Mo. Code Regs. tit. 20 § 2010-2.095
Current through Register Vol. 49, No. 20, October 15, 2024
Section 20 CSR 2010-2.095 - Ownership of CPA FirmsPURPOSE: This rule clarifies the statutes pertaining to ownership of certified public accounting firms.
(1) Limited Liability Companies (L.L.C.). (A) Ownership. Only the following may have a member's interest in a L.L.C.:1. A majority ownership shall consist of natural persons who hold a license as a certified public account (CPA) to practice public accounting issued by this state, another state or territory of the United States or the District of Columbia, or any state, country or province of another country, or holds a foreign designation recognized by the board to be substantially equivalent if the other state or country or province of another country grants reciprocity licensure to holders of C PA licenses issued by this state. A minority ownership shall consist of natural persons who are active individual participants in the firm or affiliated entities. All ownership shall comply with section 326.289, RSMo, and all other provisions of Chapter 326, RSMo, and the board's rules;2. Domestic or foreign general partnerships, including limited liability partnerships, in which all of the partners who have a majority of ownership hold an active license as a C PA to practice public accounting issued by this state, another state or territory of the United States, the District of Columbia or any other country or state or province of another country, or holds a foreign designation recognized by the board to be substantially equivalent, if the other country or state or province of another country grants reciprocity licensure to holders of C PA licenses issued by this state. A minority ownership shall consist of natural persons who are active individual participants in the firm or affiliated entities;3. Professional corporations holding a permit to practice public accounting issued by this state or foreign professional corporations authorized by law in this state to practice public accounting. All shareholders of either a domestic or foreign professional corporation shall own their shares in their own right and shall be the beneficial owners of the equity capital ascribed to them;4. Limited liability companies (L.L.C.) holding a permit to practice public accounting issued by this state or foreign L.L.C. authorized by law in this state to practice public accounting, provided that all non-CPA members are active individual participants in the firm or affiliated entities. All members of either a domestic or foreign L.L.C. shall own their member's interest in their own right; and5. Trusts, created pursuant to revocable trust agreements, of which the trustee is a natural person who holds a license as a CPA to practice public accounting issued by this state, another state or territory of the United States or District of Columbia, provided that the trustee is also the settler and beneficiary of the trust during his or her lifetime. If there are multiple trustees, a majority shall hold a license as a C PA to practice public accounting issued by this state, another state or territory of the United States or the District of Columbia. Any trustees who are not licensed CPAs shall be active individual participants in the firm.(B) Transfer of Member's Interest. Provisions shall be made in the Articles of Organization or in Restated Articles of Organization and in any merger or consolidation document, which shall require that a member who, for whatever reasons, ceases to be eligible to be a member to dispose of all of his or her membership interest within a reasonable period of time to a person qualified to be a member or to the L.L.C.(2) Professional Corporations. (A) Ownership. A professional corporation may issue shares only to the following: 1. Natural persons who hold a current license as a C PA to practice public accounting issued by this state, another state or territory of the United States or the District of Columbia, or any other country or state or province of another country, or holds a foreign designation recognized by the board to be substantially equivalent, if the other country or state or province of another country grants reciprocity licensure to holders of a C PA license issued by this state. All ownership shall comply with section 326.289, RSMo, and all other provisions of Chapter 326, RSMo, and the board's rules;2. Domestic or foreign general partnerships, including limited liability partnerships, in which all of the partners hold a current license as a C PA to practice public accounting issued by this state, another state, or territory of the United States, the District of Columbia or any other country or state or province of another country, or holds a foreign designation recognized by the board to be substantially equivalent, if the other country or state or province of another country grants reciprocity licensure to holders of C PA licenses issued by this state;3. Professional corporations holding a permit to practice issued by this state or foreign professional corporations authorized by law in this state to practice public accounting. Shareholders at all times shall own their own shares in their own right and shall be the beneficial owners of the equity capital ascribed to them;4. Limited liability companies (L.L.C.) holding a permit to practice public accounting issued by this state or foreign L.L.C. authorized by law in this state to practice public accounting. All members of either a domestic or foreign L.L.C. shall own their member's interest in their own right; and5. Trusts, created pursuant to revocable trust agreements, of which the trustee is a natural person who holds a current license as a C PA to practice public accounting issued by this state, another state or territory of the United States or District of Columbia, provided that the trustee is also the settler and beneficiary of the trust during his or her lifetime. If there are multiple trustees, each shall hold a license to practice public accounting issued by this state, another state or territory of the United States or the District of Columbia.