You might have noticed the letters “PA” after an attorney’s name if you have ever seen it. Now, what do these letters actually mean? The term “professional association” (abbreviated “PA”) refers to a particular kind of corporate structure that some lawyers elect to establish. An alternative name for it is a professional corporation.
Similar to a corporation or limited liability business (LLC), a PA is a sort of legal entity. It provides liability protection for the lawyer and is a different legal entity. This means that if the lawyer is sued, any damages granted in the litigation cannot be paid out of their own assets. Any damages or liabilities resulting from the attorney’s work must be covered by the PA.
One typical misunderstanding is that a PA is a subset of an attorney. This is not the case, though. A PA is merely a possible form of business organization for an attorney. The lawyer must still adhere to all state regulations in order to practice law in their jurisdiction.
So, how does one go about doing so legally? An attorney must submit articles of incorporation to the state where they intend to practice law in order to create a PA. To run a business in the state, the attorney must also get the relevant licenses or permissions. Following the formation of the PA, the lawyer may start operating as the PA’s legal representative.
Attorneys may benefit tax-wise by creating a PA in addition to liability protection. The PA may deduct some business costs from its taxable income, including rent and equipment costs. The PA and the lawyer may have to pay less taxes as a result.
In conclusion, the term “professional association” (abbreviated “PA”) refers to a type of corporate structure that some lawyers elect to create. It’s not a certain kind of lawyer. An attorney must submit articles of incorporation to the state and get all required licenses and permits in order to operate as a legitimate PA. Attorneys may benefit tax-wise and from liability protection by establishing a PA.