What Does PC Mean After a Business Name?

by Jack Busch; Updated September 26, 2017

When the letters "PC" or "P.C." appear after a business name in the U.S., it stands for "Professional Corporation." Entities that have registered as a professional corporation are required to identify themselves with PC when doing business. Registering as a PC has certain benefits and drawbacks.

Significance

Companies typically incorporate for one main reason: to protect themselves from liability. If a company goes bankrupt or is sued, the assets of the individual members, partners or owners are protected. For example, if you own a delivery company and one of your truck drivers causes a car accident, the damaged parties must sue the company. Even though you own the company, you will not be liable to pay out of your own pocket in the case of a lawsuit.

Identification

There are several common types of corporations. The type of corporate structuring that is most similar to a PC is an LLC, or a limited liability corporation. An LLC is taxed similarly to a sole proprietorship or a limited partnership (LP) but does not hold the individual members liable for the debts of the company.

A PC, however, is an entity type that is only available to certain licensed professionals, such as chiropractors, architects, medical professionals, accountants and attorneys.

Depending on the state, there are other types of entities that are similar to a PC, such as a Limited Liability Partnership (LLP) and a Professional Limited Liability Corporation (PLLC). These structures also protect corporations from the malpractice or negligence of individual members.

Benefits

The most important way a PC varies from an LLC is in how liability is handled in the case of malpractice. If a partner in a firm that is incorporated as a PC is sued for malpractice or negligence, the remaining partners who are not accused of wrongdoing cannot be held liable. For example, if an attorney is sued for acting in his own interest, the damaged party must sue the individual attorney rather than the firm itself.

Considerations

When determining whether a suit should be brought against a company or an individual, plaintiffs must prove that the individual was working outside of the entity's corporate purpose and mission in order to sue an individual.

Protection

If a corporation is found to be a sham operation organized solely to protect the defendant from liability, a plaintiff can move to pierce the corporate veil. Because of this, it is important for PCs to follow the procedural expectations of a corporation by holding regular board meetings, establishing a corporate mission and adhering to accounting policies.

About the Author

Jack Busch graduated from University of Iowa in 2007 with a Bachelor of Arts in English with honors and has been publishing web content ever since. He has contributed to groovyPost.com, 7Tutorials.com, PrimerMagazine.com and various other tech websites. He also co-authored "Network Your Computer & Devices Step by Step" (Microsoft Press).