PRIVATE BUSINESS CORPORATION (PBC)

Here are some key things to know about a Private Business Corporation (PBC):

• A PBC is a business structure that allows for limited liability as in a Private Limited Company but where all partners/members are involved in management decisions.
• At least one member is required to register a PBC. The maximum number is twenty.
• Members’ liability is limited. Personal assets are protected from business debts like in a private limited company.
• It must have PBC as part of its legal name.
• Members should be individuals not other businesses.
• Declaration of continuance annual filing and other ongoing reporting is required to the Companies Registry.
• Profits/losses are distributed among members.
• PBC’s are taxed similar to a Private Limited Company.
• It provides advantages of shared management and liability protection of a company structure.
• Common use cases include partnerships of professionals like lawyers, accountants, architects, etc.
• Can be suitable for startups where founders want control like a partnership.
• Provides a flexible alternative to a private limited company for small businesses.

What are the advantages?

• Limited liability – Members are not personally liable for debts/liabilities of the PBC, protecting their personal assets like a private limited company.
• Flexible governance – Decision making power rests equally with all members like a traditional partnership through member participation.
• Shared management – Control and management is equally shared between participating members as opposed to rigid company structure.
• Continuity of business – A PBC continues operating even if a member leaves, retires or dies.
• Credibility with clients – Being a registered legal structure provides air of legitimacy for business dealings.
• Ownership incentives – Members are directly involved and motivated by profit share unlike diffuse public company shareholders.
• Asset protection – Personal assets of members remain protected even if the PBC incurs major liabilities.