The Act allows these professionals to form "professional firms" that provide limited liability protection for the business’s obligations, but not for the individual professional’s malpractice or misconduct. Who Is Covered Practitioners in professions like: • Medicine, surgery, pharmacy, veterinary medicine • Law and accountancy • Dentistry, nursing, psychology, social work • Architecture, engineering, interior design, and others can elect to form professional firms under this Act. Forms of Organization
Professional firms may be organized as: • For-profit or nonprofit corporations • Limited liability companies (PLLCs) • Limited liability partnerships (LLPs)
To operate as a professional firm, you first form the entity under the relevant Minnesota statute (e.g., Business Corporation Act, Revised Uniform LLC Act) and then opt into the Professional Firms Act by filing specific language with the Secretary of State. Compliance and Governance • The Act restricts ownership and management to licensed professionals in the relevant fields to prevent non-professionals from impacting professional judgment. • Professionals whose licenses are suspended or revoked cannot continue governance roles. • The professional firm must file initial and annual reports with licensing boards, listing owners and governance participants. • Violations can result in losing professional firm status, impacting authorization to provide professional services. Naming Requirements Professional firms must include specific designations in their names, such as “Professional Corporation,” “P.L.L.C.,” or “L.L.P.”, to signal their professional nature and regulatory status. Important Considerations • This Act does not shield individual professionals from personal liability for malpractice.
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