Bill Text: NY A03046 | 2017-2018 | General Assembly | Introduced
Bill Title: Relates to certified public accountants.
Spectrum: Partisan Bill (Democrat 59-1)
Status: (Introduced - Dead) 2017-01-24 - referred to higher education [A03046 Detail]
Download: New_York-2017-A03046-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 3046 2017-2018 Regular Sessions IN ASSEMBLY January 24, 2017 ___________ Introduced by M. of A. MOYA -- read once and referred to the Committee on Higher Education AN ACT to amend the education law, the business corporation law, the partnership law and the limited liability company law, in relation to certified public accountants The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Section 7408 of the education law is amended by adding a 2 new subdivision 6 to read as follows: 3 6. Notwithstanding any other provision of law, any firm established to 4 lawfully engage in the practice of public accountancy pursuant to arti- 5 cle fifteen of the business corporation law, articles one and eight-B of 6 the partnership law, or articles twelve and thirteen of the limited 7 liability company law shall be deemed eligible to register pursuant to 8 this section. 9 § 2. Section 1503 of the business corporation law is amended by adding 10 a new paragraph (h) to read as follows: 11 (h) Any firm established for the business purpose of incorporating as 12 a professional service corporation formed to lawfully engage in the 13 practice of public accountancy, as such practice is respectively defined 14 under article one hundred forty-nine of the education law shall be 15 required to show (1) that a simple majority of the ownership of the 16 firm, in terms of financial interests, including ownership-based compen- 17 sation, and voting rights held by the firm's owners, belongs to individ- 18 uals licensed to practice public accountancy in some state, and (2) that 19 all shareholders of a professional service corporation whose principal 20 place of business is in this state, and who are engaged in the practice 21 of public accountancy in this state, hold a valid license issued under 22 section seventy-four hundred four of the education law or are public 23 accountants licensed under section seventy-four hundred five of the 24 education law. Although firms may include non-licensee owners, the firm EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD07971-01-7A. 3046 2 1 and its owners must comply with rules promulgated by the state board of 2 regents. Notwithstanding the provisions of this paragraph, a firm 3 incorporated under this section may not have non-licensee owners if the 4 firm's name includes the words "certified public accountant," or "certi- 5 fied public accountants," or the abbreviations "CPA" or "CPAs". Each 6 non-licensee owner of a firm that is incorporated under this section 7 shall be a natural person who actively participates in the business of 8 the firm or its affiliated entities. For purposes of this subdivision, 9 "actively participate" means to provide services to clients or to other- 10 wise individually take part in the day-to-day business or management of 11 the firm. Such a firm shall have attached to its certificate of incorpo- 12 ration a certificate or certificates demonstrating the firm's compliance 13 with this paragraph, in lieu of the certificate or certificates required 14 by subparagraph (ii) of paragraph (b) of this section. 15 § 3. Section 1507 of the business corporation law is amended by adding 16 a new paragraph (c) to read as follows: 17 (c) Any firm established for the business purpose of incorporating as 18 a professional service corporation pursuant to paragraph (h) of section 19 fifteen hundred three of this article may issue shares to individuals 20 who are authorized by law to practice in this state a profession which 21 such corporation is authorized to practice and who are or have been 22 engaged in the practice of such profession in such corporation or a 23 predecessor entity, or who will engage in the practice of such profes- 24 sion in such corporation within thirty days of the date such shares are 25 issued and may also issue shares to employees of the corporation not 26 licensed as certified public accountants, provided that: 27 (i) at least fifty-one percent of the outstanding shares of stock of 28 the corporation are owned by certified public accountants, 29 (ii) at least fifty-one percent of the directors are certified public 30 accountants, 31 (iii) at least fifty-one percent of the officers are certified public 32 accountants, 33 (iv) the president, the chairperson of the board of directors and the 34 chief executive officer or officers are certified public accountants. 