Which of the following statements about professional corporations is false?
A)A professional corporation is formed only by a filing with the secretary of state.
B)A professional corporation is managed by a board of directors,unless a statute provides otherwise.
C)A professional corporation's shareholders have personal liability for the obligations of the professional corporation.
D)A professional corporation's rigid management structure makes it inappropriate for some smaller professional practices.

Question

Quizplus · Accepted Answer

The professional corporation is identical to a business corporation in most respects.It is formed only by a filing with the secretary of state,and it is managed by a board of directors,unless a statute permits it to be managed like a partnership.The rigid management structure makes the professional corporation inappropriate for some smaller professional practices.While professional shareholders have no personal liability for the obligations of the professional corporation,such as a building lease,they retain unlimited liability to their clients for their professional malpractice.A professional will have no personal liability,however,for the malpractice of a fellow shareholder or associate.

Which of the Following Statements About Professional Corporations Is False