§ 1207 — Membership of professional service limited liability companies

New York § 1207

• Jurisdiction: New York
• Law LLC: Limited Liability Company Law
• Art. 12: Professional Service Limited Liability Companies

Text

§ 1207. Membership of professional service limited liability\ncompanies. (a) A member of a professional service limited liability\ncompany shall be only:\n (1) A professional, other than a foreign professional service\ncorporation, foreign professional service limited liability company or\nforeign limited liability partnership, authorized by law to practice in\nthis state a profession that such limited liability company is\nauthorized to practice and who is or has been engaged in the practice of\nsuch profession in such limited liability company or a predecessor\nentity, or who will engage in the practice of such profession in such\nlimited liability company within thirty days of the date such\nprofessional becomes a member;\n (2) A professional, other than a foreign professional service\ncorporation, foreign professional service limited liability company or\nforeign limited liability partnership, authorized by law to practice in\nany foreign jurisdiction a profession that such limited liability\ncompany is authorized to practice and who is or has been engaged in the\npractice of such profession in such limited liability company or a\npredecessor entity, or who will engage in the practice of such\nprofession in such limited liability company within thirty days of the\ndate such professional becomes a member; or\n (3) A foreign professional service corporation, foreign professional\nservice limited liability company or foreign limited liability\npartnership authorized by law to practice in this state or in any\nforeign jurisdiction a profession that such limited liability company is\nauthorized to practice and who is or has been engaged in the practice of\nsuch profession in such limited liability company or a predecessor\nentity, or who will engage in the practice of such profession in such\nlimited liability company within thirty days of the date such\nprofessional becomes a member.\n (b) With respect to a professional service limited liability company\nformed to provide medical services as such services are defined in\narticle 131 of the education law, each member of such limited liability\ncompany must be licensed pursuant to article 131 of the education law to\npractice medicine in this state. With respect to a professional service\nlimited liability company formed to provide dental services as such\nservices are defined in article 133 of the education law, each member of\nsuch limited liability company must be licensed pursuant to article 133\nof the education law to practice dentistry in this state. With respect\nto a professional service limited liability company formed to provide\nveterinary services as such services are defined in article 135 of the\neducation law, each member of such limited liability company must be\nlicensed pursuant to article 135 of the education law to practice\nveterinary medicine in this state. With respect to a professional\nservice limited liability company formed to provide professional\nengineering, land surveying, architectural, landscape architectural\nand/or geological services as such services are defined in article 145,\narticle 147 and article 148 of the education law, each member of such\nlimited liability company must be licensed pursuant to article 145,\narticle 147 and/or article 148 of the education law to practice one or\nmore of such professions in this state. With respect to a professional\nservice limited liability company formed to provide public accountancy\nservices as such services are defined in article 149 of the education\nlaw each member of such limited liability company whose principal place\nof business is in this state and who provides public accountancy\nservices, must be licensed pursuant to article 149 of the education law\nto practice public accountancy in this state. With respect to a\nprofessional service limited liability company formed to provide\nlicensed clinical social work services as such services are defined in\narticle 154 of the education law, each member of such limited liability\ncompany shall be licensed pursuant to article 154 of the education law\nto practice licensed clinical social work in this state. With respect to\na professional service limited liability company formed to provide\ncreative arts therapy services as such services are defined in article\n163 of the education law, each member of such limited liability company\nmust be licensed pursuant to article 163 of the education law to\npractice creative arts therapy in this state. With respect to a\nprofessional service limited liability company formed to provide\nmarriage and family therapy services as such services are defined in\narticle 163 of the education law, each member of such limited liability\ncompany must be licensed pursuant to article 163 of the education law to\npractice marriage and family therapy in this state. With respect to a\nprofessional service limited liability company formed to provide mental\nhealth counseling services as such services are defined in article 163\nof the education law, each member of such limited liability company must\nbe licensed pursuant to article 163 of the education law to practice\nmental health counseling in this state. With respect to a professional\nservice limited liability company formed to provide psychoanalysis\nservices as such services are defined in article 163 of the education\nlaw, each member of such limited liability company must be licensed\npursuant to article 163 of the education law to practice psychoanalysis\nin this state. With respect to a professional service limited liability\ncompany formed to provide applied behavior analysis services as such\nservices are defined in article 167 of the education law, each member of\nsuch limited liability company must be licensed or certified pursuant to\narticle 167 of the education law to practice applied behavior analysis\nin this state. A professional service limited liability company formed\nto lawfully engage in the practice of public accountancy as a firm, as\nsuch practice is defined under article 149 of the education law shall be\nrequired to show (1) that a simple majority of the ownership of the\nfirm, in terms of financial interests and voting rights held by the\nfirm's owners, belongs to individuals licensed to practice public\naccountancy in some state, and (2) that all members of a limited\nprofessional service limited liability company, whose principal place of\nbusiness is in this state, and who are engaged in the practice of public\naccountancy in this state, hold a valid license issued under section\nseventy-four hundred four of the education law. For purposes of this\nsubdivision, "financial interest" means capital stock, capital accounts,\ncapital contributions, capital interest, or interest in undistributed\nearnings of a business entity. Although firms registered with the\neducation department may include non-licensee owners, a registered firm\nand its owners must comply with rules promulgated by the state board of\nregents. Notwithstanding the foregoing, a firm registered with the\neducation department may not have non-licensee owners if the firm's name\nincludes the words "certified public accountant," or "certified public\naccountants," or the abbreviations "CPA" or "CPAs". Each non-licensee\nowner of a firm that is registered under this section shall be (1) a\nnatural person who actively participates in the business of the firm or\nits affiliated entities, or (2) an entity, including, but not limited\nto, a partnership or professional corporation, provided each beneficial\nowner of an equity interest in such entity is a natural person who\nactively participates in the business conducted by the firm or its\naffiliated entities. For purposes of this subdivision, "actively\nparticipate" means to provide services to clients or to otherwise\nindividually take part in the day-to-day business or management of the\nfirm or an affiliated entity.\n (c) No member of a professional service limited liability company\nshall enter into a voting trust agreement, proxy or any other type of\nagreement vesting in another person, other than another member of such\nlimited liability company or professional who would be eligible to\nbecome a member of such limited liability company, the authority to\nexercise voting power of any or all of the membership interests of such\nlimited liability company. All membership interests or proxies granted\nor agreements made in violation of this section shall be void.\n