35 No shareholder of a firm established for the business purpose of incor- 36 porating as a professional service corporation pursuant to paragraph (h) 37 of section fifteen hundred three of this article shall enter into a 38 voting trust agreement, proxy or any other type of agreement vesting in 39 another person, other than another shareholder of the same corporation, 40 the authority to exercise voting power of any or all of his or her 41 shares. All shares issued, agreements made or proxies granted in 42 violation of this section shall be void. 43 § 4. Section 1508 of the business corporation law is amended by adding 44 a new paragraph (c) to read as follows: 45 (c) The directors and officers of any firm established for the busi- 46 ness purpose of incorporating as a professional service corporation 47 pursuant to paragraph (h) of section fifteen hundred three of this arti- 48 cle may include individuals who are not licensed to practice public 49 accountancy, provided however that at least fifty-one percent of the 50 directors, at least fifty-one percent of the officers and the president, 51 the chairperson of the board of directors and the chief executive offi- 52 cer or officers are authorized by law to practice in this state a 53 profession which such corporation is authorized to practice, and are 54 either shareholders of such corporation or engaged in the practice of 55 their professions in such corporation.A. 3046 3 1 § 5. Section 1509 of the business corporation law, as amended by chap- 2 ter 550 of the laws of 2011, is amended to read as follows: 3 § 1509. Disqualification of shareholders, directors, officers and 4 employees. 5 If any shareholder, director, officer or employee of a professional 6 service corporation, including a design professional service corpo- 7 ration, or any firm established for the business purpose of incorporat- 8 ing as a professional service corporation pursuant to paragraph (h) of 9 section fifteen hundred three of this article, who has been rendering 10 professional service to the public becomes legally disqualified to prac- 11 tice his profession within this state, he shall sever all employment 12 with, and financial interests (other than interests as a creditor) in, 13 such corporation forthwith or as otherwise provided in section 1510 of 14 this article. All provisions of law regulating the rendering of profes- 15 sional services by a person elected or appointed to a public office 16 shall be applicable to a shareholder, director, officer and employee of 17 such corporation in the same manner and to the same extent as if fully 18 set forth herein. Such legal disqualification to practice his profession 19 within this state shall be deemed to constitute an irrevocable offer by 20 the disqualified shareholder to sell his shares to the corporation, 21 pursuant to the provisions of section 1510 of this article or of the 22 certificate of incorporation, by-laws or agreement among the corporation 23 and all shareholders, whichever is applicable. Compliance with the terms 24 of such offer shall be specifically enforceable in the courts of this 25 state. A professional service corporation's failure to enforce compli- 26 ance with this provision shall constitute a ground for forfeiture of its 27 certificate of incorporation and its dissolution. 28 § 6. Paragraph (a) of section 1511 of the business corporation law, as 29 amended by chapter 550 of the laws of 2011, is amended and a new para- 30 graph (c) is added to read as follows: 31 (a) No shareholder of a professional service corporation [or], includ- 32 ing a design professional service corporation, or any firm established 33 for the business purpose of incorporating as a professional service 34 corporation pursuant to paragraph (h) of section fifteen hundred three 35 of this article, may sell or transfer his shares in such corporation 36 except to another individual who is eligible to have shares issued to 37 him by such corporation or except in trust to another individual who 38 would be eligible to receive shares if he were employed by the corpo- 39 ration. Nothing herein contained shall be construed to prohibit the 40 transfer of shares by operation of law or by court decree. No transfer- 41 ee of shares by operation of law or court decree may vote the shares for 42 any purpose whatsoever except with respect to corporate action under 43 sections 909 and 1001 of this chapter. The restriction in the preceding 44 sentence shall not apply, however, where such transferee would be eligi- 45 ble to have shares issued to him if he were an employee of the corpo- 46 ration and, if there are other shareholders, a majority of such other 47 shareholders shall fail to redeem the shares so transferred, pursuant to 48 section 1510 of this article, within sixty days of receiving written 49 notice of such transfer. Any sale or transfer, except by operation of 50 law or court decree or except for a corporation having only one share- 51 holder, may be made only after the same shall have been approved by the 52 board of directors, or at a shareholders' meeting specially called for 53 such purpose by such proportion, not less than a majority, of the 54 outstanding shares as may be provided in the certificate of incorpo- 55 ration or in the by-laws of such professional service corporation. At 56 such shareholders' meeting the shares held by the shareholder proposingA. 3046 4 1 to sell or transfer his shares may not be voted or counted for any 2 purpose, unless all shareholders consent that such shares be voted or 3 counted. The certificate of incorporation or the by-laws of the profes- 4 sional service corporation, or the professional service corporation and 5 the shareholders by private agreement, may provide, in lieu of or in 6 addition to the foregoing provisions, for the alienation of shares and 7 may require the redemption or purchase of such shares by such corpo- 8 ration at prices and in a manner specifically set forth therein. The 9 existence of the restrictions on the sale or transfer of shares, as 10 contained in this article and, if applicable, in the certificate of 11 incorporation, by-laws, stock purchase or stock redemption agreement, 12 shall be noted conspicuously on the face or back of every certificate 13 for shares issued by a professional service corporation. Any sale or 14 transfer in violation of such restrictions shall be void. 15 (c) A firm established for the business purpose of incorporating as a 16 professional service corporation pursuant to paragraph (h) of section 17 fifteen hundred three of this article, shall purchase or redeem the 18 shares of a non-licensed professional shareholder in the case of his or 19 her termination of employment within thirty days after such termination. 