N.J. Stat. tit. 14A, ch. 17

N.J. Stat. tit. 14A, ch. 17
in effect

N.J. Stat. § 14A:17-1 Legislative intent

It is the legislative intent to provide for the incorporation of an individual or group of individuals to render the same professional service to the public for which such individuals are required by law to be licensed or to obtain other legal authorization. L.1969, c. 232, s. 1, eff. Dec. 16, 1969.

N.J. Stat. § 14A:17-2 Short title

This act may be cited as "The Professional Service Corporation Act." L.1969, c. 232, s. 2, eff. Dec. 16, 1969.

N.J. Stat. § 14A:17-3 Terms defined.

3. Terms defined. As used in this act, the following words shall have the meanings indicated: (1) "Professional service" shall mean any type of personal service to the public which requires as a condition precedent to the rendering of such service the obtaining of a license or other legal authorization and which prior to the passage of this act and by reason of law could not be performed by a corporation. By way of example and without limiting the generality thereof, the personal services which come within the provisions of this act are the personal services rendered by certified public accountants, architects, optometrists, ophthalmic dispensers and technicians, professional engineers, land surveyors, land planners, chiropractors, physical therapists, registered professional nurses, psychologists, dentists, osteopaths, physicians and surgeons, doctors of medicine, doctors of dentistry, podiatrists, veterinarians and, subject to the Rules of the Supreme Court, attorneys-at-law; (2) "Professional corporation" means a corporation which is organized under this act for the sole and specific purpose of rendering the same or closely allied professional service as its shareholders, each of whom must be licensed or otherwise legally authorized within this State to render such professional service; (3) "Closely allied professional service" means and is limited to the practice of (a) architecture, professional engineering, land surveying and land planning and (b) any branch of medicine and surgery, optometry, opticianry, physical therapy, registered professional nursing, psychology, and dentistry; (4) "Domestic professional legal corporation" means a professional corporation incorporated under P.L.1969, c.232 (C.14A:17-1 et seq.) for the sole purpose of rendering legal services of the type provided by attorneys-at-law; (5) "Foreign professional legal corporation" means a corporation incorporated under the laws of another state for the purpose of rendering legal services of the type provided by attorneys-at-law. L.1969, c.232, s.3; amended 1981, c.425, s.1; 1986, c.131; 1991, c.105, s.1; 1995, c.375, s.1; 2005, c.27; 2005, c.259, s.22 2014, c.79.

N.J. Stat. § 14A:17-4 Application of act

This act shall not apply to any individual or groups within this State who, prior to the passage of this act, were permitted to organize a corporation and perform personal services to the public by the means of a corporation, and this act shall not apply to any corporations organized by such individual or group of individuals prior to the passage of this act; provided, however, any such individual or group of individuals or any such corporation may bring themselves and such corporation within the provisions of this act by amending the certificate of incorporation in such a manner so as to be consistent with all the provisions of this act and by affirmatively stating in the amended certificate of incorporation that the shareholders have elected to bring the corporation within the provisions of this act. L.1969, c. 232, s. 4, eff. Dec. 16, 1969.

N.J. Stat. § 14A:17-5 Professional corporation and foreign professional legal corporation

5. Professional corporation and foreign professional legal corporation. (a) One or more persons, each of whom is duly licensed or otherwise legally authorized to render the same or closely allied professional service within this State, may organize and become a shareholder or shareholders of a professional corporation for pecuniary profit under the provisions of the Business Corporation Act of New Jersey (Title 14A, Corporations, General, of the New Jersey Statutes), for the sole and specific purpose of rendering such professional service. (b) A foreign professional legal corporation may render legal services of the type provided by attorneys-at-law in this State provided by that it secures a certificate of authority from the Secretary of State in accordance with Chapter 13 of the Business Corporation Act of New Jersey (Title 14A, Corporations, General, of the New Jersey Statutes) and provided further that every shareholder or employee of the foreign professional legal corporation providing legal services in this State is an attorney-at-law licensed and eligible to practice in this State under the Rules of the Supreme Court. L.1969,c.232,s.5; amended 1981,c.425,s.2; 1995,c.375,s.2.

