Assembly Actions -
Lowercase Senate Actions - UPPERCASE |
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May 10, 2022 |
referred to higher education delivered to assembly passed senate |
May 02, 2022 |
advanced to third reading |
Apr 27, 2022 |
2nd report cal. |
Apr 26, 2022 |
1st report cal.877 |
Jan 05, 2022 |
referred to higher education returned to senate died in assembly |
May 24, 2021 |
referred to higher education delivered to assembly passed senate |
May 19, 2021 |
advanced to third reading |
May 12, 2021 |
2nd report cal. |
May 11, 2021 |
1st report cal.1028 |
Feb 03, 2021 |
referred to higher education |
Senate Bill S4221
2021-2022 Legislative Session
Relates to certified public accountants
download bill text pdfSponsored By
(D) 11th Senate District
Archive: Last Bill Status - In Assembly Committee
- Introduced
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- In Committee Assembly
- In Committee Senate
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- On Floor Calendar Assembly
- On Floor Calendar Senate
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- Passed Assembly
- Passed Senate
- Delivered to Governor
- Signed By Governor
Actions
Votes
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Floor Vote: May 11, 2022
aye (61)- Addabbo Jr.
- Akshar
- Bailey
- Biaggi
- Borrello
- Boyle
- Breslin
- Brisport
- Brooks
- Cleare
- Comrie
- Cooney
- Felder
- Gallivan
- Gaughran
- Gianaris
- Gounardes
- Griffo
- Harckham
- Helming
- Hinchey
- Hoylman-Sigal
- Jackson
- Jordan
- Kaminsky
- Kaplan
- Kavanagh
- Kennedy
- Krueger
- Liu
- Mannion
- Martucci
- Mattera
- May
- Mayer
- Myrie
- O'Mara
- Oberacker
- Ortt
- Palumbo
- Parker
- Persaud
- Ramos
- Rath III
- Reichlin-Melnick
- Ritchie
- Rivera
- Ryan
- Salazar
- Sanders Jr.
- Savino
- Sepúlveda
- Serino
- Serrano
- Skoufis
- Stavisky
- Stec
- Stewart-Cousins
- Tedisco
- Thomas
- Weik
nay (1)excused (1)
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co-Sponsors
(D) 15th Senate District
(D) 14th Senate District
(D) Senate District
(D) 26th Senate District
(D, WF) 47th Senate District
(D) Senate District
(D, WF) 63rd Senate District
(D) 50th Senate District
(D, WF) 37th Senate District
(D, WF) 13th Senate District
(D, WF) 18th Senate District
(D) 32nd Senate District
2021-S4221 (ACTIVE) - Details
- See Assembly Version of this Bill:
- A1938
- Current Committee:
- Assembly Higher Education
- Law Section:
- Business Corporation Law
- Laws Affected:
- Amd §§1503, 1507, 1508, 1509, 1511, 1514 & 1525, BC L; amd §§121-1500, 121-1502 & 121-101, Partn L; amd §§1207 & 1301, Lim Lil L
- Versions Introduced in 2021-2022 Legislative Session:
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S4221, A1938
2021-S4221 (ACTIVE) - Summary
Relates to certified public accountants; requires that a majority of the ownership of a professional service corporation formed to lawfully engage in the practice of public accountancy are individuals licensed to practice public accountancy in some state; enacts similar provisions for partnerships and LLCs.