20 A firm established for the business purpose of incorporating as a 21 professional service corporation pursuant to paragraph (h) of section 22 fifteen hundred three of this article, shall not be required to purchase 23 or redeem the shares of a terminated non-licensed professional share- 24 holder if such shares, within thirty days after such termination, are 25 sold or transferred to another employee of the corporation pursuant to 26 this article. 27 § 7. Paragraph (a) of section 1512 of the business corporation law, as 28 amended by chapter 550 of the laws of 2011, is amended to read as 29 follows: 30 (a) Notwithstanding any other provision of law, the name of a profes- 31 sional service corporation, including a design professional service 32 corporation and any firm established for the business purpose of incor- 33 porating as a professional service corporation pursuant to paragraph (h) 34 of section fifteen hundred three of this article, may contain any word 35 which, at the time of incorporation, could be used in the name of a 36 partnership practicing a profession which the corporation is authorized 37 to practice, and may not contain any word which could not be used by 38 such a partnership. Provided, however, the name of a professional 39 service corporation may not contain the name of a deceased person unless 40 (1) such person's name was part of the corporate name at the time of 41 such person's death; or 42 (2) such person's name was part of the name of an existing partnership 43 and at least two-thirds of such partnership's partners become sharehold- 44 ers of the corporation. 45 § 8. Section 1514 of the business corporation law is amended by adding 46 a new paragraph (c) to read as follows: 47 (c) Each firm established for the business purpose of incorporating as 48 a professional service corporation pursuant to paragraph (h) of section 49 fifteen hundred three of this article shall, at least once every three 50 years on or before the date prescribed by the licensing authority, 51 furnish a statement to the licensing authority listing the names and 52 residence addresses of each shareholder, director and officer of such 53 corporation and certify as the date of certification and at all times 54 over the entire three year period that: 55 (i) at least fifty-one percent of the outstanding shares of stock of 56 the corporation are and were owned by certified public accountants,A. 3046 5 1 (ii) at least fifty-one percent of the directors are and were certi- 2 fied public accountants, 3 (iii) at least fifty-one percent of the officers are and were certi- 4 fied public accountants, 5 (iv) the president, the chairperson of the board of directors and the 6 chief executive officer or officers are and were certified public 7 accountants. 8 The statement shall be signed by the president or any certified public 9 accountant vice-president and attested to by the secretary or any 10 assistant secretary of the corporation. 11 § 9. Paragraph (d) of section 1525 of the business corporation law, as 12 added by chapter 505 of the laws of 1983, is amended to read as follows: 13 (d) "Foreign professional service corporation" means a professional 14 service corporation, whether or not denominated as such, organized under 15 the laws of a jurisdiction other than this state, all of the sharehold- 16 ers, directors and officers of which are authorized and licensed to 17 practice the profession for which such corporation is licensed to do 18 business; except that all shareholders, directors and officers of a 19 foreign professional service corporation which provides health services 20 in this state shall be licensed in this state. Notwithstanding any other 21 provision of law a foreign professional service corporation formed to 22 lawfully engage in the practice of public accountancy, as such practice 23 is defined under article one hundred forty-nine of the education law, or 24 equivalent state law, shall be required to show (1) that a simple major- 25 ity of the ownership of the firm, in terms of financial interests, 26 including ownership-based compensation, and voting rights held by the 27 firm's owners, belongs to individuals licensed to practice public 28 accountancy in some state, and (2) that all shareholders of a foreign 29 professional service corporation whose principal place of business is in 30 this state, and who are engaged in the practice of public accountancy in 31 this state, hold a valid license issued under section seventy-four 32 hundred four of the education law or are public accountants licensed 33 under section seventy-four hundred five of the education law. Although 34 firms may include non-licensee owners, the firm and its owners must 35 comply with rules promulgated by the state board of regents. Notwith- 36 standing the foregoing, a firm registered under this section may not 37 have non-licensee owners if the firm's name includes the words "certi- 38 fied public accountant," or "certified public