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A01052 Summary:

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A01052 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          1052
 
                               2013-2014 Regular Sessions
 
                   IN ASSEMBLY
 
                                       (Prefiled)
 
                                     January 9, 2013
                                       ___________
 
        Introduced  by M. of A. LUPARDO -- read once and referred to the Commit-
          tee on Higher Education
 
        AN ACT to amend the business corporation  law,  in  relation  to  design
          professional service corporations
 
          The  People of the State of New York, represented in Senate and Assem-

        bly, do enact as follows:
 
     1    Section 1. Section 1501 of the business corporation law, as amended by
     2  chapter 550 of the laws of 2011, is amended to read as follows:
     3  [§ 1501. Definitions.
     4    As used in this article, unless the context  otherwise  requires,  the
     5  term:  (a)  "licensing authority" means the regents of the university of
     6  the state of New York or the state education department, as the case may
     7  be, in the case of all professions licensed under  title  eight  of  the
     8  education  law,  and  the  appropriate appellate division of the supreme
     9  court in the case of the profession of law.
    10    (b) "Profession" includes any practice as an attorney  and  counselor-
    11  at-law,  or as a licensed physician, and those occupations designated in

    12  title eight of the education law.
    13    (c) "Professional service" means any type of  service  to  the  public
    14  which  may  be  lawfully rendered by a member of a profession within the
    15  purview of his profession.
    16    (d) "Professional service corporation" means a  corporation  organized
    17  under this article.
    18    (e) "Design  professional  service  corporation"  means  a corporation
    19  organized under this article practicing professional engineering, archi-
    20  tecture, landscape architecture, or land surveying,  or  practicing  any
    21  combination  of  such  professions,  first organized on or after January
    22  first, two thousand twelve. The provisions of this article applicable to

    23  professional service corporations shall  apply  to  design  professional
    24  service  corporations  except to the extent that any provision is either

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD04914-01-3
        A. 1052                             2

     1  inconsistent with a provision expressly applying to design  professional
     2  service corporations or not relevant thereto.
     3    (f)  "Design professional" means an individual licensed and registered
     4  pursuant to title eight of the education law  to  practice  professional
     5  engineering, architecture, landscape architecture or land surveying.

     6    (g)  "Employee  stock  ownership plan" (ESOP) means a defined contrib-
     7  ution plan established pursuant to Section 4975(e)(7)  of  the  Internal
     8  Revenue Code.
     9    (h) "Officer" does not include the secretary or an assistant secretary
    10  of a corporation having only one shareholder.]
    11    § 2. Section 1501 of the business corporation law, as amended by chap-
    12  ter 564 of the laws of 2011, is amended to read as follows:
    13  § 1501. Definitions.
    14    As  used  in  this article, unless the context otherwise requires, the
    15  term: (a) "licensing authority" means the regents of the  university  of
    16  the state of New York or the state education department, as the case may
    17  be,  in  the  case  of all professions licensed under title eight of the
    18  education law, and the appropriate appellate  division  of  the  supreme

    19  court in the case of the profession of law.
    20    (b) "Profession"  includes  any practice as an attorney and counselor-
    21  at-law, or as a licensed physician, and those occupations designated  in
    22  title eight of the education law.
    23    (c) "Professional  service"  means  any  type of service to the public
    24  which may be lawfully rendered by a member of a  profession  within  the
    25  purview of his or her profession.
    26    (d) "Professional  service  corporation" means a corporation organized
    27  under this article.
    28    (e) "Officer" does not include the secretary or an assistant secretary
    29  of a corporation having only one shareholder.
    30    (f) "Other business entity" means any  person  other  than  a  natural
    31  person,  general  partnership  or  a domestic or foreign business corpo-
    32  ration, and includes a professional service  limited  liability  company

    33  formed  pursuant  to  the  provisions  of the New York limited liability
    34  company law.
    35    (g) "Design professional  service  corporation"  means  a  corporation
    36  organized under this article practicing professional engineering, archi-
    37  tecture,  landscape  architecture,  or land surveying, or practicing any
    38  combination of such professions. The provisions of this article applica-
    39  ble to professional service corporations shall apply to  design  profes-
    40  sional  service  corporations except to the extent that any provision is
    41  either inconsistent  with  a  provision  expressly  applying  to  design
    42  professional service corporations or not relevant thereto.
    43    (h)  "Design professional" means an individual licensed and registered

    44  pursuant to title eight of the education law  to  practice  professional
    45  engineering, architecture, landscape architecture or land surveying.
    46    (i)  "Employee  stock  ownership plan" (ESOP) means a defined contrib-
    47  ution plan established pursuant to Section 4975(e)(7)  of  the  Internal
    48  Revenue Code.
    49    §  3. Paragraph (b-5) of section 1503 of the business corporation law,
    50  as added by chapter 467 of the laws of  2012,  is  amended  to  read  as
    51  follows:
    52    (b-5) On or after January first, two thousand twelve, the state educa-
    53  tion  department  and  the  department  of state shall allow an existing
    54  professional service corporation [in good standing] organized under this
    55  article and practicing professional engineering, architecture, landscape

    56  architecture, or land surveying, or practicing any combination  of  such
        A. 1052                             3
 
     1  professions  to [convert to] become a design professional service corpo-
     2  ration as defined in this article, provided  the  [design]  professional
     3  service  corporation  meets  all  of the requirements to become a design
     4  professional service corporation, including that its name shall end with
     5  the   words   "design  professional  corporation"  or  the  abbreviation
     6  "D.P.C.", by amending  its  certificate  of  incorporation  so  that  it
     7  contains the following statements:
     8    (1)  the names and residence addresses of all individuals or ESOPs who
     9  will be the shareholders, directors and officers of the original  design

    10  professional service corporation; and
    11    (2)  the  profession  or professions of each shareholder, director and
    12  officer who is a design professional of the original design professional
    13  service corporation; and
    14    (3) the ownership interest of each shareholder of the original  design
    15  professional service corporation; and
    16    (4) the names of the officers and directors who will be the president,
    17  the  chairperson of the board of directors and the chief executive offi-
    18  cer or officers of the original design professional service corporation.
    19    (i) The certificate of amendment shall have attached thereto a certif-
    20  icate or certificates issued by the licensing authority certifying  that

    21  each  of the proposed shareholders, directors and officers who is listed
    22  as a design professional is authorized by law to practice  a  profession
    23  which  the corporation is organized to practice and, if applicable, that
    24  one or more of such individuals is authorized to practice  each  profes-
    25  sion  which the corporation will be authorized to practice. The attached
    26  certificate or certificates shall also certify that the proposed  presi-
    27  dent,  the chairperson of the board of directors and the chief executive
    28  officer or officers are authorized by law to practice a profession which
    29  the corporation is organized to practice.
    30    (ii) The certificate of amendment shall also have attached  thereto  a

    31  certificate or certificates issued by the licensing authority certifying
    32  that  each  of the proposed shareholders, officers, directors and owners
    33  listed have been deemed to have been of good moral character as  may  be
    34  established by the regulations of the commissioner of education.
    35    (iii)  The  certificate of amendment shall also have attached thereto:
    36  (A) a tax clearance issued by the department  of  taxation  and  finance
    37  certifying that the existing professional service corporation is current
    38  with  respect  to payment of its state tax liabilities and (B) a certif-
    39  icate of good standing from the state  education  department  certifying
    40  that  the  existing  professional  service  corporation is authorized to

    41  provide professional services without restriction.
    42    § 4. This act shall take effect immediately and  shall  be  deemed  to
    43  have been in full force and effect on and after October 3, 2012.