2021-S4221 (ACTIVE) - Sponsor Memo
BILL NUMBER: S4221 SPONSOR: STAVISKY TITLE OF BILL: An act to amend the business corporation law, the partnership law and the limited liability company law, in relation to certified public accountants PURPOSE: This bill would amend the education law to allow non-CPAs to be minority owners of CPA firms, consistent with 49 other states and jurisdictions. SUMMARY OF PROVISIONS: Section 7408 of the education law is amended to permit firms established pursuant to the business corporation, partnership and limited liability company laws to register with the State Education Department. Section 1503 of the business corporation law is amended to authorize
non-CPA ownership of a firm provided: *Licensed CPAs must hold a simple majority of the ownership; *A licensed CPA or CPA with practice privileges must be responsible for registration of the firm; *The partner/owner in charge of attest services must be a licensed CPA; *All non-CPA owners must be actively engaged in working for the firm or an affiliated entity; and *Passive ownership is not permitted. Section 1507 of the business corporation law is amended to permit the issuance of shares provided at least 51 percent of the outstanding shares of stock of the corporation are owned by certified public accountants, at least 51 percent of the directors and officers are CPAs, and the president, chairperson of the board and CEO are CPAs. Section 1508 of the business corporation law is amended to permit non- licensees to be directors and officers of firms. Section 1509 of the business corporation law is amended to clarify provisions regarding the disqualification of shareholders, directors, officers and employees in a professional service corporation incorpo- rated to allow non-CPA ownership. Section 1511 of the business corporation law is amended to require the redemption or purchase of shares within 30 days in the event that a non-licensed professional shareholder is terminated, unless such shares are transferred or sold to another employee within the corporation. Revised 8/3/20 Section 1514 is amended to require that firms established as profes- sional service corporations furnish statements to the State Education Department with relevant information for each shareholder, director and officer. Section 1525 of the business corporation law is amended to authorize the incorporation of accounting firms with non-CPA owners as foreign profes- sional service corporations. Section 121-1500 of the partnership law is amended to allow non-CPAs to become partners in a limited liability partnership formed to provide accountancy services. Section 121-1502 of the partnership law is amended to allow non-CPAs to become partners in a foreign limited liability partnership formed to provide accountancy services. Section 121-101 of the partnership law is amended to allow non-CPAs to become partners in a limited partnership or domestic limited partnership formed to provide accountancy services. Section 1207 of the limited liability company law is amended to allow non-CPAs to become members of a professional service limited liability company formed to provide accountancy services. Section 1301 of the limited liability company law is amended to allow non-CPAs to become members of a foreign professional services limited liability company formed to provide accountancy services. Section 13 establishes a $900 fee to be paid on a triennial basis to the state education department by each non-licensee owner of a New York State-registered accounting firm. Section 14 provides that the act shall take effect immediately. JUSTIFICATION: By enacting this legislation, New York would be joining 49 other states and jurisdictions in allowing for non-CPA ownership of firms. In 2012, Connecticut enacted similar legislation, leaving New York as the last state in the region without this proposal in law. The provisions of the legislation are consistent with and modeled after sections provided in the Uniform Accountancy Act (UAA). This legislation is needed so that New York CPA firms can better serve New York clients. As global competition, the complexity of business structures and rapid technological breakthroughs continue to redefine commerce, accounting firms of all sizes use the services of non-CPAs to help them navigate the dynamic terrain of today's business environment. These non-CPA professionals are critically important to the effective- ness of a CPA practice. In today's world, firms want to provide the best quality audits and this very often requires the skills of non-CPAs, such as systems engineers and other IT professionals, valuation specialists, actuaries, industry experts and others. Clients have come to expect that these specialists will participate in the CPA firm's work and the audit work product is better because of it. CPA firm work, however, remains just that, the work of a CPA firm. This legislation limits the percentage of allowed non-CPA firm owners, ensur- ing that non-licensees can only ever have a minority interest in the firm. Further, enacting this legislation will even the playing field so that New York CPA firms will be permitted to have the same options to diversify their firm resources as firms in neighboring states who come in to New York to practice under mobility. In addition, smaller CPA firms will find it easier to have a succession plan as they transition to the next generation. Many clients now expect that a CPA firm will employ non-CPAs with significant expertise in specialized areas such as information technolo- gy. Therefore, CPA firms have a real need to attract and retain the best and brightest" in these areas and to incorporate these individuals into the firm's culture. The vast majority of states and jurisdictions have recognized this need and have implemented one method of doing this which is to give an individual an ownership stake in the firm so that all of these individuals have a shared interest in the long-term viability of the firm. This bill will benefit firms, the profession and the state by attracting additional business and job opportunities. LEGISLATIVE HISTORY: Introduced in a previous legislative session. FISCAL IMPLICATIONS: The non-licensee fee will raise approximately $1M for the state educa- tion department for each triennial registration period. EFFECTIVE DATE: Immediately.
2021-S4221 (ACTIVE) - Bill Text download pdf
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.
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