The Michigan Professional Service Corporation Act has been eliminated as a separate act and the vast majority of its provisions have been codified in Chapter 2A of the Business Corporation Act. Chapter 2A specifies when incorporators must incorporate a corporation as a professional corporation and when they may incorporate as either a professional corporation or as a regular business corporation. As a professional corporation’s annual report filed with LARA now must contain a certification that the entity has met the requirements of Chapter 2A, it is imperative that these procedures are followed correctly.
A corporation MUST incorporate as a professional corporation if it is providing one or more services in a “learned” profession, regardless of whether or not it is providing other professional services. Services in a learned profession are defined by the Business Corporation Act as “services provided to the public by a dentist, an osteopathic physician, a physician, a surgeon, a doctor of divinity or other clergy, or an attorney-at-law.” Therefore, if a corporation is providing ANY of these services, it MUST incorporate as a professional corporation under the requirements of Chapter 2A.
A corporation MAY incorporate as a professional corporation if it is providing one or more professional services, NONE of which are services in a learned profession. If a corporation is not providing any services of a learned profession, they may choose to incorporate as a professional corporation or as a regular business corporation. The key issue is whether or not the corporation is providing services in a learned profession. If a corporation is providing any services from a learned profession, they must incorporate as a professional corporation.
If you have any questions about Chapter 2A of the Business Corporation Act, including whether or not your corporation should incorporate as a professional corporation, please contact the attorneys at Demorest Law Firm.