accountants," or the 39 abbreviations "CPA" or "CPAs." Each non-licensee owner of a firm that is 40 operating under this section shall be a natural person who actively 41 participates in the business of the firm or its affiliated entities, 42 provided each beneficial owner of an equity interest in such entity is a 43 natural person who actively participates in the business conducted by 44 the firm or its affiliated entities. For purposes of this subdivision, 45 "actively participate" means to provide services to clients or to other- 46 wise individually take part in the day-to-day business or management of 47 the firm. 48 § 10. Subdivision (q) of section 121-1500 of the partnership law, as 49 amended by chapter 475 of the laws of 2014, is amended to read as 50 follows: 51 (q) Each partner of a registered limited liability partnership formed 52 to provide medical services in this state must be licensed pursuant to 53 article 131 of the education law to practice medicine in this state and 54 each partner of a registered limited liability partnership formed to 55 provide dental services in this state must be licensed pursuant to arti- 56 cle 133 of the education law to practice dentistry in this state. EachA. 3046 6 1 partner of a registered limited liability partnership formed to provide 2 veterinary services in this state must be licensed pursuant to article 3 135 of the education law to practice veterinary medicine in this state. 4 Each partner of a registered limited liability partnership formed to 5 provide public accountancy services, whose principal place of business 6 is in this state and who provides public accountancy services, must be 7 licensed pursuant to article 149 of the education law to practice public 8 accountancy in this state. Each partner of a registered limited liabil- 9 ity partnership formed to provide professional engineering, land survey- 10 ing, geological services, architectural and/or landscape architectural 11 services in this state must be licensed pursuant to article 145, article 12 147 and/or article 148 of the education law to practice one or more of 13 such professions in this state. Each partner of a registered limited 14 liability partnership formed to provide licensed clinical social work 15 services in this state must be licensed pursuant to article 154 of the 16 education law to practice clinical social work in this state. Each part- 17 ner of a registered limited liability partnership formed to provide 18 creative arts therapy services in this state must be licensed pursuant 19 to article 163 of the education law to practice creative arts therapy in 20 this state. Each partner of a registered limited liability partnership 21 formed to provide marriage and family therapy services in this state 22 must be licensed pursuant to article 163 of the education law to prac- 23 tice marriage and family therapy in this state. Each partner of a regis- 24 tered limited liability partnership formed to provide mental health 25 counseling services in this state must be licensed pursuant to article 26 163 of the education law to practice mental health counseling in this 27 state. Each partner of a registered limited liability partnership formed 28 to provide psychoanalysis services in this state must be licensed pursu- 29 ant to article 163 of the education law to practice psychoanalysis in 30 this state. Each partner of a registered limited liability partnership 31 formed to provide applied behavior analysis service in this state must 32 be licensed or certified pursuant to article 167 of the education law to 33 practice applied behavior analysis in this state. Notwithstanding any 34 other provisions of law a limited liability partnership formed to 35 lawfully engage in the practice of public accountancy, as such practice 36 is respectively defined under article 149 of the education law, shall be 37 required to show (1) that a simple majority of the ownership of the 38 firm, in terms of financial interests, including ownership-based compen- 39 sation, and voting rights held by the firm's owners, belongs to individ- 40 uals licensed to practice public accountancy in some state, and (2) that 41 all partners of a limited liability partnership whose principal place of 42 business is in this state, and who are engaged in the practice of public 43 accountancy in this state, hold a valid license issued under section 44 7404 of the education law or are public accountants licensed under 45 section 7405 of the education law. Although firms may include non-licen- 46 see owners, the firm and its owners must comply with rules promulgated 47 by the state board of regents. Notwithstanding the foregoing, a firm 48 registered under this section may not have non-licensee owners if the 49 firm's name includes the words "certified public accountant," or "certi- 50 fied public accounts," or the abbreviations "CPA" or "CPAs." Each non- 51 licensee owner of a firm that is incorporated under this section shall 52 be (1) a natural person who actively participates in the business of the 53 firm or its affiliated entities, or (2) an entity, including, but not 54 limited to, a partnership or professional corporation, provided each 55 beneficial owner of an equity interest in such entity is a natural 56 person who actively participates in the business conducted by the firmA. 