S T A T E O F N E W Y O R K
________________________________________________________________________
2898
2013-2014 Regular Sessions
I N S E N A T E
January 24, 2013
___________
Introduced by Sen. LAVALLE -- read twice and ordered printed, and when
printed to be committed to the Committee on Corporations, Authorities
and Commissions
AN ACT to amend the business corporation law, in relation to design
professional service corporations
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 1501 of the business corporation law, as amended by
chapter 550 of the laws of 2011, is amended to read as follows:
[S 1501. Definitions.
As used in this article, unless the context otherwise requires, the
term: (a) "licensing authority" means the regents of the university of
the state of New York or the state education department, as the case may
be, in the case of all professions licensed under title eight of the
education law, and the appropriate appellate division of the supreme
court in the case of the profession of law.
(b) "Profession" includes any practice as an attorney and counselor-
at-law, or as a licensed physician, and those occupations designated in
title eight of the education law.
(c) "Professional service" means any type of service to the public
which may be lawfully rendered by a member of a profession within the
purview of his profession.
(d) "Professional service corporation" means a corporation organized
under this article.
(e) "Design professional service corporation" means a corporation
organized under this article practicing professional engineering, archi-
tecture, landscape architecture, or land surveying, or practicing any
combination of such professions, first organized on or after January
first, two thousand twelve. The provisions of this article applicable to
professional service corporations shall apply to design professional
service corporations except to the extent that any provision is either
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD04914-01-3
S. 2898 2
inconsistent with a provision expressly applying to design professional
service corporations or not relevant thereto.
(f) "Design professional" means an individual licensed and registered
pursuant to title eight of the education law to practice professional
engineering, architecture, landscape architecture or land surveying.
(g) "Employee stock ownership plan" (ESOP) means a defined contrib-
ution plan established pursuant to Section 4975(e)(7) of the Internal
Revenue Code.
(h) "Officer" does not include the secretary or an assistant secretary
of a corporation having only one shareholder.]
S 2. Section 1501 of the business corporation law, as amended by chap-
ter 564 of the laws of 2011, is amended to read as follows:
S 1501. Definitions.
As used in this article, unless the context otherwise requires, the
term: (a) "licensing authority" means the regents of the university of
the state of New York or the state education department, as the case may
be, in the case of all professions licensed under title eight of the
education law, and the appropriate appellate division of the supreme
court in the case of the profession of law.
(b) "Profession" includes any practice as an attorney and counselor-
at-law, or as a licensed physician, and those occupations designated in
title eight of the education law.
(c) "Professional service" means any type of service to the public
which may be lawfully rendered by a member of a profession within the
purview of his or her profession.
(d) "Professional service corporation" means a corporation organized
under this article.
(e) "Officer" does not include the secretary or an assistant secretary
of a corporation having only one shareholder.
(f) "Other business entity" means any person other than a natural
person, general partnership or a domestic or foreign business corpo-
ration, and includes a professional service limited liability company
formed pursuant to the provisions of the New York limited liability
company law.
(G) "DESIGN PROFESSIONAL SERVICE CORPORATION" MEANS A CORPORATION
ORGANIZED UNDER THIS ARTICLE PRACTICING PROFESSIONAL ENGINEERING, ARCHI-
TECTURE, LANDSCAPE ARCHITECTURE, OR LAND SURVEYING, OR PRACTICING ANY
COMBINATION OF SUCH PROFESSIONS. THE PROVISIONS OF THIS ARTICLE APPLICA-
BLE TO PROFESSIONAL SERVICE CORPORATIONS SHALL APPLY TO DESIGN PROFES-
SIONAL SERVICE CORPORATIONS EXCEPT TO THE EXTENT THAT ANY PROVISION IS
EITHER INCONSISTENT WITH A PROVISION EXPRESSLY APPLYING TO DESIGN
PROFESSIONAL SERVICE CORPORATIONS OR NOT RELEVANT THERETO.
(H) "DESIGN PROFESSIONAL" MEANS AN INDIVIDUAL LICENSED AND REGISTERED
PURSUANT TO TITLE EIGHT OF THE EDUCATION LAW TO PRACTICE PROFESSIONAL
ENGINEERING, ARCHITECTURE, LANDSCAPE ARCHITECTURE OR LAND SURVEYING.
(I) "EMPLOYEE STOCK OWNERSHIP PLAN" (ESOP) MEANS A DEFINED CONTRIB-
UTION PLAN ESTABLISHED PURSUANT TO SECTION 4975(E)(7) OF THE INTERNAL
REVENUE CODE.
