What is a Domestic Professional Corporation?
If you are an entrepreneur, then you already know what a domestic professional corporation is. This is simply an entity that formed for the purpose of conducting business in one’s own country. These corporations are run and organized just like any other business, but they are not allowed to act like a sole proprietor or any other kind of company. In fact, the only people that can have stock in a domestic professional corporation are those that actually own it. There are other types of entities that can be considered a domestic professional corporation, but they do not qualify as one under Canadian law.
As with all countries, there are certain rules and regulations for what is a domestic professional corporation. In Canada, you can start one up as a sole proprietor and call it your corporation, but you cannot use it as your only business entity or you will face some stiff penalties. A shareholder must have at least one share in order to have any rights to the corporation. Additionally, the name of the corporation should be the same as the name of the shareholder. The shareholders usually live in the area where the corporation is located, although this may not always be the case.
For what is a domestic professional corporation to do business in Canada, it must register its status as a business with the applicable Canadian government authorities. This registration process can take anywhere from six months to two years, depending on what is a domestic professional corporation’s status with the government. Once the paperwork has been filed, all of the shareholders will be notified of the corporation’s status. In order to do this, they will need to send the relevant documentation to the office that handled their registration. Once the paperwork is completed and submitted, the new corporation will be able to trade legally in Canada.
Another requirement that comes with what is a domestic professional corporation is that it will have to file all of its articles of association with the securities regulators of Canada. All investors are required to sign these articles. These articles of association set out the ways in which the company and its shareholders will be invested. This is the first line of defense against any law suit that the company may have against others that do not follow the law. The Articles of Association will also list the company’s capital assets and liabilities.
What is a domestic professional corporation also means that the company is restricted in terms of the share ownership that it can allow to its investors. Only five shareholders are allowed on each block of shares. Also, the maximum number of shares that can be owned by an individual shareholder of the corporation is only five. If a company is considered to be a partnership, what is a domestic professional corporation will continue to apply.
There are many other requirements that must be met for what is a domestic professional corporation to be considered an S corporation. For one, the partners involved must all have minimum investment requirements of at least one thousand dollars each. The minimum requirements to form what is a domestic professional corporation are almost always the same as the requirements for what is an LLC or a limited liability company. Some other things that are required are that all members must be US citizens and that the corporation must be in good standing.
To take it one step further, what is a domestic professional corporation will also require that a certain minimum value of stock must be owned by any members. In order to make sure that what is a domestic professional corporation has the protection it needs, what is a domestic professional corporation must be what is called a “pass-through entity”. Basically this means that all of the income and profits generated by the corporation will be derived from the dividends of the members. However, what is a pass-through entity does not mean that all of the income or profit will be generated by dividends only. Some of it will come from other activities such as investment and many other activities.
So now you know what is a domestic professional corporation, but what is an S corporation? Well, an S corporation is considered to be an entirely separate entity from its owners. It is not considered a pass-through entity and as such will receive dividends on its own. Therefore, what is a domestic professional corporation may seem like just another name for what is an S corporation, but what is a domestic professional corporation really?