S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4221
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             February 3, 2021
                                ___________
 
 Introduced  by  Sens.  STAVISKY,  ADDABBO,  COMRIE,  GOUNARDES, HOYLMAN,
   KAMINSKY, KENNEDY, MAYER, RAMOS, SALAZAR, SEPULVEDA -- read twice  and
   ordered  printed, and when printed to be committed to the Committee on
   Higher Education
 
 AN ACT to amend 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:
 
   Section  1. Section 1503 of the business corporation law is amended by
 adding a new paragraph (h) to read as follows:
   (H) ANY FIRM ESTABLISHED FOR THE BUSINESS PURPOSE OF INCORPORATING  AS
 A  PROFESSIONAL  SERVICE  CORPORATION  FORMED  TO LAWFULLY ENGAGE IN THE
 PRACTICE OF PUBLIC ACCOUNTANCY, AS SUCH PRACTICE IS RESPECTIVELY DEFINED
 UNDER ARTICLE ONE HUNDRED FORTY-NINE  OF  THE  EDUCATION  LAW  SHALL  BE
 REQUIRED  TO  SHOW  (1)  THAT  A SIMPLE MAJORITY OF THE OWNERSHIP OF THE
 FIRM, IN TERMS OF FINANCIAL INTERESTS, AND VOTING  RIGHTS  HELD  BY  THE
 FIRM'S  OWNERS,  BELONGS  TO  INDIVIDUALS  LICENSED  TO  PRACTICE PUBLIC
 ACCOUNTANCY IN SOME STATE, AND (2) THAT ALL SHAREHOLDERS  OF  A  PROFES-
 SIONAL  SERVICE CORPORATION WHOSE PRINCIPAL PLACE OF BUSINESS IS IN THIS
 STATE, AND WHO ARE ENGAGED IN THE PRACTICE OF PUBLIC ACCOUNTANCY IN THIS
 STATE, HOLD A VALID LICENSE ISSUED UNDER  SECTION  SEVENTY-FOUR  HUNDRED
 FOUR  OF  THE  EDUCATION LAW. FOR PURPOSES OF THIS PARAGRAPH, "FINANCIAL
 INTEREST" MEANS CAPITAL STOCK, CAPITAL ACCOUNTS, CAPITAL  CONTRIBUTIONS,
 CAPITAL  INTEREST,  OR  INTEREST IN UNDISTRIBUTED EARNINGS OF A BUSINESS
 ENTITY.  ALTHOUGH FIRMS MAY INCLUDE NON-LICENSEE OWNERS,  THE  FIRM  AND
 ITS  OWNERS  MUST  COMPLY  WITH  RULES PROMULGATED BY THE STATE BOARD OF
 REGENTS.  NOTWITHSTANDING THE FOREGOING, A FIRM INCORPORATED UNDER  THIS
 SECTION MAY NOT HAVE NON-LICENSEE OWNERS IF THE FIRM'S NAME INCLUDES THE
 WORDS  "CERTIFIED PUBLIC ACCOUNTANT," OR "CERTIFIED PUBLIC ACCOUNTANTS,"
 OR THE ABBREVIATIONS "CPA" OR "CPAS".  EACH NON-LICENSEE OWNER OF A FIRM
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD02385-01-1

 S. 4221                             2
 
 THAT IS INCORPORATED UNDER THIS SECTION SHALL BE A  NATURAL  PERSON  WHO
 ACTIVELY  PARTICIPATES  IN  THE  BUSINESS  OF THE FIRM OR ITS AFFILIATED
 ENTITIES. FOR PURPOSES OF THIS SUBDIVISION, "ACTIVELY PARTICIPATE" MEANS
 TO PROVIDE SERVICES TO CLIENTS OR TO OTHERWISE INDIVIDUALLY TAKE PART IN
 THE  DAY-TO-DAY  BUSINESS  OR  MANAGEMENT OF THE FIRM. SUCH A FIRM SHALL
 HAVE ATTACHED TO ITS  CERTIFICATE  OF  INCORPORATION  A  CERTIFICATE  OR
 CERTIFICATES DEMONSTRATING THE FIRM'S COMPLIANCE WITH THIS PARAGRAPH, IN
 LIEU OF THE CERTIFICATE OR CERTIFICATES REQUIRED BY SUBPARAGRAPH (II) OF
 PARAGRAPH (B) OF THIS SECTION.
   § 2. Section 1507 of the business corporation law is amended by adding
 a new paragraph (c) to read as follows:
   (C)  ANY FIRM ESTABLISHED FOR THE BUSINESS PURPOSE OF INCORPORATING AS
 A PROFESSIONAL SERVICE CORPORATION PURSUANT TO PARAGRAPH (H) OF  SECTION
 FIFTEEN  HUNDRED  THREE  OF THIS ARTICLE MAY ISSUE SHARES TO INDIVIDUALS
 WHO ARE AUTHORIZED BY LAW TO PRACTICE IN THIS STATE THE PROFESSION WHICH
 SUCH CORPORATION IS AUTHORIZED TO PRACTICE AND  WHO  ARE  OR  HAVE  BEEN
 ENGAGED  IN  THE  PRACTICE  OF  SUCH PROFESSION IN SUCH CORPORATION OR A
 PREDECESSOR ENTITY, OR WHO WILL ENGAGE IN THE PRACTICE OF  SUCH  PROFES-
 SION  IN SUCH CORPORATION WITHIN THIRTY DAYS OF THE DATE SUCH SHARES ARE
 ISSUED AND MAY ALSO ISSUE SHARES TO EMPLOYEES  OF  THE  CORPORATION  NOT
 LICENSED AS CERTIFIED PUBLIC ACCOUNTANTS, PROVIDED THAT:
   (I)  AT  LEAST FIFTY-ONE PERCENT OF THE OUTSTANDING SHARES OF STOCK OF
 THE CORPORATION ARE OWNED BY CERTIFIED PUBLIC ACCOUNTANTS,
   (II) AT LEAST FIFTY-ONE PERCENT OF THE DIRECTORS ARE CERTIFIED  PUBLIC
 ACCOUNTANTS,
   (III)  AT LEAST FIFTY-ONE PERCENT OF THE OFFICERS ARE CERTIFIED PUBLIC
 ACCOUNTANTS,
   (IV) THE PRESIDENT, THE CHAIRPERSON OF THE BOARD OF DIRECTORS AND  THE
 CHIEF  EXECUTIVE  OFFICER  OR OFFICERS ARE CERTIFIED PUBLIC ACCOUNTANTS.
 NO SHAREHOLDER OF A FIRM ESTABLISHED FOR THE BUSINESS PURPOSE OF  INCOR-
 PORATING AS A PROFESSIONAL SERVICE CORPORATION PURSUANT TO PARAGRAPH (H)
 OF  SECTION  FIFTEEN  HUNDRED  THREE  OF THIS ARTICLE SHALL ENTER INTO A
 VOTING TRUST AGREEMENT, PROXY OR ANY OTHER TYPE OF AGREEMENT VESTING  IN
 ANOTHER  PERSON, OTHER THAN ANOTHER SHAREHOLDER OF THE SAME CORPORATION,
 THE AUTHORITY TO EXERCISE VOTING POWER OF ANY  OR  ALL  OF  HIS  OR  HER
 SHARES.  ALL  SHARES  ISSUED,  AGREEMENTS  MADE  OR  PROXIES  GRANTED IN
 VIOLATION OF THIS SECTION SHALL BE VOID.
   § 3. Section 1508 of the business corporation law is amended by adding
 a new paragraph (c) to read as follows:
   (C) THE DIRECTORS AND OFFICERS OF ANY FIRM ESTABLISHED FOR  THE  BUSI-
 NESS  PURPOSE  OF  INCORPORATING  AS  A PROFESSIONAL SERVICE CORPORATION
 PURSUANT TO PARAGRAPH (H) OF SECTION FIFTEEN HUNDRED THREE OF THIS ARTI-
 CLE MAY INCLUDE INDIVIDUALS WHO ARE  NOT  LICENSED  TO  PRACTICE  PUBLIC
 ACCOUNTANCY,  PROVIDED  HOWEVER  THAT  AT LEAST FIFTY-ONE PERCENT OF THE
 DIRECTORS, AT LEAST FIFTY-ONE PERCENT OF THE OFFICERS AND THE PRESIDENT,
 THE CHAIRPERSON OF THE BOARD OF DIRECTORS AND THE CHIEF EXECUTIVE  OFFI-
 CER  OR  OFFICERS  ARE  AUTHORIZED  BY  LAW TO PRACTICE IN ANY STATE THE
 PROFESSION WHICH SUCH CORPORATION IS AUTHORIZED  TO  PRACTICE,  AND  ARE
 EITHER  SHAREHOLDERS  OF  SUCH CORPORATION OR ENGAGED IN THE PRACTICE OF
 THEIR PROFESSIONS IN SUCH CORPORATION.
   § 4. Section 1509 of the business corporation law, as amended by chap-
 ter 550 of the laws of 2011, is amended to read as follows:
 § 1509. Disqualification  of  shareholders,  directors,   officers   and
           employees.
   If  any  shareholder,  director, officer or employee of a professional
 service corporation, including  a  design  professional  service  corpo-

