Application For A Limited Liability Company (Llc) License (Page 4 of 4) in pdf

NON-CPA OWNERSHIP OF LICENSED CPA FIRMS

Per recent amendments to M.G.L. c. 112, § 87B½, CPA firms (business corporations (BC), partnerships, LLPs

and LLCs) will be allowed to become licensed and admit non-CPAs as shareholders (and officers and directors),

partners or members (managers) provided that the following conditions exist:

1. That a simple majority of the ownership of the firm in terms of financial interests and voting rights

(control) of the firm belong to holders of a CPA certificate and current license.

2. All non-CPAs must be natural persons and actively involved in providing professional services for the

licensed entity or its affiliated entities.

3. The managing partner or agent of the firm must be a licensed CPA.

4. Non-CPA owners do not hold themselves out to the public as CPAs or sign reports on financial

statements.

The firm and its entire ownership, including non-CPA owners must comply with all other requirements

of 252 CMR (available at ).

In order to become licensed as a CPA firm (with two or more CPA owners), the managing partner will complete

the registration affidavit of the entity along with information regarding non-CPA owner(s) and their non-CPA

licenses, if applicable. In addition, the managing partner must include a written statement with each non-

CPA(s) individual’s name(s), the date of admission as a shareholder, partner or member and the managing

partner must also certify in this letter to the Board that each non-CPA partner:

1. Has not been convicted of a felony or any other crime, an element of which is dishonesty or fraud,

under the laws of any state of the United States or of any other jurisdiction if the acts committed

would constitute a crime under the laws of the Commonwealth; and

2. If applicable, (a) has not had any individual professional or vocational license or the right to practice

a profession or vocation revoked or suspended for reasons other than nonpayment of dues or fees,

or (b) does not have a pending disciplinary investigation, or (c) has not been denied reinstatement by

a licensing agency of any state or the United States, or of any other jurisdiction; and

3. Has not been in violation of any rule or regulation regarding character or conduct adopted in 252

CMR; and

Has not failed to timely file a report of the conditions set forth above as required by subparagraph 4

of M.G.L. c. 112, §87B½ (available at ).

At that point, the firm could become licensed utilizing one or all of the licensed CPAs names (two or more CPA

owners) and include the designation “and Company” or “and Associates” if they choose. These firms can also

utilize Certified Public Accountants or CPAs in the firm name. The Board will not allow CPA firms to use

fictitious names or the names of any non-CPA in the firm name.

For all CPAs who wish to register the CPA firm with non-CPA owners and only one licensed CPA owner, the

Board will only allow a business corporation to use the CPA shareholders’ name in the name of the firm. The

Board will only allow the CPA’s name and the designation “and Company” or “and Associates” if the firm

maintains at least one other CPA as a full-time employee. For partnerships, LLCs and LLPs with one CPA owner

of majority interest and one or more non-CPA owners of minority interest, these entities must also have at least

one full-time CPA as an employee to use designations as above. Each of these entities can only designate

themselves as Certified Public Accountant or use CPA in the firm name (example, G. Washington, CPA Inc. or

LLC or LLP; G. Washington, Inc, Certified Public Accountant). Otherwise, the CPA owner has to verify that there

is at least one CPA employee at registration of the firm (and at all times in the future) in order to use the

designation as a firm of CPAs.

Application For A Limited Liability Company (Llc) License Page 4