Section 87B1/2. The board shall grant or renew licenses to practice public accountancy to firms that make application and demonstrate their qualifications therefor in accordance with the following paragraphs:—
(a) Licenses shall be issued initially, and renewed, for periods of two years but in any event expiring on the last day of June of the next year following issuance or renewal. Applications for licenses shall be made in such form, and in the case of applications for renewal between such dates, as the board may by rule specify; and the board shall grant or deny any such application no later than ninety days after the application is filed in proper form. In any case where the applicant seeks the opportunity to show that issuance or renewal of a license was mistakenly denied, or where the board is not able to determine whether it should be granted or denied, the board may issue to the applicant a provisional license, which shall expire ninety days after its issuance or when the board determines whether or not to issue or renew the license for which application was made, whichever shall first occur.
(b)(1) An applicant for initial issuance of a license or for renewal of a permit to practice under this section shall be required to show, at a minimum, that:
(i) a simple majority of the ownership of the firm, in terms of financial interests and voting rights of all partners, officers, shareholders, members or managers, belongs to holders of a certificate who are licensed in any state;
(ii) a simple majority of the ownership of the firm, in terms of financial interests and voting rights of all partners, officers, shareholders, members or managers, belongs to holders of a certificate who are licensed in any state, and such partners, officers, shareholders, members or managers, whose principal place of business is in the commonwealth, and who practice public accountancy in the commonwealth and hold valid licenses issued by the board. The firm and its ownership, including nonlicensee owners, shall comply with rules promulgated by the board; and
(iii) the firm is organized as a partnership, including a registered limited liability partnership registered pursuant to the laws of the state of its organization, a limited liability company registered pursuant to the laws of the state of its organization, a professional corporation organized pursuant to the provisions of chapter 156A or that agrees to comply with all requirements of sections 10 to 12, inclusive, of said chapter 156A or a business corporation.
(2) A firm may include nonlicensee owners if:
(i) the firm designates a commonwealth licensee as its managing partner or agent, who shall be responsible for the proper registration of the firm and shall be identified to the board by the firm;
(ii) all nonlicensee owners are natural persons active in the firm or affiliated entities;
(iii) nonlicensee owners do not hold themselves out as certified public accountants or sign accountants’ reports on financial statements, unless such individuals qualify to engage in the practice of certified public accountancy pursuant to paragraph (2) of subsection (h) of section 87B; and
(iv) the firm and its ownership, including nonlicensee owners, comply with such other requirements as the board may impose.
(3) Except as permitted by the board in the exercise of its discretion, a person may not become a nonlicensee owner or remain a nonlicensee owner if such person:
(i) has been convicted of a felony or of 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; or
(ii) had a 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 if the person has voluntarily surrendered a professional or vocational license or the right to practice because of disciplinary charges or a pending disciplinary investigation and not reinstated by a licensing agency of any state or the United States, or of any other jurisdiction;
(iii) has been or is in violation of any rule or regulation regarding character or conduct adopted and promulgated by the board relating to nonlicensee owners; or
(iv) fails to timely file a report required by subparagraph (4).
(4) A nonlicensee owner of a licensee firm shall report to the board and the firm in writing of the occurrence of any of the events set forth in subparagraph (3) within 30 days of the date that the nonlicensee first has knowledge of the event. A conviction shall include the initial plea, verdict or finding of guilt, a plea of no contest or pronouncement of sentence by trial court even though the conviction may not be final until appeals are exhausted. The report shall be signed by the nonlicensee owner and shall set forth the facts that constitute the reportable event. The report shall identify, as appropriate, the event by the name of the agency or court, the title of the matter, the docket number and the date of the occurrence of the event. A firm shall report to the board within 30 days of its notice of any of the events set forth in said subparagraph (3) if no report has been filed by the nonlicensee owner.