 S. 4221                             3

 ration,  who  has  been  rendering  professional  service  to the public
 becomes legally disqualified to practice his OR  HER  profession  within
 this  state,  he  OR  SHE shall sever all employment with, and financial
 interests  (other  than  interests  as  a creditor) in, such corporation
 forthwith or as otherwise provided in section 1510 of this article.  All
 provisions of law regulating the rendering of professional services by a
 person  elected or appointed to a public office shall be applicable to a
 shareholder, director, officer and employee of such corporation  in  the
 same  manner  and  to the same extent as if fully set forth herein. Such
 legal disqualification to practice his OR  HER  profession  within  this
 state shall be deemed to constitute an irrevocable offer by the disqual-
 ified shareholder to sell his OR HER shares to the corporation, pursuant
 to  the provisions of section 1510 of this article or of the certificate
 of incorporation, by-laws or agreement among  the  corporation  and  all
 shareholders, whichever is applicable. Compliance with the terms of such
 offer  shall  be specifically enforceable in the courts of this state. A
 professional service corporation's failure to  enforce  compliance  with
 this  provision  shall constitute a ground for forfeiture of its certif-
 icate of incorporation and its dissolution.
   § 5. Paragraph (a) of section 1511 of the business corporation law, as
 amended by chapter 550 of the laws of 2011, is amended and a  new  para-
 graph (c) is added to read as follows:
   (a) No shareholder of a professional service corporation [or], INCLUD-
 ING  a design professional service corporation, may sell or transfer his
 OR HER shares in such corporation except to another  individual  who  is
 eligible  to  have  shares  issued  to him OR HER by such corporation or
 except in trust to another individual who would be eligible  to  receive
 shares  if  he  OR  SHE were employed by the corporation. Nothing herein
 contained shall be construed to prohibit the transfer of shares by oper-
 ation of law or by court decree.  No transferee of shares  by  operation
 of  law  or  court decree may vote the shares for any purpose whatsoever
 except with respect to corporate action under sections 909 and  1001  of
 this chapter. The restriction in the preceding sentence shall not apply,
 however,  where  such transferee would be eligible to have shares issued
 to him OR HER if he OR SHE were an employee of the corporation  and,  if
 there  are  other  shareholders,  a  majority of such other shareholders
 shall fail to redeem the shares so transferred, pursuant to section 1510
 of this article, within sixty days of receiving written notice  of  such
 transfer.  Any  sale  or  transfer,  except by operation of law or court
 decree or except for a corporation having only one shareholder,  may  be
 made only after the same shall have been approved by the board of direc-
 tors, or at a shareholders' meeting specially called for such purpose by
 such  proportion, not less than a majority, of the outstanding shares as
 may be provided in the certificate of incorporation or in the by-laws of
 such professional service corporation. At such shareholders' meeting the
 shares held by the shareholder proposing to sell or transfer his OR  HER
 shares  may  not  be voted or counted for any purpose, unless all share-
 holders consent that such shares be voted or counted. The certificate of
 incorporation or the by-laws of the professional service corporation, or
 the professional service corporation and  the  shareholders  by  private
 agreement,  may  provide,  in  lieu  of  or in addition to the foregoing
 provisions, for the alienation of shares and may require the  redemption
 or purchase of such shares by such corporation at prices and in a manner
 specifically set forth therein. The existence of the restrictions on the
 sale  or transfer of shares, as contained in this article and, if appli-
 cable, in the certificate of incorporation, by-laws, stock  purchase  or