3046 7 1 or its affiliated entities. For purposes of this subdivision, "actively 2 participate" means to provide services to clients or to otherwise indi- 3 vidually take part in the day-to-day business or management of the firm. 4 § 11. Subdivision (q) of section 121-1502 of the partnership law, as 5 amended by chapter 475 of the laws of 2014, is amended to read as 6 follows: 7 (q) Each partner of a foreign limited liability partnership which 8 provides medical services in this state must be licensed pursuant to 9 article 131 of the education law to practice medicine in the state and 10 each partner of a foreign limited liability partnership which provides 11 dental services in the state must be licensed pursuant to article 133 of 12 the education law to practice dentistry in this state. Each partner of a 13 foreign limited liability partnership which provides veterinary service 14 in the state shall be licensed pursuant to article 135 of the education 15 law to practice veterinary medicine in this state. Each partner of a 16 foreign limited liability partnership which provides professional engi- 17 neering, land surveying, geological services, architectural and/or land- 18 scape architectural services in this state must be licensed pursuant to 19 article 145, article 147 and/or article 148 of the education law to 20 practice one or more of such professions. Each partner of a foreign 21 registered limited liability partnership formed to provide public 22 accountancy services, whose principal place of business is in this state 23 and who provides public accountancy services, must be licensed pursuant 24 to article 149 of the education law to practice public accountancy in 25 this state. Each partner of a foreign limited liability partnership 26 which provides licensed clinical social work services in this state must 27 be licensed pursuant to article 154 of the education law to practice 28 licensed clinical social work in this state. Each partner of a foreign 29 limited liability partnership which provides creative arts therapy 30 services in this state must be licensed pursuant to article 163 of the 31 education law to practice creative arts therapy in this state. Each 32 partner of a foreign limited liability partnership which provides 33 marriage and family therapy services in this state must be licensed 34 pursuant to article 163 of the education law to practice marriage and 35 family therapy in this state. Each partner of a foreign limited liabil- 36 ity partnership which provides mental health counseling services in this 37 state must be licensed pursuant to article 163 of the education law to 38 practice mental health counseling in this state. Each partner of a 39 foreign limited liability partnership which provides psychoanalysis 40 services in this state must be licensed pursuant to article 163 of the 41 education law to practice psychoanalysis in this state. Each partner of 42 a foreign limited liability partnership which provides applied behavior 43 analysis services in this state must be licensed or certified pursuant 44 to article 167 of the education law to practice applied behavior analy- 45 sis in this state. Notwithstanding any other provisions of law a 46 foreign limited liability partnership formed to lawfully engage in the 47 practice of public accountancy, as such practice is respectively defined 48 under article 149 of the education law, shall be required to show (1) 49 that a simple majority of the ownership of the firm, in terms of finan- 50 cial interests, including ownership-based compensation, and voting 51 rights held by the firm's owners, belongs to individuals licensed to 52 practice public accountancy in some state, and (2) that all partners of 53 a foreign limited liability partnership whose principal place of busi- 54 ness is in this state, and who are engaged in the practice of public 55 accountancy in this state, hold a valid licence issued under section 56 7404 of the education law or are public accountants licensed underA. 3046 8 1 section 7405 of the education law. Although firms may include non-licen- 2 see owners, the firm and its owners must comply with rules promulgated 3 by the state board of regents. Notwithstanding the foregoing, a firm 4 registered under this section may not have non-licensee owners if the 5 firm's name includes the words "certified public accountant," or "certi- 6 fied public accountants," or the abbreviations "CPA" or "CPAs." Each 7 non-licensee owner of a firm that is incorporated under this section 8 shall be (1) a natural person who actively participates in the business 9 of the firm or its affiliated entities, or (2) an entity, including, but 10 not limited to, a partnership or professional corporation, provided each 11 beneficial owner of an equity interest in such entity is a natural 12 person who actively participates in the business conducted by the firm 13 or its affiliated entities. For purposes of this subdivision, "actively 14 participate" means to provide services to clients or to otherwise indi- 15 vidually take part in the day-to-day business or management of the firm. 16 § 12. Subdivision (h) of section 121-101 of the partnership law, as 17 added by chapter 950 of the laws of 1990, is amended to read as follows: 18 (h) "Limited partnership" and "domestic limited partnership" mean, 19 unless the context otherwise requires, a partnership (i) formed by two 20 or more persons pursuant to this article or which complies with subdivi- 21 sion (a) of section 121-1202 of this article and (ii) having one or more 22 general partners and one or more limited partners. Notwithstanding