N.J. Stat. § 14A:17-6 Directors and officers

A professional corporation which has only one shareholder need have only one director who shall be such shareholder. Such one shareholder shall also serve as the president of the corporation. The other officers of the corporation in such a case need not be licensed or otherwise legally authorized to render the same professional service within this State, as such one shareholder. A professional corporation which has only 2 shareholders need have only 2 directors who shall be such shareholders. The 2 shareholders shall, between them, fill all the officerships of the professional corporation. L.1969, c. 232, s. 6, eff. Dec. 16, 1969.

N.J. Stat. § 14A:17-7 Rendering of professional service limited to licensed personnel; charges authorized

7. Rendering of professional service limited to licensed personnel; charges authorized. No professional corporation or foreign professional legal corporation may render professional services in this State except through its officers, employees and agents who are duly licensed or otherwise legally authorized to render such professional services within this State; provided, however, that this provision shall not be interpreted to include in the term "employee" as used herein clerks, secretaries, administrators, bookkeepers, technicians and other assistants who are not usually and ordinarily considered by law, custom and practice to be rendering professional service to the public for which a license or other legal authorization is required in connection with the profession to be practiced, nor does the term "employee" include any other person who performs all his employment under the direct supervision and control of an officer, agent or employee who is himself rendering professional service to the public on behalf of the professional corporation; provided, that no person shall, under the guise of employment, practice a profession unless duly licensed to practice that profession under the laws of this State. Notwithstanding any other or contrary provisions of the laws of the State, a professional corporation or foreign professional legal corporation may charge for its services, may collect such charges, and may compensate its officers, employees and agents, including those persons excluded from the term "employee" as used herein. L.1969,c.232,s.7; amended 1991,c.105,s.2; 1995,c.375,s.3.

N.J. Stat. § 14A:17-8 Professional relationship; personal liability; corporate liability

8. Professional relationship; personal liability; corporate liability. Nothing contained in this act shall be interpreted to abolish, repeal, modify, restrict or limit the law now in effect in this State applicable to the professional relationship and the contract, tort and other legal liabilities between the person furnishing the professional services and the person receiving such professional service and to the standards for professional conduct, including the confidential relationship between the person rendering the professional services and the person receiving such professional service, if any; and all confidential relationships previously enjoyed under the laws of this State or hereafter enacted shall remain inviolate. Any officer, shareholder, agent or employee of a professional corporation or a foreign professional legal corporation shall remain personally and fully liable and accountable for any negligent or wrongful acts or misconduct committed by him, or by any person under his direct supervision and control, while rendering professional service on behalf of the corporation in this State to the person for whom such professional service was being rendered; provided, that the personal liability of shareholders of a professional corporation, in their capacity as shareholders of such corporation, shall be no greater in any aspect than that of a shareholder-employee of a corporation organized under the provisions of the Business Corporation Act of New Jersey, exclusive of this act. The professional corporation shall be liable up to the full value of its property for any negligent or wrongful acts or misconduct committed by any of its officers, shareholders, agents or employees while they are engaged on behalf of the corporation in the rendering of professional service. The assets of a professional corporation shall not be liable to attachment for the individual debts of its shareholders. Notwithstanding the foregoing, the relationship of an individual to a professional corporation or a foreign professional legal corporation with which such individual is or may be associated, whether as shareholder, director, officer, employee or agent, shall in no way modify, extend or diminish the jurisdiction over such individual, of and by whatever State, agency, office or authority which licensed or otherwise legally authorized him to render service in a particular field of endeavor in this State. L.1969,c.232,s.8; amended 1995,c.375,s.4.

N.J. Stat. § 14A:17-9 Limitations on corporate business activity

9. Limitations on corporate business activity. No professional corporation shall engage in any business other than the rendering of the professional services for which it was specifically incorporated; and no foreign professional legal corporation shall engage in any business in this State other than the rendering of legal services of the type provided by attorneys-at-law; provided, that nothing in this act or in any other provisions of existing law applicable to corporations shall be interpreted to prohibit such corporation from investing its funds in real estate, mortgages, stocks, bonds or any other type of investments, or from owning real or personal property necessary for, or appropriate or desirable in, the fulfillment or rendering of its professional services. L.1969,c.232,s.9; amended 1995,c.375,s.5.