 S. 4221                             4

 stock  redemption agreement, shall be noted conspicuously on the face or
 back of every certificate for shares issued by  a  professional  service
 corporation.  Any  sale  or  transfer  in violation of such restrictions
 shall be void.
   (C)  A FIRM ESTABLISHED FOR THE BUSINESS PURPOSE OF INCORPORATING AS A
 PROFESSIONAL SERVICE CORPORATION PURSUANT TO PARAGRAPH  (H)  OF  SECTION
 FIFTEEN  HUNDRED  THREE  OF  THIS  ARTICLE, SHALL PURCHASE OR REDEEM THE
 SHARES OF A NON-LICENSED PROFESSIONAL SHAREHOLDER IN THE CASE OF HIS  OR
 HER TERMINATION OF EMPLOYMENT WITHIN THIRTY DAYS AFTER SUCH TERMINATION.
 A  FIRM  ESTABLISHED  FOR  THE  BUSINESS  PURPOSE  OF INCORPORATING AS A
 PROFESSIONAL SERVICE CORPORATION PURSUANT TO PARAGRAPH  (H)  OF  SECTION
 FIFTEEN HUNDRED THREE OF THIS ARTICLE, SHALL NOT BE REQUIRED TO PURCHASE
 OR  REDEEM  THE  SHARES OF A TERMINATED NON-LICENSED PROFESSIONAL SHARE-
 HOLDER IF SUCH SHARES, WITHIN THIRTY DAYS AFTER  SUCH  TERMINATION,  ARE
 SOLD  OR  TRANSFERRED TO ANOTHER EMPLOYEE OF THE CORPORATION PURSUANT TO
 THIS ARTICLE.
   § 6. Section 1514 of the business corporation law is amended by adding
 a new paragraph (c) to read as follows:
   (C) EACH FIRM ESTABLISHED FOR THE BUSINESS PURPOSE OF INCORPORATING AS
 A PROFESSIONAL SERVICE CORPORATION PURSUANT TO PARAGRAPH (H) OF  SECTION
 FIFTEEN  HUNDRED  THREE OF THIS ARTICLE SHALL, AT LEAST ONCE EVERY THREE
 YEARS ON OR BEFORE THE  DATE  PRESCRIBED  BY  THE  LICENSING  AUTHORITY,
 FURNISH  A  STATEMENT  TO  THE LICENSING AUTHORITY LISTING THE NAMES AND
 RESIDENCE ADDRESSES OF EACH SHAREHOLDER, DIRECTOR AND  OFFICER  OF  SUCH
 CORPORATION  AND  CERTIFY  AS THE DATE OF CERTIFICATION AND AT ALL TIMES
 OVER THE ENTIRE THREE YEAR PERIOD THAT:
   (I) AT LEAST FIFTY-ONE PERCENT OF THE OUTSTANDING SHARES OF  STOCK  OF
 THE CORPORATION ARE AND WERE OWNED BY CERTIFIED PUBLIC ACCOUNTANTS,
   (II)  AT  LEAST FIFTY-ONE PERCENT OF THE DIRECTORS ARE AND WERE CERTI-
 FIED PUBLIC ACCOUNTANTS,
   (III) AT LEAST FIFTY-ONE PERCENT OF THE OFFICERS ARE AND  WERE  CERTI-
 FIED PUBLIC ACCOUNTANTS,
   (IV)  THE PRESIDENT, THE CHAIRPERSON OF THE BOARD OF DIRECTORS AND THE
 CHIEF EXECUTIVE OFFICER  OR  OFFICERS  ARE  AND  WERE  CERTIFIED  PUBLIC
 ACCOUNTANTS.
 THE  STATEMENT  SHALL BE SIGNED BY THE PRESIDENT OR ANY CERTIFIED PUBLIC
 ACCOUNTANT VICE-PRESIDENT AND  ATTESTED  TO  BY  THE  SECRETARY  OR  ANY
 ASSISTANT SECRETARY OF THE CORPORATION.
   § 7. Paragraph (d) of section 1525 of the business corporation law, as
 added by chapter 505 of the laws of 1983, is amended to read as follows:
   (d) "Foreign  professional  service  corporation" means a professional
 service corporation, whether or not denominated as such, organized under
 the laws of a jurisdiction other than this state, all of the  sharehold-
 ers,  directors  and  officers  of  which are authorized and licensed to
 practice the profession for which such corporation  is  licensed  to  do
 business;  except  that  all  shareholders,  directors and officers of a
 foreign professional service corporation which provides health  services
 in  this  state  shall be licensed in this state. A FOREIGN PROFESSIONAL
 SERVICE CORPORATION FORMED TO LAWFULLY ENGAGE IN THE PRACTICE OF  PUBLIC
 ACCOUNTANCY,  AS  SUCH  PRACTICE  IS  DEFINED  UNDER ARTICLE ONE HUNDRED
 FORTY-NINE OF THE EDUCATION LAW,  OR  EQUIVALENT  STATE  LAW,  SHALL  BE
 REQUIRED  TO  SHOW  (1)  THAT  A SIMPLE MAJORITY OF THE OWNERSHIP OF THE
 FIRM, IN TERMS OF FINANCIAL INTERESTS, AND VOTING  RIGHTS  HELD  BY  THE
 FIRM'S  OWNERS,  BELONGS  TO  INDIVIDUALS  LICENSED  TO  PRACTICE PUBLIC
 ACCOUNTANCY IN SOME STATE, AND (2) THAT ALL SHAREHOLDERS  OF  A  FOREIGN
 PROFESSIONAL SERVICE CORPORATION WHOSE PRINCIPAL PLACE OF BUSINESS IS IN

