NEW NYS LAW CHANGE ALLOWS NON-LICENSEE OWNERSHIP IN A DESIGN PROFESSIONAL CORPORATION

JANUARY 20, 2012

Prior to January 1, 2012, the ownership of registered limited liability partnerships (RLLP), professional service limited liability companies (PLLC), and professional service corporations (PC) in New York has been restricted to design professionals licensed and registered pursuant to the New York State Education Law. Specifically these professions include architecture, landscape architecture, engineering, and land surveying.  

However, as of January 1, 2012, chapter 550 of the Laws of 2011 amends the Business Corporation Law and the Education Law to authorize a new type of professional service corporation to be known as a "design professional service corporation", or "D.P.C." Unlike existing business structures, design professional service corporations will have the flexibility of offering an ownership interest in the corporation to non-licensees. Chapter 550 also requires that greater than 75% of the stock be owned by design professionals, that greater than 75% of the directors and officers be licensed and registered design professionals, and that the largest single shareholder be a licensed and registered design professional or, with certain restrictions as discussed in item 6 below, an Employee Stock Ownership Plan (ESOP). The president, chief executive officer and the chair of the board of directors also must be licensed and registered design professionals.  

Please note: The ownership of RLLP's, PLLC's, and PC's providing architecture, landscape architecture, engineering and/or land surveying services will still be restricted to those who are licensed and registered in the profession(s) of architecture, landscape architecture, engineering and land surveying. In order to allow non-licensees to have an ownership interest, a D.P.C. must be formed.  

For further information on D.P.C.'s, please see the Office of the Professions website at http://www.op.nysed.gov/corp/pcorpdpc.htm "

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