§ 1503. Organization.

(a) Notwithstanding any other provision of law, one or more
individuals duly authorized by law to render the same professional
service within the state may organize, or cause to be organized, a
professional service corporation for pecuniary profit under this article
for the purpose of rendering the same professional service, except that
one or more individuals duly authorized by law to practice professional
engineering, architecture, landscape architecture, land surveying or
geology within the state may organize, or cause to be organized, a
professional service corporation or a design professional service
corporation for pecuniary profit under this article for the purpose of
rendering such professional services as such individuals are authorized
to practice.

(b) The certificate of incorporation of a professional service
corporation shall meet the requirements of this chapter and (i) shall
state the profession or professions to be practiced by such corporation
and the names and residence addresses of all individuals who are to be
the original shareholders, directors and officers of such corporation,
and (ii) shall have attached thereto a certificate or certificates
issued by the licensing authority certifying that each of the proposed
shareholders, directors and officers is authorized by law to practice a
profession which the corporation is being organized to practice and, if
applicable, that one or more of such individuals is authorized to
practice each profession which the corporation will be authorized to
practice.

(b-1) The certificate of incorporation of a design professional
service corporation shall meet the requirements of this chapter,
provided that shareholders may include employee stock ownership plans
(ESOPs) and employees of the corporation not licensed as design
professionals, and provided further however that:

* (i) greater than seventy-five percent of the outstanding shares of
stock of the corporation are owned by design professionals,

* NB Effective until July 21, 2024

* (i) greater than seventy-five percent of the outstanding shares of
stock of the corporation are owned by design professionals and an ESOP
(or ESOPs) with greater than seventy-five percent of the plan's voting
trustees or greater than seventy-five percent of the plan's committee
members being design professionals,

* NB Effective July 21, 2024

* (ii) an ESOP, either in part or in its entirety, shall not
constitute part of the greater than seventy-five percent owned by design
professionals,

* NB Effective until July 21, 2024

* (ii) an ESOP, either in part or in its entirety, shall not
constitute part of the greater than seventy-five percent owned by design
professionals unless greater than seventy-five percent of the plan's
voting trustees or greater than seventy-five percent of the plan's
committee members are design professionals,

* NB Effective July 21, 2024

(iii) greater than seventy-five percent of the directors are design
professionals,

(iv) greater than seventy-five percent of the officers are design
professionals,

(v) the president, the chairperson of the board of directors and the
chief executive officer or officers are design professionals, and

(vi) the single largest shareholder is either a design professional or
an ESOP with greater than seventy-five percent of the plan's voting
trustees being design professionals and greater than seventy-five
percent of the plan's committee members being design professionals.

(b-2) The certificate of incorporation of a design professional
service corporation shall:

(i) state the profession or professions to be practiced by such
corporation,

(ii) state the names and residence addresses of all individuals or
ESOPs who are to be the original shareholders, directors and officers of
such corporation,

(iii) indicate the profession or professions of each original
shareholder, director and officer who is a design professional,

(iv) state the ownership interest of each original shareholder, and

(v) indicate the names of the original officers and directors who are
the president, the chairperson of the board of directors and the chief
executive officer or officers.

(b-3) The certificate of incorporation of a design professional
service corporation shall have attached thereto a certificate or
certificates issued by the licensing authority certifying that each of
the proposed shareholders, directors and officers who is listed as a
design professional is authorized by law to practice a profession which
the corporation is being organized to practice and, if applicable, that
one or more of such individuals is authorized to practice each
profession which the corporation will be authorized to practice. The
attached certificate or certificates shall also certify that the
president, the chairperson of the board of directors and the chief
executive officer or officers are authorized by law to practice a
profession which the corporation is being organized to practice.

(b-4) The certificate of incorporation of a design professional
service corporation shall also have attached thereto a certificate or
certificates issued by the licensing authority certifying that each of
the shareholders, officers, directors and owners have been deemed to
have been of good moral character as may be established by the
regulations of the commissioner of education.