(5) Application for registration by the firm shall be made upon the affidavit of a member of the partnership or the limited liability company, or officer, director or shareholder of the professional or business corporation depending upon the organizational form of the firm, who is a certified public accountant registered under section 87A1/2; and who holds a valid license issued under section 87B. The board shall in each case determine whether the applicant is eligible for registration. A firm which is so registered and which holds a valid license issued under this section may use the words “certified public accountants” or the abbreviation “CPA” in connection with its name. In the case of a partnership firm, notification shall be given to the board within 90 days after the admission to or withdrawal of a partner from any partnership so registered and after the commencement or termination of a partner’s personal and regular practice of public accounting in the commonwealth as a member thereof. In the case of a limited liability company firm, notification shall be given to the board within 90 days after the admission to or withdrawal of a member from any limited liability company so registered and after the commencement or termination of a member’s personal and regular practice of public accounting in the commonwealth as a member thereof. In the case of a firm organized as a corporation, notification shall be given to the board within 90 days after the admission to or withdrawal of an officer, director or shareholder from a corporation so registered and after the commencement or termination of an officer’s, director’s or shareholder’s personal and regular practice of public accounting in the commonwealth as a member thereof. The board shall collect a fee for the registration of each such firm.
(c) Each office of a firm within the commonwealth shall be registered with the board and shall be under the supervision of a person holding a valid license to practice issued under section 87B. Proof thereof shall be provided by each applicant for initial issuance or renewal of a license to practice under this section.
(d) The board shall issue an initial license or renewal upon payment of a fee.
(e) Applicants for initial issuance or renewal of licenses under this section shall in their application list all states in which they have applied for or hold licenses to practice public accountancy; and each holder of or applicant for a license under this section shall notify the board in writing, within thirty days after its occurrence, of any change in the identities of partners, members, officers, or shareholders who work within the commonwealth, any change in the number or location of offices within the commonwealth, any change in the identity of the persons in charge of such office, and any issuance, denial, revocation or suspension of a license by any other state.
[There are no paragraphs (f) to (h).]
(i) A business corporation engaged within the commonwealth in the practice of public accounting may register with the board as a corporation of certified public accountants; provided, however, that:
[There is no subparagraph (A).]
(1) natural persons who are licensed in the commonwealth or in any other state or territory of the United States or the District of Columbia to practice public accounting;
(2) general or registered limited liability partnerships in which all partners are natural persons described in clause (1);
(3) professional or other business corporations authorized by law to render public accounting services; and
(4) limited liability companies authorized by law to render public accounting services.
(B) No proxy for shares of such a business corporation shall be valid unless it shall be given to a qualified person. A voting trust with respect to shares of such a business corporation shall not be valid unless all the trustees and beneficiaries thereof are qualified persons, except that such voting trust may be validly continued for a period of not more than six months after the death of a trustee or beneficiary or for a period of not more than six months after a trustee or beneficiary has become a disqualified person.
(C)(1) It shall be provided in the articles of organization or by-laws of such a business corporation, or in an agreement binding upon all of its shareholders, that the corporation shall redeem all the shares of a shareholder upon the occurrence of any one or more of the following events, unless said shares are transferred to a qualified person within twelve months after occurrence of the event:
(i) if such shareholder dies;
(ii) if such shareholder is determined to be disqualified for a period of six months or more;
(iii) if such shareholder is determined in the manner set forth in the applicable instrument, to be incompetent or permanently disabled so as to be unable to render public accounting services on behalf of the corporation;
(iv) if any of the shares of such shareholder are transferred voluntarily or by operation of law to a disqualified person; or
(v) if any other event specified in the articles of organization or by-laws or said shareholder agreement shall occur.
(2) The redemption of shares shall take place within twelve months after the occurrence of any of the events described in subclause (1), unless a shorter time is specified in the articles of organization, by-laws or said shareholder agreement. The consideration for such redemption shall be an amount equal to the fair value of such shares on the dates of said event, unless otherwise provided in the articles of organization, by-laws or said shareholder agreement. In lieu of such redemption, all the shares of such shareholder may be transferred to a qualified person within such twelve month period.