 S. 4221                             5
 
 THIS STATE, AND WHO ARE ENGAGED IN THE PRACTICE OF PUBLIC ACCOUNTANCY IN
 THIS  STATE,  HOLD  A  VALID  LICENSE  ISSUED UNDER SECTION SEVENTY-FOUR
 HUNDRED FOUR OF THE EDUCATION  LAW.  FOR  PURPOSES  OF  THIS  PARAGRAPH,
 "FINANCIAL  INTEREST"  MEANS  CAPITAL  STOCK,  CAPITAL ACCOUNTS, CAPITAL
 CONTRIBUTIONS, CAPITAL INTEREST, OR INTEREST IN  UNDISTRIBUTED  EARNINGS
 OF  A  BUSINESS ENTITY.  ALTHOUGH FIRMS MAY INCLUDE NON-LICENSEE OWNERS,
 THE FIRM AND ITS OWNERS MUST COMPLY WITH RULES PROMULGATED BY THE  STATE
 BOARD  OF  REGENTS.    NOTWITHSTANDING  THE FOREGOING, A FIRM REGISTERED
 UNDER THIS SECTION MAY NOT HAVE NON-LICENSEE OWNERS IF THE  FIRM'S  NAME
 INCLUDES  THE  WORDS "CERTIFIED PUBLIC ACCOUNTANT," OR "CERTIFIED PUBLIC
 ACCOUNTANTS," OR THE ABBREVIATIONS "CPA" OR  "CPAS".  EACH  NON-LICENSEE
 OWNER  OF A FIRM THAT IS OPERATING UNDER THIS SECTION SHALL BE A NATURAL
 PERSON WHO ACTIVELY PARTICIPATES IN THE BUSINESS  OF  THE  FIRM  OR  ITS
 AFFILIATED  ENTITIES, PROVIDED EACH BENEFICIAL OWNER OF AN EQUITY INTER-
 EST IN SUCH ENTITY IS A NATURAL PERSON WHO ACTIVELY PARTICIPATES IN  THE
 BUSINESS  CONDUCTED BY THE FIRM OR ITS AFFILIATED ENTITIES. FOR PURPOSES
 OF THIS PARAGRAPH, "ACTIVELY PARTICIPATE" MEANS TO PROVIDE  SERVICES  TO
 CLIENTS  OR  TO OTHERWISE INDIVIDUALLY TAKE PART IN THE DAY-TO-DAY BUSI-
 NESS OR MANAGEMENT OF THE FIRM.
   § 8. Subdivision (q) of section 121-1500 of the  partnership  law,  as
 amended  by  chapter  475  of  the  laws  of 2014, is amended to read as
 follows:
   (q) Each partner of a registered limited liability partnership  formed
 to  provide  medical services in this state must be licensed pursuant to
 article 131 of the education law to practice medicine in this state  and
 each  partner  of  a  registered limited liability partnership formed to
 provide dental services in this state must be licensed pursuant to arti-
 cle 133 of the education law to practice dentistry in this state.   Each
 partner  of a registered limited liability partnership formed to provide
 veterinary services in this state must be licensed pursuant  to  article
 135  of the education law to practice veterinary medicine in this state.
 EACH PARTNER OF A REGISTERED LIMITED  LIABILITY  PARTNERSHIP  FORMED  TO
 PROVIDE  PUBLIC  ACCOUNTANCY SERVICES, WHOSE PRINCIPAL PLACE OF BUSINESS
 IS IN THIS STATE AND WHO PROVIDES PUBLIC ACCOUNTANCY SERVICES,  MUST  BE
 LICENSED PURSUANT TO ARTICLE 149 OF THE EDUCATION LAW TO PRACTICE PUBLIC
 ACCOUNTANCY  IN THIS STATE. Each partner of a registered limited liabil-
 ity partnership formed to provide professional engineering, land survey-
 ing, geological services, architectural and/or  landscape  architectural
 services in this state must be licensed pursuant to article 145, article
 147  and/or  article 148 of the education law to practice one or more of
 such professions in this state. Each partner  of  a  registered  limited
 liability  partnership  formed  to provide licensed clinical social work
 services in this state must be licensed pursuant to article 154  of  the
 education law to practice clinical social work in this state. Each part-
 ner  of  a  registered  limited  liability partnership formed to provide
 creative arts therapy services in this state must be  licensed  pursuant
 to article 163 of the education law to practice creative arts therapy in
 this  state.  Each partner of a registered limited liability partnership
 formed to provide marriage and family therapy  services  in  this  state
 must  be  licensed pursuant to article 163 of the education law to prac-
 tice marriage and family therapy in this state. Each partner of a regis-
 tered limited liability partnership  formed  to  provide  mental  health
 counseling  services  in this state must be licensed pursuant to article
 163 of the education law to practice mental health  counseling  in  this
 state. Each partner of a registered limited liability partnership formed
 to provide psychoanalysis services in this state must be licensed pursu-

 S. 4221                             6
 
 ant  to  article  163 of the education law to practice psychoanalysis in
 this state. Each partner of a registered limited  liability  partnership
 formed  to  provide applied behavior analysis service in this state must
 be licensed or certified pursuant to article 167 of the education law to
 practice  applied  behavior  analysis in this state. A LIMITED LIABILITY
 PARTNERSHIP FORMED TO LAWFULLY ENGAGE IN THE PRACTICE OF PUBLIC  ACCOUN-
 TANCY, AS SUCH PRACTICE IS RESPECTIVELY DEFINED UNDER ARTICLE 149 OF THE
 EDUCATION  LAW,  SHALL BE REQUIRED TO SHOW (1) THAT A SIMPLE MAJORITY OF
 THE OWNERSHIP OF THE FIRM, IN TERMS OF FINANCIAL INTERESTS,  AND  VOTING
 RIGHTS  HELD  BY  THE  FIRM'S OWNERS, BELONGS TO INDIVIDUALS LICENSED TO
 PRACTICE PUBLIC ACCOUNTANCY IN SOME STATE, AND (2) THAT ALL PARTNERS  OF
 A  LIMITED LIABILITY PARTNERSHIP WHOSE PRINCIPAL PLACE OF BUSINESS IS IN
 THIS STATE, AND WHO ARE ENGAGED IN THE PRACTICE OF PUBLIC ACCOUNTANCY IN
 THIS STATE, HOLD A  VALID  LICENSE  ISSUED  UNDER  SECTION  SEVENTY-FOUR
 HUNDRED  FOUR  OF  THE  EDUCATION LAW. FOR PURPOSES OF THIS SUBDIVISION,
 "FINANCIAL INTEREST" MEANS  CAPITAL  STOCK,  CAPITAL  ACCOUNTS,  CAPITAL
 CONTRIBUTIONS,  CAPITAL  INTEREST, OR INTEREST IN UNDISTRIBUTED EARNINGS
 OF A BUSINESS ENTITY.  ALTHOUGH FIRMS MAY INCLUDE  NON-LICENSEE  OWNERS,
 THE  FIRM AND ITS OWNERS MUST COMPLY WITH RULES PROMULGATED BY THE STATE
 BOARD OF REGENTS. NOTWITHSTANDING THE FOREGOING, A FIRM REGISTERED UNDER
 THIS SECTION MAY  NOT  HAVE  NON-LICENSEE  OWNERS  IF  THE  FIRM'S  NAME
 INCLUDES  THE  WORDS "CERTIFIED PUBLIC ACCOUNTANT," OR "CERTIFIED PUBLIC
 ACCOUNTS," OR THE ABBREVIATIONS "CPA" OR "CPAS". EACH NON-LICENSEE OWNER
 OF A FIRM THAT IS FORMED UNDER THIS  SECTION  SHALL  BE  (1)  A  NATURAL
 PERSON  WHO  ACTIVELY  PARTICIPATES  IN  THE BUSINESS OF THE FIRM OR ITS
 AFFILIATED ENTITIES, OR (2) AN ENTITY, INCLUDING, BUT NOT LIMITED TO,  A
 PARTNERSHIP  OR PROFESSIONAL CORPORATION, PROVIDED EACH BENEFICIAL OWNER
 OF AN EQUITY INTEREST IN SUCH ENTITY IS A NATURAL  PERSON  WHO  ACTIVELY
 PARTICIPATES  IN  THE  BUSINESS  CONDUCTED BY THE FIRM OR ITS AFFILIATED
 ENTITIES. FOR PURPOSES OF THIS SUBDIVISION, "ACTIVELY PARTICIPATE" MEANS
 TO PROVIDE SERVICES TO CLIENTS OR TO OTHERWISE INDIVIDUALLY TAKE PART IN
 THE DAY-TO-DAY BUSINESS OR MANAGEMENT OF THE FIRM.
   § 9. Subdivision (q) of section 121-1502 of the  partnership  law,  as
 amended  by  chapter  475  of  the  laws  of 2014, is amended to read as
 follows:
   (q) Each partner of a  foreign  limited  liability  partnership  which
 provides  medical  services  in  this state must be licensed pursuant to
 article 131 of the education law to practice medicine in the  state  and
 each  partner  of a foreign limited liability partnership which provides
 dental services in the state must be licensed pursuant to article 133 of
 the education law to practice dentistry in this state. Each partner of a
 foreign limited liability partnership which provides veterinary  service
 in  the state shall be licensed pursuant to article 135 of the education
 law to practice veterinary medicine in this state.  Each  partner  of  a
 foreign  limited liability partnership which provides professional engi-
 neering, land surveying, geological services, architectural and/or land-
 scape architectural services in this state must be licensed pursuant  to
 article  145,  article  147  and/or  article 148 of the education law to
 practice one or more of such professions.   EACH PARTNER  OF  A  FOREIGN
 REGISTERED  LIMITED  LIABILITY  PARTNERSHIP  FORMED  TO  PROVIDE  PUBLIC
 ACCOUNTANCY SERVICES, WHOSE PRINCIPAL PLACE OF BUSINESS IS IN THIS STATE
 AND WHO PROVIDES PUBLIC ACCOUNTANCY SERVICES, MUST BE LICENSED  PURSUANT
 TO  ARTICLE  149  OF THE EDUCATION LAW TO PRACTICE PUBLIC ACCOUNTANCY IN
 THIS STATE. Each partner of  a  foreign  limited  liability  partnership
 which provides licensed clinical social work services in this state must
 be  licensed  pursuant  to  article 154 of the education law to practice

