More About Professional Corporations
More About Professional Corporations
As you know, law corporations are professional corporations that provide legal services registered with both the State Bar of California and the California Secretary of State. Some of the namestyle rules that pertain to law corporations can be found in the California Business and Professions Code, Sections 6160 through 6172.
Though the code makes reference to the notion that you might be able to practice law through law corporation that utilizes a fictitious name by applying for a fictitious name permit, the State Bar does not have any procedure in place at this time to complete this process.
The basic rule is that a law corporation can only practice under the name that has been registered for the corporation with the California Secretary of State.
Forming a law corporation involves a set of documents that must follow a complex set of rules that you need to complete with accuracy and submit to the California Secretary of State and the California Bar Association. Before taking any steps, it is important to know the basics—how to choose a name for your law firm, professional law corporation abbreviation, and the type of business entity for your law firm here in California.
A preliminary decision that must be made in the formation of your business entity is what kind of business entity am I going to create for my practice.
Which Business Entity: LLC or Professional Corporation?
The California State Laws must be followed when forming a corporation. These are detailed in the following:
- Corporations Code
- California Business and Professions Code
- California Code of Regulations
- California Rules of Professional Responsibility
Formation TIP: California business law does not permit attorneys to set up a law firm, but you have other options: sole proprietorship, partnership, or a professional law corporation. A professional law corporation is the business entity of choice. This is especially true if you have several partners. . This is because incorporating limits your liabilities and offers better tax benefits.
Law Firm Naming Requirements and Important Reminders
So, your next move is to name and register your business. In registering, follow the steps below:
- Check whether your professional law corporation name is already registered with the California Secretary of State.
- If you’re using a name other than your own for the name of the practice, it would also be wise to run a California trademark search: https://tmbizfile.sos.ca.gov/Search . You can also check with the US Patent and Trademark Office.
- File your Articles of Incorporation with the Secretary of State.
- Register your corporation with the California State Bar. Remember to include your law firm’s bylaws, a sample share certificate that contains the appropriate restrictions on share ownership, and the application form that includes the complete names of all the attorneys associated with your corporation.
- Submit the Guarantee for Claims in the appropriate amount and a Declaration of Compliance with Rule 1-400.
- Pay the application and registration fees indicated in the schedule of charges and deadlines.
To guarantee that you are submitting the right documents, seek advice of a corporate attorney familiar with the formation of professional law corporations. It is best that you not get on the state bar’s radar for not following the rules if at all possible.
How To Name Your Law Firm—Giving Your Law Corporation a Law-Compliant and Market-Friendly Name
Naming your business seems like an easy task. After all, the names of law firms appear standard. The following reminders will be useful if you are wondering how to choose a name for your law firm.
- Your chosen law firm name must comply with the California Rules of Professional Conduct and the California Business and Professions Code
- The California Rules of Professional Conduct prohibits attorneys from making false or misleading representations pertaining to the name of their firm. NOTE: unlike many of the professions that are required to use specific names or words as part of the Namestyle rules related to naming a corporation, the State Bar does not have any such strict requirement. The key is to have the corporate name be neither “false nor misleading”
- This is similar to the American Bar Association’s Rule 7.1, however that is on a national level and you will want to focus on the California-specific laws for your business.
- Your law firm’s name must include wordings or abbreviations that denote corporate existence. For example, “Inc.”, “Professional Corporation,” “PC,” “Professional Law Corporation,” “Professional Association“, “A Professional Legal Corporation,” “APC” or “Corporation”.
- You may also include the names of your law firm’s principals, such as:
- Current principals of your legal firm
- A trade name that is not misleading
- A deceased principal in case of succession
How To Choose a Name for Your Law Firm in California
Law firm names are often straightforward. Usually, they consist of the names of the principals, shareholders or partners plus a professional law corporation abbreviation.
To clearly demonstrate this, let’s walk through a thought process as an example. Fred Flintstone and Barney Rubble who wanted to form a professional law corporation. They could use ‘Law Offices of Flintstone and Rubble, PC” as a name for their practice. Of course, Fred and Barney would need to be the principal attorneys who own the practice. However, the firm could not use their names if they were not owners within your business; for example, if they were merely associates of the firm. Even if they were vital employees within your business, if they are not a principal, shareholder, or partner/owner–they cannot be named.
As so many attorneys use their personal names in the name of their law corporations, one might get the impression that you are restricted to using these individual’s names as the only method to determine your law corporation’s business name, however that is not the case.
You can work on some branding techniques or simply make it easy for your clients to understand the kind of legal assistance that you offer by naming your firm after your specific area of practice. For example, “Flintstone Accident Attorneys” implies that your firm specializes in cases involving accidents. If you are practicing family law, “Rubble Family Law Firm” would probably be appropriate.
Where you can start to get slightly more creative with this is in the description of what you do without using your personal name. If you were an intellectual property firm, you could start exploring names such as “Idea Protection Firm, PC” This describes the nature of your firm with those specific words, without misleading and without misusing any names. It is still clear to your clients what your services are within your law firm, which is most important. If they tried to use ‘David & Goliath’ in their name as a metaphor to suggest or imply they were “giant killers” or no one could take them on: this would not work. This metaphorical name would be considered misleading and would not clearly state how they helped their clients or who they were. This is all predicated upon availability and any other checks needed to be made prior to applying for the name.
