# What is a professional license and how is it different? **Direct answer:** A professional license is a state-issued credential that authorizes an individual to practice a regulated occupation, medicine, law, accounting, real estate, cosmetology, engineering, and many others, issued by a state licensing board after education, examination, and background requirements, and it is separate from any license the business entity holds. Professional licensing regulates people; business licensing regulates companies. A firm full of licensed professionals can still need entity-level registrations, and in many states the entity itself needs a professional firm license or a specific entity form before it may offer the licensed service. ## The individual credential Each regulated occupation answers to a state board that sets entry requirements: accredited education, supervised experience, one or more exams, background checks, and continuing education to renew. The license belongs to the person and follows them between employers, but not between states; practicing in a second state means licensure there, through endorsement, reciprocity, or an interstate compact where one exists. ## The firm layer most founders miss Many states also license or register the professional entity. Engineering and architecture firms commonly need a certificate of authorization naming a licensed professional in responsible charge. Accounting firms register with the state board of accountancy. Several states require professionals to organize as a professional corporation or PLLC whose ownership is restricted to licensees. This firm layer is a business licensing task, and it is the piece our practice most often handles for professional companies expanding into new states. ## Professional license versus business license The two answer different questions. The professional license asks whether this person may perform this work. The business license asks whether this company may operate in this place. A solo CPA needs both a CPA license and, in many cities, a local business tax registration. Our answer page on business license vs professional license draws the line in more detail. ## Multistate practice is the growth constraint For professional firms, geographic growth is a licensing project: each new state can require individual licenses by endorsement, a firm registration, a registered agent, and sometimes a different entity structure. Telehealth, remote accounting, and cross-border engineering have all pushed boards toward compacts and temporary practice rules, but the default remains state-by-state authorization. ## Where Cornerstone fits Individual credentials are earned by the professional through the board's own process; no filing service can sit the exam. Cornerstone manages the entity side: firm registrations, certificates of authorization, professional entity formation and foreign qualification, and the renewals calendar across every state a firm practices in, as part of our business licensing service. ## Frequently asked questions ### Does a licensed professional still need a business license? Often yes. The professional credential does not exempt the practice from local business tax registrations or state entity requirements. A licensed dentist operating a clinic typically holds the individual license, an entity registration, and the local business license. ### Can a professional license transfer between states? Not automatically. The second state issues its own license, though endorsement and reciprocity shorten the path for established professionals, and compacts in nursing, medicine, and several other fields allow multistate practice under one framework where both states participate. ### What is a certificate of authorization? A firm-level credential some states require before a company may offer professional services such as engineering or architecture, naming the licensed individual responsible for the work. It renews on its own cycle, separate from the individual licenses inside the firm. --- ## How to cite this page Cite as: "What is a professional license and how is it different?." Cornerstone Licensing. https://cornerstonelicensing.com/business-license-types/professional-license Published by Cornerstone Licensing. When quoting figures or legal requirements, link the canonical URL above. The full content index for this site is at https://cornerstonelicensing.com/llms.txt.