 S. 4221                             7
 
 licensed clinical social work in this state. Each partner of  a  foreign
 limited  liability  partnership  which  provides  creative  arts therapy
 services in this state must be licensed pursuant to article 163  of  the
 education  law  to  practice  creative  arts therapy in this state. Each
 partner of  a  foreign  limited  liability  partnership  which  provides
 marriage  and  family  therapy  services  in this state must be licensed
 pursuant to article 163 of the education law to  practice  marriage  and
 family  therapy in this state. Each partner of a foreign limited liabil-
 ity partnership which provides mental health counseling services in this
 state must be licensed pursuant to article 163 of the education  law  to
 practice  mental  health  counseling  in  this  state. Each partner of a
 foreign limited  liability  partnership  which  provides  psychoanalysis
 services  in  this state must be licensed pursuant to article 163 of the
 education law to practice psychoanalysis in this state. Each partner  of
 a  foreign limited liability partnership which provides applied behavior
 analysis services in this state must be licensed or  certified  pursuant
 to  article 167 of the education law to practice applied behavior analy-
 sis in this state.  A FOREIGN LIMITED LIABILITY  PARTNERSHIP  FORMED  TO
 LAWFULLY  ENGAGE IN THE PRACTICE OF PUBLIC ACCOUNTANCY, AS SUCH PRACTICE
 IS RESPECTIVELY DEFINED UNDER ARTICLE 149 OF THE EDUCATION LAW, SHALL BE
 REQUIRED TO SHOW (1) THAT A SIMPLE MAJORITY  OF  THE  OWNERSHIP  OF  THE
 FIRM,  IN  TERMS  OF  FINANCIAL INTERESTS, AND VOTING RIGHTS HELD BY THE
 FIRM'S OWNERS,  BELONGS  TO  INDIVIDUALS  LICENSED  TO  PRACTICE  PUBLIC
 ACCOUNTANCY IN SOME STATE, AND (2) THAT ALL PARTNERS OF A FOREIGN LIMIT-
 ED  LIABILITY  PARTNERSHIP  WHOSE PRINCIPAL PLACE OF BUSINESS IS IN THIS
 STATE, AND WHO ARE ENGAGED IN THE PRACTICE OF PUBLIC ACCOUNTANCY IN THIS
 STATE, HOLD A VALID LICENSE ISSUED UNDER  SECTION  SEVENTY-FOUR  HUNDRED
 FOUR  OF THE EDUCATION LAW. FOR PURPOSES OF THIS SUBDIVISION, "FINANCIAL
 INTEREST" MEANS CAPITAL STOCK, CAPITAL ACCOUNTS, CAPITAL  CONTRIBUTIONS,
 CAPITAL  INTEREST,  OR  INTEREST IN UNDISTRIBUTED EARNINGS OF A BUSINESS
 ENTITY.  ALTHOUGH FIRMS MAY INCLUDE NON-LICENSEE OWNERS,  THE  FIRM  AND
 ITS  OWNERS  MUST  COMPLY  WITH  RULES PROMULGATED BY THE STATE BOARD OF
 REGENTS. NOTWITHSTANDING THE FOREGOING, A  FIRM  REGISTERED  UNDER  THIS
 SECTION MAY NOT HAVE NON-LICENSEE OWNERS IF THE FIRM'S NAME INCLUDES THE
 WORDS  "CERTIFIED PUBLIC ACCOUNTANT," OR "CERTIFIED PUBLIC ACCOUNTANTS,"
 OR THE ABBREVIATIONS "CPA" OR "CPAS".  EACH NON-LICENSEE OWNER OF A FIRM
 THAT IS FORMED UNDER THIS SECTION SHALL BE  (1)  A  NATURAL  PERSON  WHO
 ACTIVELY  PARTICIPATES  IN  THE  BUSINESS  OF THE FIRM OR ITS AFFILIATED
 ENTITIES, OR (2) AN ENTITY, INCLUDING, BUT NOT LIMITED TO, A PARTNERSHIP
 OR PROFESSIONAL CORPORATION, PROVIDED EACH BENEFICIAL OWNER OF AN EQUITY
 INTEREST IN SUCH ENTITY IS A NATURAL PERSON WHO ACTIVELY PARTICIPATES IN
 THE BUSINESS CONDUCTED BY THE FIRM OR  ITS  AFFILIATED  ENTITIES.    FOR
 PURPOSES  OF  THIS  SUBDIVISION, "ACTIVELY PARTICIPATE" MEANS TO PROVIDE
 SERVICES TO CLIENTS OR TO OTHERWISE INDIVIDUALLY TAKE PART IN  THE  DAY-
 TO-DAY BUSINESS OR MANAGEMENT OF THE FIRM.
   §  10.  Subdivision  (h) of section 121-101 of the partnership law, as
 added by chapter 950 of the laws of 1990, is amended to read as follows:
   (h) "Limited partnership" and  "domestic  limited  partnership"  mean,
 unless  the  context otherwise requires, a partnership (i) formed by two
 or more persons pursuant to this article or which complies with subdivi-
 sion (a) of section 121-1202 of this article and (ii) having one or more
 general partners and one or more limited partners.  NOTWITHSTANDING  ANY
 OTHER  PROVISIONS OF LAW A LIMITED PARTNERSHIP OR DOMESTIC LIMITED PART-
 NERSHIP FORMED TO LAWFULLY ENGAGE IN THE PRACTICE OF PUBLIC ACCOUNTANCY,
 AS SUCH PRACTICE IS RESPECTIVELY DEFINED UNDER ARTICLE 149 OF THE EDUCA-
 TION LAW SHALL BE REQUIRED TO SHOW (1) THAT A  SIMPLE  MAJORITY  OF  THE