N.J. Stat. § 14A:17-10 Who may own shares; voting trust; estate ownership

10. Who may own shares; voting trust; estate ownership. (a) No professional corporation may issue any of its shares to anyone other than an individual who is duly licensed or otherwise legally authorized to render the same professional service as that for which the corporation was incorporated. No shareholder of a professional corporation shall enter into a voting trust agreement or proxy or any other type of agreement vesting another person not a shareholder of the corporation with the authority to exercise the voting power of any or all of his shares. Subject to the provisions of the corporation's certificate of incorporation, the estate of a deceased shareholder may continue to hold the shares of such shareholder for a reasonable period of administration of the estate, but shall not be authorized to participate in any decisions concerning the rendering of professional service. (b) A foreign professional legal corporation rendering legal services in this State shall have at least one shareholder who is an attorney-at-law licensed and eligible to practice in this State under the Rules of the Supreme Court. L.1969,c.232,s.10; amended 1995,c.375,s.6.

N.J. Stat. § 14A:17-11 Disqualification to render service

If any officer, shareholder, agent or employee of a professional corporation becomes legally disqualified to render the same professional service as that for which the corporation was organized, he shall forthwith sever all employment with such corporation and shall not, directly or indirectly, participate or share, as a shareholder, in any earnings or profits realized by such corporation on account of professional services rendered on or after the effective date of such disqualification. L.1969, c. 232, s. 11, eff. Dec. 16, 1969.

N.J. Stat. § 14A:17-12 Transfer of shares

No shareholder of a professional corporation may transfer his shares in such corporation except to the corporation or to another individual who is eligible to be a shareholder of such corporation. L.1969, c. 232, s. 12, eff. Dec. 16, 1969.

N.J. Stat. § 14A:17-13 Corporate existence; corporation to convert to business corporation; acquisition of shares of disqualified or deceased shareholder

(a) A professional corporation shall have perpetual existence until dissolved in accordance with the provisions of the Business Corporation Act of New Jersey. (b) Whenever all shareholders of a professional corporation shall cease at any one time and for any reason to be duly licensed or otherwise legally authorized to render the same professional service for which such corporation was organized, or if such corporation shall for any reason fail to comply or require compliance with the provisions of this section or of section 11 of this act, said corporation shall thereupon be treated as converted into and shall operate thereafter solely as a business corporation under applicable provisions of the Business Corporation Act of New Jersey, exclusive of this act. (c) Within 375 days following the date of death of a shareholder, or within 90 days following his disqualification to own shares in the corporation, all of the shares of such shareholder shall be transferred to, and acquired by, the corporation or persons qualified to own such shares. If such transfer and acquisition is not otherwise effected within said period, the corporation shall forthwith purchase and redeem all of his shares at the book value thereof, determined as of the end of the month immediately preceding death or disqualification. For this purpose, the book value shall be determined by an independent certified public accountant employed by the professional corporation from the books and records of the corporation in accordance with the regular methods of accounting used by it. Such determination shall be conclusive on the professional corporation and its shareholders. Nothing contained in this section shall prevent the parties involved from making any other arrangement or provision in the certificate of incorporation or by-laws, or by agreement, to transfer the shares of a deceased or disqualified shareholder to the corporation or to persons qualified to own the same, whether made before or after the death or disqualification of the shareholder, provided that within the period herein specified, all the stock involved shall have been so transferred. L.1969, c. 232, s. 13, eff. Dec. 16, 1969.

N.J. Stat. § 14A:17-14 Corporate name.

