Corporations – Professional Corporation – Texas
TEXAS LAW SUMMARY
PROFESSIONAL CORPORATION: ATTORNEYS AT LAW
Texas Professional Corporation Act (Vernon’s Texas Civil Statutes, Article 1528e)
Texas Business Corporation Act, Article 1.01 et seq.
A professional corporation formed to engage in the practice of law is subject to the provisions of both the Texas Professional Corporation Act and the Texas Business Corporation Act. The practice of law in the State of Texas by a professional corporation is also subject to and controlled by the rules and regulations of the State Bar of Texas and the Texas Supreme Court.
The primary distinctions between a “regular corporation” and a “professional corporation” which is organized to engage in the practice of law are: 1. When the provisions of the Texas Professional Corporation Act and the Texas Business Corporation Act are in conflict, the provisions of the Texas Professional Corporation Act control.
2. A professional corporation may use the initials “P.C.” in its corporate name in lieu of the word or in lieu of the abbreviation of the word “corporation,” “company,” or incorporated.”
3. A “professional legal service” is any type of personal service rendered by an attorney-at-law which requires as a condition precedent to the rendering of such service in Texas the obtaining of a license, permit, certificate of registration, or other legal authorization.
4. All shareholders, officers, and directors of a professional corporation organized to render the professional services of attorneys must be licensed or otherwise authorized to engage in the practice of law in the State of Texas.
5. If a shareholder, officer, or director of a professional corporation organized to render the professional services of attorneys becomes legally disqualified to render those services, that person MUST IMMEDIATELY sever all employment ties with the corporation and terminate all financial interest in the corporation.
6. If any successor in interest of any shareholder is not licensed to engage in the practice of law in the State of Texas, the person holding that interest MUST IMMEDIATELY terminate all financial interest in the corporation.
7. A professional corporation organized to render the professional services of attorneys may render professional service in Texas only through its officers, employees and individual agents who are duly licensed to render such professional service in Texas. (This does not include employees such as clerks, secretaries, bookkeepers, technicians, nurses, assistants and other individuals who are not usually and ordinarily considered by custom and practice to be rendering professional service for which a license or other legal authorization is required)
8. The attorney-client relationship is not affected because the professional services are being rendered by the corporation.
9. The professional corporation (but not the individual shareholders, officers or directors) is jointly and severally liable with the officer, employee or agent rendering professional service for any professional errors, omissions, negligence, incompetence or malfeasance on the part of any officer, employee or agent when that officer, employee or agent is acting in the course of his employment for the professional corporation.
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