(b-5) On or after January first, two thousand twelve, the state
education department and the department of state shall allow an existing
professional service corporation organized under this article and
practicing professional engineering, architecture, landscape
architecture, geology or land surveying, or practicing any combination
of such professions to become a design professional service corporation
as defined in this article, provided the professional service
corporation meets all of the requirements to become a design
professional service corporation, including that its name shall end with
the words "design professional corporation" or the abbreviation
"D.P.C.", by amending its certificate of incorporation so that it
contains the following statements:

(1) the names and residence addresses of all individuals or ESOPs who
will be the shareholders, directors and officers of the original design
professional service corporation; and

(2) the profession or professions of each shareholder, director and
officer who is a design professional of the original design professional
service corporation; and

(3) the ownership interest of each shareholder of the original design
professional service corporation; and

(4) the names of the officers and directors who will be the president,
the chairperson of the board of directors and the chief executive
officer or officers of the original design professional service
corporation.

(i) The certificate of amendment shall have attached thereto a
certificate or certificates issued by the licensing authority certifying
that each of the proposed shareholders, directors and officers who is
listed as a design professional is authorized by law to practice a
profession which the corporation is organized to practice and, if
applicable, that one or more of such individuals is authorized to
practice each profession which the corporation will be authorized to
practice. The attached certificate or certificates shall also certify
that the proposed president, the chairperson of the board of directors
and the chief executive officer or officers are authorized by law to
practice a profession which the corporation is organized to practice.

(ii) The certificate of amendment shall also have attached thereto a
certificate or certificates issued by the licensing authority certifying
that each of the proposed shareholders, officers, directors and owners
listed have been deemed to have been of good moral character as may be
established by the regulations of the commissioner of education.

(iii) The certificate of amendment shall also have attached thereto:
(A) a tax clearance issued by the department of taxation and finance
certifying that the existing professional service corporation is current
with respect to payment of its state tax liabilities and (B) a
certificate of good standing from the state education department
certifying that the existing professional service corporation is
authorized to provide professional services without restriction.

(b-6) (1) Prior to the first day of March, two thousand nineteen, the
state education department and the department of state shall allow an
existing business corporation organized under article four of this
chapter to become a professional service corporation as defined in this
article for the purpose of practicing professional geology, provided
that the surviving corporation meet all of the requirements to become a
professional service corporation, including that the name of a
professional service corporation shall end with the words "professional
corporation" or the abbreviation "P.C." by amending its certificate of
incorporation so that it contains the following:

(i) the names and residence addresses of all individuals who will be
the original shareholders, directors and officers of the professional
service corporation;

(ii) a statement that the professional service corporation is formed
pursuant to this section; and

(iii) a statement that the amendment shall not effect a dissolution of
the corporation, but shall be deemed a continuation of its corporate
existence, without affecting its then existing property rights or
liabilities or the liabilities of its members or officers as such, but
thereafter it shall have only such rights, powers and privileges, and be
subject only to such other duties and liabilities, as a corporation
created for the same purposes under this article.

(2) The certificate of amendment shall have attached thereto a
certificate or certificates issued by the licensing authority certifying
that each of the proposed shareholders, directors and officers listed:

(i) is authorized by law to practice a profession which the
corporation is organized to practice and, if applicable, that one or
more of such individuals is authorized to practice each profession which
the corporation will be authorized to practice; and

(ii) has been deemed to be of good moral character as may be
established by the regulations of the commissioner of education.

(3) The certificate of amendment shall also have attached thereto a
tax clearance issued by the department of taxation and finance
certifying that the existing business corporation is current with
respect to payment of its state tax liabilities.

(4) Notwithstanding any provision of law to the contrary, any
corporation formed under this section shall be required to comply with
all applicable laws, rules, or regulations relating to the practice of a
profession under title eight of the education law.

