Senate Passes CPA Firm Ownership Bill

By:
TRUSTED PROFESSIONAL STAFF
Published Date:
Jun 19, 2014

On June 10, the New York State Senate passed a bill, S4596B, that would allow New York-based CPA firms to offer minority ownership stakes to a wider range of top-level professionals, not just CPAs. 

Cosponsored by Sens. Kenneth P. Lavalle and Toby Ann Stavisky, the bill contains provisions that require CPAs to maintain a majority stake in the firm and prohibits any ownership stake by absentee individuals or corporate entities. Other public protection provisions in the bill include requiring a CPA with practice privileges to be responsible for firm registration and that a licensed CPA be the partner in charge of attest services. 

If adopted into law, New York would become the 48th state to allow for this type of firm structure, which provides an even playing field for CPA firms in New York. Currently, firms run the risk of losing clients in need of more comprehensive financial services to nearby out-of-state full-service firms that do allow this type of firm structure. Delaware and Hawaii are the only two states that do not have provisions in place allowing CPA firms to offer ownership stakes to non-licensee individuals. 

The Senate's sister bill in the Assembly, 9771A, cosponsored by Democratic Assemblymembers Felix Ortiz and Patricia Fahy, was introduced on May 22, and referred to the Higher Education Committee.

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