S 3. Paragraph (b-5) of section 1503 of the business corporation law,
as added by chapter 467 of the laws of 2012, is amended to read as
follows:
(b-5) On or after January first, two thousand twelve, the state educa-
tion department and the department of state shall allow an existing
professional service corporation [in good standing] ORGANIZED UNDER THIS
ARTICLE AND PRACTICING PROFESSIONAL ENGINEERING, ARCHITECTURE, LANDSCAPE
ARCHITECTURE, OR LAND SURVEYING, OR PRACTICING ANY COMBINATION OF SUCH
S. 2898 3
PROFESSIONS to [convert to] BECOME a design professional service corpo-
ration as defined in this article, provided the [design] professional
service corporation meets all of the requirements to become a design
professional service corporation, including that its name shall end with
the words "design professional corporation" or the abbreviation
"D.P.C.", BY AMENDING ITS CERTIFICATE OF INCORPORATION SO THAT IT
CONTAINS THE FOLLOWING STATEMENTS:
(1) THE NAMES AND RESIDENCE ADDRESSES OF ALL INDIVIDUALS OR ESOPS WHO
WILL BE THE SHAREHOLDERS, DIRECTORS AND OFFICERS OF THE ORIGINAL DESIGN
PROFESSIONAL SERVICE CORPORATION; AND
(2) THE PROFESSION OR PROFESSIONS OF EACH SHAREHOLDER, DIRECTOR AND
OFFICER WHO IS A DESIGN PROFESSIONAL OF THE ORIGINAL DESIGN PROFESSIONAL
SERVICE CORPORATION; AND
(3) THE OWNERSHIP INTEREST OF EACH SHAREHOLDER OF THE ORIGINAL DESIGN
PROFESSIONAL SERVICE CORPORATION; AND
(4) THE NAMES OF THE OFFICERS AND DIRECTORS WHO WILL BE THE PRESIDENT,
THE CHAIRPERSON OF THE BOARD OF DIRECTORS AND THE CHIEF EXECUTIVE OFFI-
CER OR OFFICERS OF THE ORIGINAL DESIGN PROFESSIONAL SERVICE CORPORATION.
(I) THE CERTIFICATE OF AMENDMENT SHALL HAVE ATTACHED THERETO A CERTIF-
ICATE OR CERTIFICATES ISSUED BY THE LICENSING AUTHORITY CERTIFYING THAT
EACH OF THE PROPOSED SHAREHOLDERS, DIRECTORS AND OFFICERS WHO IS LISTED
AS A DESIGN PROFESSIONAL IS AUTHORIZED BY LAW TO PRACTICE A PROFESSION
WHICH THE CORPORATION IS ORGANIZED TO PRACTICE AND, IF APPLICABLE, THAT
ONE OR MORE OF SUCH INDIVIDUALS IS AUTHORIZED TO PRACTICE EACH PROFES-
SION WHICH THE CORPORATION WILL BE AUTHORIZED TO PRACTICE. THE ATTACHED
CERTIFICATE OR CERTIFICATES SHALL ALSO CERTIFY THAT THE PROPOSED PRESI-
DENT, THE CHAIRPERSON OF THE BOARD OF DIRECTORS AND THE CHIEF EXECUTIVE
OFFICER OR OFFICERS ARE AUTHORIZED BY LAW TO PRACTICE A PROFESSION WHICH
THE CORPORATION IS ORGANIZED TO PRACTICE.
(II) THE CERTIFICATE OF AMENDMENT SHALL ALSO HAVE ATTACHED THERETO A
CERTIFICATE OR CERTIFICATES ISSUED BY THE LICENSING AUTHORITY CERTIFYING
THAT EACH OF THE PROPOSED SHAREHOLDERS, OFFICERS, DIRECTORS AND OWNERS
LISTED HAVE BEEN DEEMED TO HAVE BEEN OF GOOD MORAL CHARACTER AS MAY BE
ESTABLISHED BY THE REGULATIONS OF THE COMMISSIONER OF EDUCATION.
(III) THE CERTIFICATE OF AMENDMENT SHALL ALSO HAVE ATTACHED THERETO:
(A) A TAX CLEARANCE ISSUED BY THE DEPARTMENT OF TAXATION AND FINANCE
CERTIFYING THAT THE EXISTING PROFESSIONAL SERVICE CORPORATION IS CURRENT
WITH RESPECT TO PAYMENT OF ITS STATE TAX LIABILITIES AND (B) A CERTIF-
ICATE OF GOOD STANDING FROM THE STATE EDUCATION DEPARTMENT CERTIFYING
THAT THE EXISTING PROFESSIONAL SERVICE CORPORATION IS AUTHORIZED TO
PROVIDE PROFESSIONAL SERVICES WITHOUT RESTRICTION.
S 4. This act shall take effect immediately and shall be deemed to
have been in full force and effect on and after October 3, 2012.