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You might be asking a couple of different things.

A PC, as you refer to it, is probably a different kind of corporation, under state law, where eligible shareholders are restricted to licensed professionals. The rules on this vary somewhat from state to state. And they use different names, professional corp., service corp., etc.

There is nothing in the federal tax laws that keep such a corporation from making an S election, as long as the shareholders are individuals or qualified trusts. I'm thinking that typically a PC has to have individuals as shareholders.

For a new business, the advantages to being a C corporation are rapidly disappearing. The few advantages that remain are in the fringe benefit area. Owners can have a medical reimbursement plan, participate in a cafeteria/flex benefit plan. That's about it. Self-employed owners, partners, S-Corp shareholders, can all deduct their health insurance on page 1 of 1040, so they get it pre-tax one way or the other.

A professional service corporation (PSC), under federal tax law, is a C corporation taxed at a flat 35% rate. This creates a big incentive for the owners to take out all the earnings as salary/bonus, etc.

With the rise of LLCs and LLPs, I don't like S-Corps as much as I used to, either. With an LLC or LLP, you SHOULD get about the same liability protection (discuss this with your lawyer), but you don't have the same issues with imputed interest on advances to/from owners.

There's a lot more to this area, but that's about what I can tell you for free without knowing more about your situation.

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