14. a. Corporate name. The corporate name of a professional corporation shall contain the full or last names of one or more of the shareholders or a name descriptive of the type of professional service in which the corporation will be engaged and shall also contain the words "chartered," "professional association" or "a professional corporation," or the abbreviation "P.A.," "P.C.," "PA," or "PC". The use of the word "company," "corporation" or "incorporated," or any other word, words, abbreviations, affix or prefix indicating that it is a corporation, in the corporate name of a professional corporation, other than the words "chartered," "professional association" or "a professional corporation," or the abbreviation "P.A.," "P.C.," "PA," or "PC" is specifically prohibited. It shall be permissible, however, for the corporation and the shareholders to render professional services or to exercise its authorized powers under a name which is identical to its corporate name except that the words "chartered," "professional association" or "a professional corporation," or the abbreviation "P.A.," "P.C.," "PA," or "PC" is omitted. Nothing in this subsection shall limit the right of a professional corporation to use or register an alternate name pursuant to N.J.S.14A:2-2.1, provided that the alternate name contains the full or last name of one or more of the shareholders or adequately describes the type of professional service in which the professional corporation will be engaged. b. Notwithstanding the provisions of subsection a. of this section, the corporate name of a professional corporation may contain the name of a deceased person only if, at the time of the person's death: (1) that person's name was part of the corporate name; or (2) that person's name was part of the name of an existing partnership and at least two-thirds of that partnership's partners become shareholders of the professional corporation. L.1969, c.232, s.14; amended 1982, c.97, s.1; 1991, c.50; 2011, c.27, s.1

N.J. Stat. § 14A:17-15 Applicable law; consolidation, merger; report, contents

15. Applicable law; consolidation, merger; report, contents. The Business Corporation Act of New Jersey shall be applicable to a professional corporation and to a foreign professional legal corporation except to the extent that any of the provisions of this act are interpreted to be in conflict with the provisions of the Business Corporation Act of New Jersey, and in such event the provisions and sections of this act shall take precedence with respect to a professional corporation and a foreign professional legal corporation. Except for a domestic professional legal corporation, a professional corporation organized under this act may consolidate or merge only with another professional corporation organized under this act and empowered to render the same professional service. A merger or consolidation with any foreign corporation is prohibited. A domestic professional legal corporation may consolidate or merge either with another domestic professional legal corporation or with a foreign professional legal corporation provided that the registration requirements of this act and the Rules of the Supreme Court are complied with. A professional corporation shall annually furnish a report to the office of the Secretary of State on a date designated by the Secretary of State showing the names and post-office addresses of all its shareholders, directors and officers, which shall certify that, with the exception permitted in section 6, all such persons are duly licensed or otherwise legally authorized to render the same professional service in this State. A foreign professional legal corporation shall annually furnish a report to the office of the Secretary of State on a date designated by the Secretary of State showing the names and post-office addresses of all its shareholders, directors and officers, and shall certify that the foreign professional legal corporation is authorized to render legal services of the type provided by attorneys-at-law in its state of incorporation and further certify that the shareholders and employees providing such services in this State are attorneys-at-law licensed and eligible to practice in this State. This report shall be made on forms prescribed and furnished by the Secretary of State, but shall contain no information except that expressly called for by this section. It shall be signed by the president or vice-president and the secretary or an assistant secretary of the corporation, and acknowledged by the persons signing the report before a notary public or other officer duly authorized to administer oaths, shall be filed in the office of the Secretary of State, and shall be in lieu of the regular annual report of corporations otherwise required by the Business Corporation Act of New Jersey. L.1969,c.232,s.15; amended 1982,c.97,s.2.; 1995,c.375,s.7.

N.J. Stat. § 14A:17-16 Provisions severable; repealer

If any provision of this act or the application thereof to any person or circumstances be held invalid, such invalidity shall not affect other provisions or applications of this act which can be given effect without the invalid provision or application, and to this end the provisions of this act are declared to be severable. All laws and parts of laws in conflict with any of the provisions of this act are hereby repealed, to the extent so in conflict. L.1969, c. 232, s. 16, eff. Dec. 16, 1969.

N.J. Stat. § 14A:17-17 Construction

The provisions of this act shall not be construed as repealing, modifying or restricting the applicable provisions of law relating to incorporations, sales of securities or regulating the several professions enumerated in this act except insofar as such laws conflict with the provisions of this act. L.1969, c. 232, s. 17, eff. Dec. 16, 1969.

N.J. Stat. § 14A:17-18 Repeal

Chapter 233 of the laws of 1962, as amended, is hereby repealed, but all corporations formed under the provisions thereof shall continue and shall be governed by the provisions of this act. L.1969, c. 232, s. 18, eff. Dec. 16, 1969.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.njleg.state.nj.us/legislative-activity/statutesFetched: 10/17/2026

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