), complying with BOC Ch. 5 and § 5.060.

Article 2 — Registered Agent and Registered Office

Registered agent (consent obtained; PLLC may not be its own agent): [________________________________]
Registered office (Texas street address): [________________________________], Texas [____] (BOC §§ 5.201, 5.207).

Article 3 — Professional Service / Purpose

The company is formed to provide the professional service of [PROFESSION] and is governed as a professional entity under BOC Title 7 (Chs. 301, 304).

Article 4 — Governing Authority (Management)

The company:

• ☐ has managers (manager-managed)
• ☐ does not have managers (member-managed)

Pursuant to BOC Ch. 301, only a professional individual or professional organization may be an owner or manager; only a professional individual may be an officer of the PLLC.

Article 5 — Ownership Restriction; Membership-Transfer Restriction; Mandatory Buy-Back

A. Ownership limited (BOC Ch. 301). Membership interests may be owned only by a professional individual licensed to provide the company's service or by a qualifying professional organization.

B. Transfer restriction. No member may transfer or assign a membership interest to a person ineligible to own it under BOC Ch. 301. Any such transfer is void.

C. Mandatory buy-back on death or disqualification. Upon the death, withdrawal, or disqualification of a member (e.g., loss of license), the company shall purchase or cause a qualified person to acquire the membership interest within [____] days, at [book value / fair market value / formula in the Company Agreement].

Article 6 — Organizer; Effectiveness

Organizer: [________________________________].
Effective: ☐ on filing ☐ on [__/__/____].

Organizer signature: _________________________________________ Date: [__/__/____]

Licensing-Board Approval / Registration Block

☐ Name cleared against professional rules (BOC § 5.060) — confirmed with the [________________________________] (Texas examining board) on [__/__/____].

☐ Board entity registration obtained (if required to practice through the entity) — Reference No.: [________________________________], dated [__/__/____].

☐ Board pre-approval not required for the SOS filing — confirmed on [__/__/____].

☐ Entity form confirmed available to this profession (PC / PA / PLLC) — confirmed on [__/__/____].

Signature / Acknowledgment Block

Sources and References

• Texas Business Organizations Code, Title 7 — Professional Entities (Chs. 301–304) — https://law.justia.com/codes/texas/business-organizations-code/title-7/
• BOC § 301.003 (Definitions) — https://codes.findlaw.com/tx/business-organizations-code/bus-org-sect-301-003/
• Texas SOS — Information on the Texas Business Organizations Code — https://www.sos.state.tx.us/corp/boc.shtml
• Texas SOS — Business and Nonprofit Forms (Forms 203, 204, 206) — https://www.sos.state.tx.us/corp/forms_boc.shtml
• Form 203 — Certificate of Formation, Professional Corporation (instructions; $300) — https://www.sos.state.tx.us/corp/instructions/203.shtml
• Form 204 — Certificate of Formation, Professional Association (instructions) — https://www.sos.state.tx.us/corp/instructions/204.shtml
• Form 206 — Certificate of Formation, Professional Limited Liability Company ($300) — https://www.sos.state.tx.us/corp/forms/206_boc.pdf
• Texas SOS — Business Filings & Trademarks Fee Schedule — https://www.sos.texas.gov/corp/forms/806_boc.pdf
• Texas Comptroller — Franchise Tax — https://comptroller.texas.gov/taxes/franchise/