any 23 other provisions of law a limited partnership or domestic limited part- 24 nership formed to lawfully engage in the practice of public accountancy, 25 as such practice is respectively defined under article 149 of the educa- 26 tion law shall be required to show (1) that a simple majority of the 27 ownership of the firm, in terms of financial interests, including owner- 28 ship-based compensation, and voting rights held by the firm's owners, 29 belongs to individuals licensed to practice public accountancy in some 30 state, and (2) that all partners of a limited partnership or domestic 31 limited partnership, whose principal place of business is in this state, 32 and who are engaged in the practice of public accountancy in this state, 33 hold a valid license issued under section 7404 of the education law or 34 are public accountants licensed under section 7405 of the education law. 35 Although firms may include non-licensee owners, the firm and its owners 36 must comply with rules promulgated by the state board of regents. 37 Notwithstanding the foregoing, a firm registered under this section may 38 not have non-licensee owners if the firm's name includes the words 39 "certified public accountant," or "certified public accountants," or the 40 abbreviations "CPA" or "CPAs." Each non-licensee owner of a firm that is 41 registered under this section shall be (1) a natural person who actively 42 participates in the business of the firm or its affiliated entities, or 43 (2) an entity, including, but not limited to, a partnership or profes- 44 sional corporation, provided each beneficial owner of an equity interest 45 in such entity is a natural person who actively participates in the 46 business conducted by the firm or its affiliated entities. For purposes 47 of this subdivision, "actively participate" means to provide services to 48 clients or to otherwise individually take part in the day-to-day busi- 49 ness or management of the firm. 50 § 13. Subdivision (b) of section 1207 of the limited liability company 51 law, as amended by chapter 475 of the laws of 2014, is amended to read 52 as follows: 53 (b) With respect to a professional service limited liability company 54 formed to provide medical services as such services are defined in arti- 55 cle 131 of the education law, each member of such limited liability 56 company must be licensed pursuant to article 131 of the education law toA. 3046 9 1 practice medicine in this state. With respect to a professional service 2 limited liability company formed to provide dental services as such 3 services are defined in article 133 of the education law, each member of 4 such limited liability company must be licensed pursuant to article 133 5 of the education law to practice dentistry in this state. With respect 6 to a professional service limited liability company formed to provide 7 veterinary services as such services are defined in article 135 of the 8 education law, each member of such limited liability company must be 9 licensed pursuant to article 135 of the education law to practice veter- 10 inary medicine in this state. With respect to a professional service 11 limited liability company formed to provide professional engineering, 12 land surveying, architectural, landscape architectural and/or geological 13 services as such services are defined in article 145, article 147 and 14 article 148 of the education law, each member of such limited liability 15 company must be licensed pursuant to article 145, article 147 and/or 16 article 148 of the education law to practice one or more of such 17 professions in this state. With respect to a professional service 18 limited liability company formed to provide public accountancy services 19 as such services are defined in article 149 of the education law each 20 member of such limited liability company whose principal place of busi- 21 ness is in this state and who provides public accountancy services, must 22 be licensed pursuant to article 149 of the education law to practice 23 public accountancy in this state. With respect to a professional service 24 limited liability company formed to provide licensed clinical social 25 work services as such services are defined in article 154 of the educa- 26 tion law, each member of such limited liability company shall be 27 licensed pursuant to article 154 of the education law to practice 28 licensed clinical social work in this state. With respect to a profes- 29 sional service limited liability company formed to provide creative arts 30 therapy services as such services are defined in article 163 of the 31 education law, each member of such limited liability company must be 32 licensed pursuant to article 163 of the education law to practice crea- 33 tive arts therapy in this state. With respect to a professional service 34 limited liability company formed to provide marriage and family therapy 35 services as such services are defined in article 163 of the education 36 law, each member of such limited liability company must be licensed 37 pursuant to article 163 of the education law to practice marriage and 38 family therapy in this state. With respect to a professional service 39 limited liability company formed to provide mental health counseling 40 services as such services are defined in article 163 of the education 41 law, each member of such limited liability company must be licensed 42 pursuant to article 163 of the education law to practice mental health 43 counseling in this state. With respect to a professional service limited 44 liability company formed to provide psychoanalysis services as such 45 services are defined in article 163 of the education law, each member of 46 such limited liability company must be licensed pursuant to article 163 47 of the education law to practice psychoanalysis in this state. With 48 respect to a professional service limited liability company formed to 49 provide applied behavior analysis services as such services are defined 50 in article 167 of the education law, each member of such limited liabil- 51 ity company must be licensed or certified pursuant to article 167 of the 52 education law to practice applied behavior analysis in this state. 