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The professions usually covered are accountants, engineers, physicians, and other health care professionals, lawyers, psychologists, social workers, and veterinarians. These professionals must usually be organized for the sole purpose of providing professional services.
In some states, this is the only incorporation option available for certain professionals.
According to tax and legal experts, there is no longer any significant tax benefit to professional corporation status over sole proprietorship or partnership. The IRS sees most professional corporations as personal service corporations.
Professional corporations can shield owners from liability. While it can't protect a professional from his/her own malpractice liability, it can protect against liability from negligence of an associate. Malpractice insurance is still the way to go for most professionals, however. Still, you might want to consider this corporate status as a back-up against rising rates or inadequate coverage.