 S. 4221                             8
 
 OWNERSHIP OF THE FIRM, IN TERMS OF FINANCIAL INTERESTS, INCLUDING OWNER-
 SHIP-BASED  COMPENSATION,  AND  VOTING RIGHTS HELD BY THE FIRM'S OWNERS,
 BELONGS TO INDIVIDUALS LICENSED TO PRACTICE PUBLIC ACCOUNTANCY  IN  SOME
 STATE,  AND  (2)  THAT ALL PARTNERS OF A LIMITED PARTNERSHIP OR DOMESTIC
 LIMITED PARTNERSHIP, WHOSE PRINCIPAL PLACE OF BUSINESS IS IN THIS STATE,
 AND WHO ARE ENGAGED IN THE PRACTICE OF PUBLIC ACCOUNTANCY IN THIS STATE,
 HOLD A VALID LICENSE ISSUED UNDER SECTION SEVENTY-FOUR HUNDRED  FOUR  OF
 THE  EDUCATION  LAW  OR  ARE  PUBLIC  ACCOUNTANTS LICENSED UNDER SECTION
 SEVENTY-FOUR HUNDRED FIVE OF  THE  EDUCATION  LAW.  ALTHOUGH  FIRMS  MAY
 INCLUDE  NON-LICENSEE  OWNERS,  THE FIRM AND ITS OWNERS MUST COMPLY WITH
 RULES PROMULGATED BY THE STATE BOARD OF REGENTS.    NOTWITHSTANDING  THE
 FOREGOING,  A FIRM REGISTERED UNDER THIS SECTION MAY NOT HAVE NON-LICEN-
 SEE OWNERS IF THE FIRM'S  NAME  INCLUDES  THE  WORDS  "CERTIFIED  PUBLIC
 ACCOUNTANT,"  OR  "CERTIFIED  PUBLIC  ACCOUNTANTS," OR THE ABBREVIATIONS
 "CPA" OR "CPAS". EACH NON-LICENSEE OWNER OF A FIRM  THAT  IS  REGISTERED
 UNDER  THIS  SECTION  SHALL BE (1) A NATURAL PERSON WHO ACTIVELY PARTIC-
 IPATES IN THE BUSINESS OF THE FIRM OR ITS AFFILIATED ENTITIES, OR (2) AN
 ENTITY, INCLUDING, BUT NOT LIMITED TO,  A  PARTNERSHIP  OR  PROFESSIONAL
 CORPORATION,  PROVIDED  EACH  BENEFICIAL  OWNER OF AN EQUITY INTEREST IN
 SUCH ENTITY IS A NATURAL PERSON WHO ACTIVELY PARTICIPATES IN  THE  BUSI-
 NESS  CONDUCTED  BY THE FIRM OR ITS AFFILIATED ENTITIES. FOR PURPOSES OF
 THIS SUBDIVISION, "ACTIVELY PARTICIPATE" MEANS TO  PROVIDE  SERVICES  TO
 CLIENTS  OR  TO OTHERWISE INDIVIDUALLY TAKE PART IN THE DAY-TO-DAY BUSI-
 NESS OR MANAGEMENT OF THE FIRM.
   § 11. Subdivision (b) of section 1207 of the limited liability company
 law, as amended by chapter 475 of the laws of 2014, is amended  to  read
 as follows:
   (b)  With  respect to a professional service limited liability company
 formed to provide medical services as such services are defined in arti-
 cle 131 of the education law, each  member  of  such  limited  liability
 company must be licensed pursuant to article 131 of the education law to
 practice medicine in this state.  With respect to a professional service
 limited  liability  company  formed  to  provide dental services as such
 services are defined in article 133 of the education law, each member of
 such limited liability company must be licensed pursuant to article  133
 of  the  education law to practice dentistry in this state. With respect
 to a professional service limited liability company  formed  to  provide
 veterinary  services  as such services are defined in article 135 of the
 education law, each member of such limited  liability  company  must  be
 licensed pursuant to article 135 of the education law to practice veter-
 inary  medicine  in  this  state. With respect to a professional service
 limited liability company formed to  provide  professional  engineering,
 land surveying, architectural, landscape architectural and/or geological
 services  as  such  services are defined in article 145, article 147 and
 article 148 of the education law, each member of such limited  liability
 company  must  be  licensed  pursuant to article 145, article 147 and/or
 article 148 of the education  law  to  practice  one  or  more  of  such
 professions  in  this  state.    WITH  RESPECT TO A PROFESSIONAL SERVICE
 LIMITED LIABILITY COMPANY FORMED TO PROVIDE PUBLIC ACCOUNTANCY  SERVICES
 AS  SUCH  SERVICES  ARE DEFINED IN ARTICLE 149 OF THE EDUCATION LAW EACH
 MEMBER OF SUCH LIMITED LIABILITY COMPANY WHOSE PRINCIPAL PLACE OF  BUSI-
 NESS IS IN THIS STATE AND WHO PROVIDES PUBLIC ACCOUNTANCY SERVICES, MUST
 BE  LICENSED  PURSUANT  TO  ARTICLE 149 OF THE EDUCATION LAW TO PRACTICE
 PUBLIC ACCOUNTANCY IN THIS STATE. With respect to a professional service
 limited liability company formed to  provide  licensed  clinical  social
 work  services as such services are defined in article 154 of the educa-