The whole purpose of the regulations on names for law corporations is to be straightforward and clear. Your name shouldn’t be misleading and that is part of the reason these rules and regulations are in place. For example:
Common Words, Designations, & Abbreviations Used in Names of Professional Law Corporations
Using terms, corporate designations, and abbreviations correctly in your law firm is also important, because if used incorrectly it could be considered misleading. For example, it would be a problem if you used the term ‘group’ in your corporation’s name, if you were a one man-firm without any employees in the group. This would be deemed to be misleading.
And we get it, a lot of time you don’t want to appear small. The time and effort getting to the point of opening a law firm is no small feat and last thing you want is for that to be downplayed. But again, misleading your clients by appearing “bigger” is where you can run into trouble with the bar (and honestly, your long-term clients as well).
The following words are common in the names of law firms, and what their use implies:
- Group – Rule 1-400 in the California Rules of Professional Conduct states that you must name at least one employee – which does not have to be an attorney – if you use the word “Group” in your company name.
- Law Offices – This implies that your law firm has multiple addresses and attorneys – including the shareholders – per address.
- Law Office – Use this language if you only have one office address.
- Associates – This term means naming at least two more attorneys employed by the firm – in addition to the shareholder – and executing a guarantee in compliance with Rule 3.158 of State Bar Law Corporation.
- Associate – Including the term ‘Associate’ means having a fellow lawyer employed by the firm. The same Rule 3.158 of State Bar Law Corporation applies to this type of arrangement.
Common abbreviations are associated with the corporate designation. Corporate designations and abbreviations that are allowed include:
- A Professional Corporation
- A Professional Law Corporation
- Professional Corporation
- Professional Law Corporation
- Law Corporation
- APC or A.P.C
- PC or P.C.
- Prof. Corp.
- A Professional Legal Corporation
- Professional Legal Corporation
- A Legal Corporation
- Inc.
- Incorporated
- Corporation
- A California Professional Corporation
- L.C.
- Ltd.
- Limited
- P. A.
- Professional Association
Also, while law firms can register as a professional law corporation, you are not allowed to use APLC and PLC as it is considered to be misleading. In other states or countries, it may suggest to the public that the entity is a “Public Liability Company” or a “Professional Legal Consultant”. For a detailed list of Law Corporation name definitions and abbreviations, visit this link.
Ask an attorney who can help you form and register your law firm in California to prevent delays or other issues. Doing so will also help you give your law firm a proper and law-compliant business name.
Can A Law Corporation Use a DBA?
DBA or “doing business as” means that you are using a “trade name” or a fictitious business name (FBA) other than your official company or corporation name. As an attorney, you may want to attract people in specific situations or conditions (I.e., accident victims, medical malpractice victims, etc).
That said, let’s look at another example. But say Fred Flintstone formed his law corporation using the name the law office of Fred Flintstone, Inc. Let’s also say that he wanted to use use a catchy law firm name like “Brave Med Attorneys” or “Best Medical Malpractice Attorneys in the World” and the like. Will that be permissible?
California State Bar does not permit a California law corporations to use a DBA. To dive into more of the details, check out our article: How Can A Law Firm Have A DBA in California. (Yes, the title is a bit of clickbait that you know the answer already.)
Why You Need to Have a Compliant Law Corporation Name from the START
The naming and registration processes do have an associated cost and take time (remember, your time is also a cost). You need to ensure your name is complaint way before you even get to the process of registering the corporation with the State Bar, to avoid additional fees, delays, and time.
How does the process work for forming a law corporation with the law offices of Gale and Vallance, and why do I need to have my name complaint from the start?
- We will help you prepare all of the legally required formation documents for your professional law corporation. Included in the documentation will be the initial charter documents are the articles of incorporation all the way through the application for registration with the State Bar.
- From a timing standpoint, the initial formation typically takes anywhere between 3 to weeks to complete the entire process.
- It will ordinarily take the State Bar another 4 weeks to process your application for registration as a professional market formation. This will not be a delay in your operation of your practice. You will be good to go as soon as you have legally formed your professional corporation.
- Many of the attorneys that we worked with in the past have expressed concerns about working their way through the Namestyle rules because it’s just difficult to figure out exactly where those roles can be found and how they apply to their particular situation. The 2nd point of stress is the thought of dealing with the State Bar.
Working with a law corporation formation lawyer will ensure that all your submissions are compliant with the rules set by the California State Bar in terms of name and application documentation.
Seek an Attorney to Help You Choose the Right Name for Your Professional Law Corporation
It is important to have the right name for your professional law corporation from the start of your formation process. Seeking help from a lawyer who has experience in forming professional law corporations in California is the smartest path to save you time, money, and ensure you are meeting all requirements for formation with a correct business name.
Don’t waste time figuring out all the rules and laws just so you know how to choose a name for your law firm, only to miss one detail and need to start the process again.
Gale & Vallance has extensive experience in formation services (including how to choose a name for your law firm) in California. We will guide you through the process here in California and help prepare your documents so you can submit them without worry the first time. Whether you are contemplating setting up a professional law corporation or already have a name for your corporation in mind, we can help you get started. Schedule a kick-off call with us today!
OTHER DOCUMENTATION FOR REFERENCE:
Law Corporation Name Definitions & Abbreviations