53 Notwithstanding any other provisions of law a professional service 54 limited liability company formed to lawfully engage in the practice of 55 public accountancy, as such practice is respectively defined under arti- 56 cle 149 of the education law shall be required to show (1) that a simpleA. 3046 10 1 majority of the ownership of the firm, in terms of financial interests, 2 including ownership-based compensation, and voting rights held by the 3 firm's owners, belongs to individuals licensed to practice public 4 accountancy in some state, and (2) that all members of a limited profes- 5 sional service limited liability company, whose principal place of busi- 6 ness is in this state, and who are engaged in the practice of public 7 accountancy in this state, hold a valid license issued under section 8 7404 of the education law or are public accountants licensed under 9 section 7405 of the education law. Although firms may include non-licen- 10 see owners, the firm and its owners must comply with rules promulgated 11 by the state board of regents. Notwithstanding the foregoing, a firm 12 registered under this section may not have non-licensee owners if the 13 firm's name includes the words "certified public accountant," or "certi- 14 fied public accountants," or the abbreviations "CPA" or "CPAs." Each 15 non-licensee owner of a firm that is registered under this section shall 16 be (1) a natural person who actively participates in the business of the 17 firm or its affiliated entities, or (2) an entity, including, but not 18 limited to, a partnership or professional corporation, provided each 19 beneficial owner of an equity interest in such entity is a natural 20 person who actively participates in the business conducted by the firm 21 or its affiliated entities. For purposes of this subdivision, "actively 22 participate" means to provide services to clients or to otherwise indi- 23 vidually take part in the day-to-day business or management of the firm. 24 § 14. Subdivision (a) of section 1301 of the limited liability company 25 law, as amended by chapter 475 of the laws of 2014, is amended to read 26 as follows: 27 (a) "Foreign professional service limited liability company" means a 28 professional service limited liability company, whether or not denomi- 29 nated as such, organized under the laws of a jurisdiction other than 30 this state, (i) each of whose members and managers, if any, is a profes- 31 sional authorized by law to render a professional service within this 32 state and who is or has been engaged in the practice of such profession 33 in such professional service limited liability company or a predecessor 34 entity, or will engage in the practice of such profession in the profes- 35 sional service limited liability company within thirty days of the date 36 such professional becomes a member, or each of whose members and manag- 37 ers, if any, is a professional at least one of such members is author- 38 ized by law to render a professional service within this state and who 39 is or has been engaged in the practice of such profession in such 40 professional service limited liability company or a predecessor entity, 41 or will engage in the practice of such profession in the professional 42 service limited liability company within thirty days of the date such 43 professional becomes a member, or (ii) authorized by, or holding a 44 license, certificate, registration or permit issued by the licensing 45 authority pursuant to, the education law to render a professional 46 service within this state; except that all members and managers, if any, 47 of a foreign professional service limited liability company that 48 provides health services in this state shall be licensed in this state. 49 With respect to a foreign professional service limited liability company 50 which provides veterinary services as such services are defined in arti- 51 cle 135 of the education law, each member of such foreign professional 52 service limited liability company shall be licensed pursuant to article 53 135 of the education law to practice veterinary medicine. With respect 54 to a foreign professional service limited liability company which 55 provides medical services as such services are defined in article 131 of 56 the education law, each member of such foreign professional serviceA. 