Multistate Professional Responsibility Exam Practice Question
Three attorneys decide to incorporate their practice as a professional corporation. Under the rules governing law firm structures, which of the following is true?
The corporation is subject to professional conduct rules.
The corporation has non-attorney shareholders.
Shareholders are licensed attorneys in the state.
The corporation distributes profits to non-lawyer investors.
Professional corporations must consist solely of licensed attorneys. This ensures that control and ownership remain within the legal profession, maintaining adherence to ethical standards. The correct answer reflects this requirement by stating that shareholders are licensed attorneys. The other options incorrectly suggest that non-attorneys can have ownership or that the corporation is exempt from professional conduct rules, both of which are not permissible.
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