 S. 4221                             9
 
 tion law, each  member  of  such  limited  liability  company  shall  be
 licensed  pursuant  to  article  154  of  the  education law to practice
 licensed clinical social work in this state. With respect to  a  profes-
 sional service limited liability company formed to provide creative arts
 therapy  services  as  such  services  are defined in article 163 of the
 education law, each member of such limited  liability  company  must  be
 licensed  pursuant to article 163 of the education law to practice crea-
 tive arts therapy in this state. With respect to a professional  service
 limited  liability company formed to provide marriage and family therapy
 services as such services are defined in article 163  of  the  education
 law,  each  member  of  such  limited liability company must be licensed
 pursuant to article 163 of the education law to  practice  marriage  and
 family  therapy  in  this  state. With respect to a professional service
 limited liability company formed to  provide  mental  health  counseling
 services  as  such  services are defined in article 163 of the education
 law, each member of such limited  liability  company  must  be  licensed
 pursuant  to  article 163 of the education law to practice mental health
 counseling in this state. With respect to a professional service limited
 liability company formed to  provide  psychoanalysis  services  as  such
 services are defined in article 163 of the education law, each member of
 such  limited liability company must be licensed pursuant to article 163
 of the education law to practice  psychoanalysis  in  this  state.  With
 respect  to  a  professional service limited liability company formed to
 provide applied behavior analysis services as such services are  defined
 in article 167 of the education law, each member of such limited liabil-
 ity company must be licensed or certified pursuant to article 167 of the
 education  law  to  practice  applied behavior analysis in this state. A
 PROFESSIONAL SERVICE LIMITED LIABILITY COMPANY FORMED TO LAWFULLY ENGAGE
 IN THE PRACTICE OF PUBLIC ACCOUNTANCY, AS SUCH PRACTICE IS  RESPECTIVELY
 DEFINED UNDER ARTICLE 149 OF THE EDUCATION LAW SHALL BE REQUIRED TO SHOW
 (1)  THAT  A  SIMPLE  MAJORITY OF THE OWNERSHIP OF THE FIRM, IN TERMS OF
 FINANCIAL INTERESTS, AND  VOTING  RIGHTS  HELD  BY  THE  FIRM'S  OWNERS,
 BELONGS  TO  INDIVIDUALS LICENSED TO PRACTICE PUBLIC ACCOUNTANCY IN SOME
 STATE, AND (2) THAT ALL MEMBERS OF A LIMITED PROFESSIONAL SERVICE LIMIT-
 ED LIABILITY COMPANY, WHOSE PRINCIPAL  PLACE  OF  BUSINESS  IS  IN  THIS
 STATE, AND WHO ARE ENGAGED IN THE PRACTICE OF PUBLIC ACCOUNTANCY IN THIS
 STATE,  HOLD  A  VALID LICENSE ISSUED UNDER SECTION SEVENTY-FOUR HUNDRED
 FOUR OF THE EDUCATION LAW. FOR PURPOSES OF THIS SUBDIVISION,  "FINANCIAL
 INTEREST"  MEANS CAPITAL STOCK, CAPITAL ACCOUNTS, CAPITAL CONTRIBUTIONS,
 CAPITAL INTEREST, OR INTEREST IN UNDISTRIBUTED EARNINGS  OF  A  BUSINESS
 ENTITY.    ALTHOUGH  FIRMS MAY INCLUDE NON-LICENSEE OWNERS, THE FIRM AND
 ITS OWNERS MUST COMPLY WITH RULES PROMULGATED  BY  THE  STATE  BOARD  OF
 REGENTS.    NOTWITHSTANDING  THE FOREGOING, A FIRM REGISTERED UNDER THIS
 SECTION MAY NOT HAVE NON-LICENSEE OWNERS IF THE FIRM'S NAME INCLUDES THE
 WORDS "CERTIFIED PUBLIC ACCOUNTANT," OR "CERTIFIED PUBLIC  ACCOUNTANTS,"
 OR  THE ABBREVIATIONS "CPA" OR "CPAS". EACH NON-LICENSEE OWNER OF A FIRM
 THAT IS REGISTERED UNDER THIS SECTION SHALL BE (1) A NATURAL PERSON  WHO
 ACTIVELY  PARTICIPATES  IN  THE  BUSINESS  OF THE FIRM OR ITS AFFILIATED
 ENTITIES, OR (2) AN ENTITY, INCLUDING, BUT NOT LIMITED TO, A PARTNERSHIP
 OR PROFESSIONAL CORPORATION, PROVIDED EACH BENEFICIAL OWNER OF AN EQUITY
 INTEREST IN SUCH ENTITY IS A NATURAL PERSON WHO ACTIVELY PARTICIPATES IN
 THE BUSINESS CONDUCTED BY THE  FIRM  OR  ITS  AFFILIATED  ENTITIES.  FOR
 PURPOSES  OF  THIS  SUBDIVISION, "ACTIVELY PARTICIPATE" MEANS TO PROVIDE
 SERVICES TO CLIENTS OR TO OTHERWISE INDIVIDUALLY TAKE PART IN  THE  DAY-
 TO-DAY BUSINESS OR MANAGEMENT OF THE FIRM.

 S. 4221                            10
 
   § 12. Subdivision (a) of section 1301 of the limited liability company
 law,  as  amended by chapter 475 of the laws of 2014, is amended to read
 as follows:
   (a)  "Foreign  professional service limited liability company" means a
 professional service limited liability company, whether or  not  denomi-
 nated  as  such,  organized  under the laws of a jurisdiction other than
 this state, (i) each of whose members and managers, if any, is a profes-
 sional authorized by law to render a professional  service  within  this
 state  and who is or has been engaged in the practice of such profession
 in such professional service limited liability company or a  predecessor
 entity, or will engage in the practice of such profession in the profes-
 sional  service limited liability company within thirty days of the date
 such professional becomes a member, or each of whose members and  manag-
 ers,  if  any, is a professional at least one of such members is author-
 ized by law to render a professional service within this state  and  who
 is  or  has  been  engaged  in  the  practice of such profession in such
 professional service limited liability company or a predecessor  entity,
 or  will  engage  in the practice of such profession in the professional
 service limited liability company within thirty days of  the  date  such
 professional  becomes  a  member,  or  (ii)  authorized by, or holding a
 license, certificate, registration or permit  issued  by  the  licensing
 authority  pursuant  to,  the  education  law  to  render a professional
 service within this state; except that all members and managers, if any,
 of  a  foreign  professional  service  limited  liability  company  that
 provides  health services in this state shall be licensed in this state.
 With respect to a foreign professional service limited liability company
 which provides veterinary services as such services are defined in arti-
 cle 135 of the education law, each member of such  foreign  professional
 service  limited liability company shall be licensed pursuant to article
 135 of the education law to practice veterinary medicine.  With  respect
 to  a  foreign  professional  service  limited  liability  company which
 provides medical services as such services are defined in article 131 of
 the education law, each member  of  such  foreign  professional  service
 limited  liability  company  must be licensed pursuant to article 131 of
 the education law to practice medicine in this state.  With respect to a
 foreign professional service limited liability  company  which  provides
 dental  services  as  such  services  are  defined in article 133 of the
 education law, each member of such foreign professional service  limited
 liability company must be licensed pursuant to article 133 of the educa-
 tion  law to practice dentistry in this state. With respect to a foreign
 professional service limited liability company  which  provides  profes-
 sional engineering, land surveying, geologic, architectural and/or land-
 scape  architectural  services  as  such services are defined in article
 145, article 147 and article 148 of the education law,  each  member  of
 such  foreign  professional  service  limited  liability company must be
 licensed pursuant to article 145, article 147 and/or article 148 of  the
 education law to practice one or more of such professions in this state.
 WITH RESPECT TO A FOREIGN PROFESSIONAL SERVICE LIMITED LIABILITY COMPANY
 WHICH  PROVIDES PUBLIC ACCOUNTANCY SERVICES AS SUCH SERVICES ARE DEFINED
 IN ARTICLE 149 OF THE EDUCATION LAW, EACH MEMBER OF SUCH FOREIGN PROFES-
 SIONAL SERVICE LIMITED LIABILITY COMPANY WHOSE PRINCIPAL PLACE OF  BUSI-
 NESS  IS  IN  THIS  STATE  AND WHO PROVIDES PUBLIC ACCOUNTANCY SERVICES,
 SHALL BE LICENSED PURSUANT TO ARTICLE 149 OF THE EDUCATION LAW TO  PRAC-
 TICE PUBLIC ACCOUNTANCY IN THIS STATE. With respect to a foreign profes-
 sional  service  limited liability company which provides licensed clin-
 ical social work services as such services are defined in article 154 of