(b-7) (1) Prior to the first day of March, two thousand nineteen, the
state education department and the department of state shall allow an
existing business corporation organized under article four of this
chapter to become a design professional service corporation as defined
in this article for the purpose of practicing professional geology,
provided that the surviving corporation meet all of the requirements to
become a design professional service corporation, including that the
name shall end with the words "design professional service corporation"
or the abbreviation "D.P.C." by amending its certificate of
incorporation so that it contains the following:

(i) the names and residence addresses of all individuals or ESOPs who
will be the original shareholders, directors and officers of the
professional service corporation;

(ii) a statement that the design professional service corporation is
formed pursuant to this section;

(iii) the profession or profession of each shareholder, director and
officer who is a design professional of the original design professional
service corporation;

(iv) the names of the officers and directors who will be the
president, the chairperson of the board of directors and the chief
executive officer or officers of the original design professional
service corporation;

(v) the ownership interest of each shareholder of the original design
professional service corporation; and

(vi) a statement that the amendment shall not effect a dissolution of
the corporation, but shall be deemed a continuation of its corporate
existence, without affecting its then existing property rights or
liabilities or the liabilities of its members or officers as such, but
thereafter it shall have only such rights, powers and privileges, and be
subject only to such other duties and liabilities, as a corporation
created for the same purposes under this article.

(2) The certificate of amendment shall have attached thereto a
certificate or certificates issued by the licensing authority certifying
that each of the proposed shareholders, directors and officers listed:

(i) is authorized by law to practice a profession which the
corporation is organized to practice and, if applicable, that one or
more of such individuals is authorized to practice each profession which
the corporation will be authorized to practice; and

(ii) has been deemed to be of good moral character as may be
established by the regulations of the commissioner of education.

(3) The certificate of amendment shall also have attached thereto a
tax clearance issued by the department of taxation and finance
certifying that the existing business corporation is current with
respect to payment of its state tax liabilities.

(4) Notwithstanding any provision of law to the contrary, any
corporation formed under this section shall be required to comply with
all applicable laws, rules, or regulations relating to the practice of a
profession under title eight of the education law.

(c) A certified copy of the certificate of incorporation and of each
amendment thereto shall be filed by the corporation with the licensing
authority within thirty days after the filing of such certificate or
amendment with the department of state.

(d) A professional service corporation, including a design
professional service corporation, other than a corporation authorized to
practice law, shall be under the supervision of the regents of the
university of the state of New York and be subject to disciplinary
proceedings and penalties, and its certificate of incorporation shall be
subject to suspension, revocation or annulment for cause, in the same
manner and to the same extent as is provided with respect to individuals
and their licenses, certificates, and registrations in title eight of
the education law relating to the applicable profession. Notwithstanding
the provisions of this paragraph, a professional service corporation
authorized to practice medicine shall be subject to the prehearing
procedures and hearing procedures as is provided with respect to
individual physicians and their licenses in title II-A of article two of
the public health law.

(e) A corporation authorized to practice law shall be subject to the
regulation and control of, and its certificate of incorporation shall be
subject to suspension, revocation or annulment for cause by, the
appellate division of the supreme court and the court of appeals in the
same manner and to the same extent provided in the judiciary law with
respect to individual attorneys and counselors-at-law. Such corporation
need not qualify for any certification under section four hundred
sixty-four of the judiciary law, take an oath of office under section
four hundred sixty-six of such law or register under section four
hundred sixty-seven of such law.

(f) The order of suspension, revocation or annulment of the
certificate of incorporation of a professional service corporation
pursuant to paragraphs (d) and (e) of this section shall be effective
upon the filing of such order with the department of state.

(g) The practices of creative arts therapy, marriage and family
therapy, mental health counseling, and psychoanalysis shall not be
deemed the same professional service for the purpose of paragraph (a) of
this section, notwithstanding that such practices are all licensed under
article one hundred sixty-three of the education law.

* (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 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 professional 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 registered with the education department may include
non-licensee owners, a registered 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 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 or an affiliated entity.
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.

* NB Effective June 8, 2024