(3) If a redemption or transfer of such shares of such a business corporation is not completed within the prescribed time period, such shares may be canceled by the corporation and the holder shall have no further interest or rights of a shareholder of the corporation other than the right to receive an amount equal to the fair value of such shareholder’s shares under clause (2), unless otherwise provided in the articles of organization, by-laws or said shareholder agreement.
(4) Nothing contained herein shall affect the obligations of such a business corporation to a shareholder whose interest in the corporation is terminated hereunder with respect to compensation, benefits or other matters accrued prior to such shareholder’s termination or disqualification.
(5) During the pendency of a redemption or transfer hereunder of the shares of a shareholder who is deceased, disabled or incompetent said shares may be voted by the personal representatives of such shareholder.
A regulating board may by rule further restrict the authority of a business corporation registering under this paragraph (i) to issue or transfer shares, but no such rule shall have the effect of causing a shareholder of such corporation at the time such rule becomes effective to become a disqualified person.
A shareholder of a business corporation registering under this paragraph (i) may transfer shares and rights or options to purchase shares of the corporation only to qualified persons, as defined herein; provided, however, that subject to subparagraph (C), nothing contained herein shall prohibit the pledge of shares of such corporation to a disqualified person or the transfer of such shares by operation of law or court decree to a disqualified person.
Nothing contained herein shall prevent a business corporation registering under this paragraph (i) from adopting other restrictions on the transfer of its shares or requiring that transferees be approved by its shareholders or directors under provisions of its articles of organization, by-laws or an agreement binding on all of its shareholders.
Every certificate issued representing shares of a business corporation registering under this paragraph (i) shall state thereon in bold print that the shares represented thereby are subject to restrictions on transfer imposed hereby and any further restrictions on transfer imposed by the appropriate regulating board or boards from time to time pursuant to this chapter.
Application for such registration shall be made upon the affidavit of an officer, director or shareholder of such corporation who is a certified public accountant registered under section eighty-seven A1/2 and who holds a valid biennial license issued under section eighty-seven B. The board shall in each case determine whether the applicant is eligible for registration.
A business corporation which is so registered and which holds a valid biennial license issued under section eighty-seven B1/2 may use the words “certified public accountants” or the abbreviation “CPA” in connection with its corporate name. Notification shall be given the board within ninety days after the admission to or withdrawal of an officer, director or shareholder from any business corporation so registered, and after the commencement or termination of any officer’s, director’s or shareholder’s personal and regular practice of public accounting in this state as a member thereof. The board shall collect a fee for the registration of such a business corporation.
(j) The board shall revoke the registration of a partnership, including a registered limited liability partnership, or limited liability company, or a professional or business corporation registered as certified public accountants under this section, or corresponding provisions of prior law or as public accountants under the laws of the commonwealth if at any time it does not have all the qualifications prescribed by the provisions of law under which it qualified for registration, and the board may revoke or suspend any such registration of a partnership, including a registered limited liability partnership or limited liability company, or a professional or business corporation or may revoke, suspend or refuse to renew any biennial license issued to such partnership, including a registered limited liability partnership, or limited liability company, or professional or business corporation so registered for any of the causes enumerated in section eighty-seven D and for the following additional causes:—
(1) the revocation or suspension of the certificate, registration or biennial license of any partner or any officer, director, shareholder, member or employee thereof;
(2) the cancellation, revocation, suspension or refusal to renew the authority of the partnership, including a registered limited liability partnership, or limited liability company, or the professional or business corporation or any partner or officer, director, shareholder, member or employee thereof to practice public accounting in any other state, for any cause other than failure to pay a registration fee in such another state.
Section: Previous 85A 86 87 87A 87A1/2 87A3/4 87B 87B1/2 87C 87C1/2 87D 87D1/2 87E 87E1/2 87F NextLast modified: September 11, 2015