 S. 4221                            11
 
 the education law, each member  of  such  foreign  professional  service
 limited  liability  company shall be licensed pursuant to article 154 of
 the education law to practice clinical social work in this  state.  With
 respect  to  a  foreign  professional  service limited liability company
 which provides creative arts  therapy  services  as  such  services  are
 defined in article 163 of the education law, each member of such foreign
 professional service limited liability company must be licensed pursuant
 to article 163 of the education law to practice creative arts therapy in
 this  state.  With  respect  to  a  foreign professional service limited
 liability company which provides marriage and family therapy services as
 such services are defined in article 163  of  the  education  law,  each
 member  of  such  foreign professional service limited liability company
 must be licensed pursuant to article 163 of the education law  to  prac-
 tice  marriage  and  family  therapy  in  this  state. With respect to a
 foreign professional service limited liability  company  which  provides
 mental  health counseling services as such services are defined in arti-
 cle 163 of the education law, each member of such  foreign  professional
 service  limited  liability company must be licensed pursuant to article
 163 of the education law to practice mental health  counseling  in  this
 state.  With respect to a foreign professional service limited liability
 company which provides psychoanalysis  services  as  such  services  are
 defined in article 163 of the education law, each member of such foreign
 professional service limited liability company must be licensed pursuant
 to  article  163 of the education law to practice psychoanalysis in this
 state. With respect to a foreign professional service limited  liability
 company  which  provides  applied  behavior  analysis  services  as such
 services are defined in article 167 of the education law, each member of
 such foreign professional service  limited  liability  company  must  be
 licensed  or  certified  pursuant to article 167 of the education law to
 practice applied behavior analysis in this state. A FOREIGN PROFESSIONAL
 SERVICE LIMITED LIABILITY COMPANY FORMED TO LAWFULLY ENGAGE IN THE PRAC-
 TICE OF PUBLIC ACCOUNTANCY, AS SUCH  PRACTICE  IS  RESPECTIVELY  DEFINED
 UNDER  ARTICLE  149  OF  THE EDUCATION LAW SHALL BE REQUIRED TO SHOW (1)
 THAT A SIMPLE MAJORITY OF THE OWNERSHIP OF THE FIRM, IN TERMS OF  FINAN-
 CIAL  INTERESTS, AND VOTING RIGHTS HELD BY THE FIRM'S OWNERS, BELONGS TO
 INDIVIDUALS LICENSED TO PRACTICE PUBLIC ACCOUNTANCY IN SOME  STATE,  AND
 (2)  THAT  ALL MEMBERS OF A FOREIGN LIMITED PROFESSIONAL SERVICE LIMITED
 LIABILITY COMPANY, WHOSE PRINCIPAL PLACE OF BUSINESS IS IN  THIS  STATE,
 AND WHO ARE ENGAGED IN THE PRACTICE OF PUBLIC ACCOUNTANCY IN THIS STATE,
 HOLD  A  VALID LICENSE ISSUED UNDER SECTION SEVENTY-FOUR HUNDRED FOUR OF
 THE EDUCATION LAW. FOR PURPOSES OF THIS SUBDIVISION,  "FINANCIAL  INTER-
 EST" MEANS CAPITAL STOCK, CAPITAL ACCOUNTS, CAPITAL CONTRIBUTIONS, CAPI-
 TAL  INTEREST, OR INTEREST IN UNDISTRIBUTED EARNINGS OF A BUSINESS ENTI-
 TY.  ALTHOUGH FIRMS MAY INCLUDE NON-LICENSEE OWNERS, THE  FIRM  AND  ITS
 OWNERS MUST COMPLY WITH RULES PROMULGATED BY THE STATE BOARD OF REGENTS.
 NOTWITHSTANDING  THE FOREGOING, A FIRM REGISTERED UNDER THIS SECTION MAY
 NOT HAVE NON-LICENSEE OWNERS IF  THE  FIRM'S  NAME  INCLUDES  THE  WORDS
 "CERTIFIED PUBLIC ACCOUNTANT," OR "CERTIFIED PUBLIC ACCOUNTANTS," OR THE
 ABBREVIATIONS "CPA" OR "CPAS". EACH NON-LICENSEE OWNER OF A FIRM THAT IS
 REGISTERED UNDER THIS SECTION SHALL BE (1) A NATURAL PERSON WHO ACTIVELY
 PARTICIPATES  IN THE BUSINESS OF THE FIRM OR ITS AFFILIATED ENTITIES, OR
 (2) AN ENTITY, INCLUDING, BUT NOT LIMITED TO, A PARTNERSHIP  OR  PROFES-
 SIONAL CORPORATION, PROVIDED EACH BENEFICIAL OWNER OF AN EQUITY INTEREST
 IN  SUCH  ENTITY  IS  A  NATURAL PERSON WHO ACTIVELY PARTICIPATES IN THE
 BUSINESS CONDUCTED BY THE FIRM OR ITS AFFILIATED ENTITIES. FOR  PURPOSES
 OF THIS SUBDIVISION, "ACTIVELY PARTICIPATE" MEANS TO PROVIDE SERVICES TO

 S. 4221                            12
 
 CLIENTS  OR  TO OTHERWISE INDIVIDUALLY TAKE PART IN THE DAY-TO-DAY BUSI-
 NESS OR MANAGEMENT OF THE FIRM.
   §  13.  Notwithstanding  any  other  provision of law to the contrary,
 there is hereby established a fee for each non-licensee owner of a  firm
 that  is  registered in this state to lawfully engage in the practice of
 public accountancy. Such non-licensee owner shall  pay  a  fee  of  nine
 hundred dollars to the department of education on a triennial basis.
   § 14. This act shall take effect immediately.