Professional Corporation Upgrade
Are you a Dentist, Physician, Real Estate Broker, Architect or any other licensed professional in California? Most of you want liability protection and low taxes for their practice. Until now you only had one solution – the professional corporation (PC).
As you know the internet makes it easy for anyone to lookup your business details. Full name, address, email, telephone number, etc. for public consumption. Id thieves and hackers love this valuable free data.
Unfortunately you also know these corporations are demanding. They take your mental energy, time and money. But you deal with it to get the perceived benefits. Yet most of you really have no liability protection because you don’t do the required record keeping to keep the veil intact.
Honestly do you have written records of all corporate minutes since you started the business? This includes Directors decisions and meetings, Stockholders concerns, Officers resolutions and decisions. Even though it’s dangerous and important, it feels like a big waste of time.
You’d really prefer an LLC, but the state legislature and lawyers prevent you because they write the laws. Didn’t you know that professional corporations and their annual maintenance obligations are steady bread and butter income for many law firms?
Here’s what is risk if you fail to maintain annual corporate records:
- Unlimited Personal Liability
- Tax Audit Penalties
- Insurance Claims Denied
And now you have Business Identity Theft dangers. This is the advanced version of personal identity theft. You might think you’re boxed in. But there is an alternative, upgrade your professional corporation to a business trust.
Business Trust Company
This organizational format is very effective and much less hassle. You still get limited liability plus partnership or corporate (S) tax classification. And without any of the bureaucratic obligations of a professional corporation to the state. No annual filings, no fees, no franchise taxes, no resident agent, no mail to open, no veil risk, etc.
And since your private business details are never registered with the Secretary of State you’re safe from business identity theft and hackers. You get privacy from outsiders predators. Don’t you get hit on enough?
State Licensing Board – Advertising
The state licensing boards could care less about how your business organization is setup. Their primary concern is truthful advertising and public safety.
How you operate your practice – as sole proprietor, partnership corporation or business trust is an irrelevant factor.
Fictitious Name Permit
All you do is apply for a fictitious name permit. There are only three requirements. Your physical location. A current or previous associates’ name and profession for advertising. A list of all professionals in the practice.
Dental Licensee – Susan Rode
Business Trust Company XXI
DBA – Rode Dental Group
Lawyers and Attorneys
If you go ask these guys about a business trust, expect little response. That’s because they really don’t know how they work. And professional corporations generate gobs of legal fees from you for them. Because there is so little work to do with a business trust, lawyers lose money. This math quiz isn’t difficult to figure out.
If you want to research a business trust look up commercial trust on google. You’ll see many of your mutual fund investments are organized as business trusts.
The standard solution decided for you by bureaucrats and lawyers is the professional corporation. You ask the State for permission. You pay fees, franchise taxes and burdened with tons of paperwork.
Now you have a better understanding of the alternative to professional corporations. All the most important elements such as limited liability, corporate tax rates, and much more can be had with a Business Trust.
And you might create Business Trust #2 and #3 to anonymously and separately hold your leases or real estate. Keep those assets isolated and safe from the core professional practice.
Once you discover the freedom with a business trusts you’ll never look back. Check it out.