3046 11 1 limited liability company must be licensed pursuant to article 131 of 2 the education law to practice medicine in this state. With respect to a 3 foreign professional service limited liability company which provides 4 dental services as such services are defined in article 133 of the 5 education law, each member of such foreign professional service limited 6 liability company must be licensed pursuant to article 133 of the educa- 7 tion law to practice dentistry in this state. With respect to a foreign 8 professional service limited liability company which provides profes- 9 sional engineering, land surveying, geologic, architectural and/or land- 10 scape architectural services as such services are defined in article 11 145, article 147 and article 148 of the education law, each member of 12 such foreign professional service limited liability company must be 13 licensed pursuant to article 145, article 147 and/or article 148 of the 14 education law to practice one or more of such professions in this state. 15 With respect to a foreign professional service limited liability company 16 which provides public accountancy services as such services are defined 17 in article 149 of the education law, each member of such foreign profes- 18 sional service limited liability company whose principal place of busi- 19 ness is in this state and who provides public accountancy services, 20 shall be licensed pursuant to article 149 of the education law to prac- 21 tice public accountancy in this state. With respect to a foreign profes- 22 sional service limited liability company which provides licensed clin- 23 ical social work services as such services are defined in article 154 of 24 the education law, each member of such foreign professional service 25 limited liability company shall be licensed pursuant to article 154 of 26 the education law to practice clinical social work in this state. With 27 respect to a foreign professional service limited liability company 28 which provides creative arts therapy services as such services are 29 defined in article 163 of the education law, each member of such foreign 30 professional service limited liability company must be licensed pursuant 31 to article 163 of the education law to practice creative arts therapy in 32 this state. With respect to a foreign professional service limited 33 liability company which provides marriage and family therapy services as 34 such services are defined in article 163 of the education law, each 35 member of such foreign professional service limited liability company 36 must be licensed pursuant to article 163 of the education law to prac- 37 tice marriage and family therapy in this state. With respect to a 38 foreign professional service limited liability company which provides 39 mental health counseling services as such services are defined in arti- 40 cle 163 of the education law, each member of such foreign professional 41 service limited liability company must be licensed pursuant to article 42 163 of the education law to practice mental health counseling in this 43 state. With respect to a foreign professional service limited liability 44 company which provides psychoanalysis services as such services are 45 defined in article 163 of the education law, each member of such foreign 46 professional service limited liability company must be licensed pursuant 47 to article 163 of the education law to practice psychoanalysis in this 48 state. With respect to a foreign professional service limited liability 49 company which provides applied behavior analysis services as such 50 services are defined in article 167 of the education law, each member of 51 such foreign professional service limited liability company must be 52 licensed or certified pursuant to article 167 of the education law to 53 practice applied behavior analysis in this state. Notwithstanding any 54 other provisions of law a foreign professional service limited liability 55 company formed to lawfully engage in the practice of public accountancy, 56 as such practice is respectively defined under article 149 of the educa-A. 3046 12 1 tion law shall be required to show (1) that a simple majority of the 2 ownership of the firm, in terms of financial interests, including owner- 3 ship-based compensation, and voting rights held by the firm's owners, 4 belongs to individuals licensed to practice public accountancy in some 5 state, and (2) that all members of a foreign limited professional 6 service limited liability company, whose principal place of business is 7 in this state, and who are engaged in the practice of public accountancy 8 in this state, hold a valid license issued under section 7404 of the 9 education law or are public accountants licensed under section 7405 of 10 the education law, Although firms may include non-licensee owners, the 11 firm and its owners must comply with rules promulgated by the state 12 board of regents. Notwithstanding the foregoing, a firm registered 13 under this section may not have non-licensee owners if the firm's name 14 includes the words "certified public accountant," or "certified public 15 accountants," or the abbreviations "CPA" or "CPAs." Each non-licensee 16 owner of a firm that is registered under this section shall be (1) a 17 natural person who actively participates in the business of the firm or 18 its affiliated entities, or (2) an entity, including, but not limited 19 to, a partnership or professional corporation, provided each beneficial 20 owner of an equity interest in such entity is a natural person who 21 actively participates in the business conducted by the firm or its 22 affiliated entities. For purposes of this subdivision, "actively partic- 23 ipate" means to provide services to clients or to otherwise individually 24 take part in the day-to-day business or management of the firm. 25 § 15. This act shall take effect immediately.