(B) Transfer of Shares. Provisions shall be made requiring any shareholder who ceases to be eligible to be a shareholder to dispose of all of his or her shares within a reasonable period to a person qualified to be a shareholder or to the corporation or association.(3) Partnerships and Limited Liability Partnerships (L.L.P.).(A) Ownership. A partnership or L.L.P. may issue ownership interest only to the following: 1. A majority ownership shall consist of natural persons who hold a license as a CPA to practice public accounting issued by this state, another state or territory of the United States or the District of Columbia, or any state, country or province of another country, or holds a foreign designation recognized by the board to be substantially equivalent, if the other country or state or province of another country grants reciprocity licensure to holders of C PA licenses by this state. A minority ownership shall consist of natural persons who are active individual participants in the firm or affiliated entities. All ownership shall comply with section 326.289, RSMo, and all other provisions of Chapter 326, RSMo, and the board's rules;2. Domestic or foreign general partnerships, including limited liability partnerships, in which all the partners who have a majority ownership hold an active license as a CPA to practice public accounting issued by this state, another state or territory of the United States, the District of Columbia, or any other country or state or province of another country, or holds a foreign designation recognized by the board to be substantially equivalent, if the other country or state or province of another country grants reciprocity licensure to holders of C PA licenses issued by this state. A minority ownership shall consist of natural persons who are active individual participants in the firm or affiliated entities;3. Professional corporations holding a permit to practice issued by this state or foreign professional corporations authorized by law in this state to practice public accounting. Shareholders of either a domestic or foreign professional corporation shall own their own shares in their own right and shall be the beneficial owners of the equity capital ascribed to them;4. Limited liability companies (L.L.C.) holding a permit to practice public accounting issued by this state or foreign L.L.C. authorized by law in this state to practice public accounting, provided that all non-CPA members are active individual participants in the firm or affiliated entities. All members of either a domestic or foreign L.L.C. shall own their member's interest in their own right; and5. Trusts, created pursuant to revocable trust agreements, of which the trustee is a natural person who holds a license as a CPA to practice public accounting issued by this state, another state or territory of the United States or District of Columbia, provided that the trustee is also the settler and beneficiary of the trust during his or her lifetime. If there are multiple trustees, a majority shall hold a license as a C PA to practice accounting issued by this state, another state or territory of the United States or the District of Columbia. Any trustees who are not licensed CPAs shall be active individual participants in the firm.(B) Transfer of Interest. Provisions shall be made in the Articles of Organization or in Restated Articles of Organization and in any merger or consolidated document, which shall require that a member who, for whatever reasons, ceases to be eligible to be a member to dispose of all of his or her membership within a reasonable period to a person qualified to be a member or to the L.L.C.(4) Sole Proprietorships. (A) The ownership of a sole proprietorship shall consist of a natural person who holds a license as a C PA to practice public accounting issued by this state, another state, or territory of the United States or the District of Columbia, or any state, country, or province of another country if the other state or country or province of another country grants reciprocity licensure to holders of C PA licenses issued by this state. All ownership shall comply with section 326.289, RSMo, and all other provisions of Chapter 326, RSMo, and the board's rules.(5) The provisions of this rule are declared severable. If any provision of this rule is held invalid by a court of competent jurisdiction, the remaining provisions of this rule shall remain in full force and effect, unless otherwise determined by a court of competent jurisdiction to be invalid. AUTHORITY: sections 326.262, 326.280, and 326.289, RSMo Supp. 2009.* This rule originally filed as 4 CSR 10-2.095. Original rule filed Aug. 31, 2000, effective Feb. 28, 2001. Amended: Filed April 5, 2004, effective July 30, 2004. Moved to 20 CSR 2010-2.095, effective Aug. 28, 2006. Amended: Filed Feb. 23, 2010, effective Aug. 30, 2010. *Original authority: 326.262, RSMo 2001; 326.280, RSMo 2001 amended 2002; and 326.289, RSMo 2001; amended 2002, 2008.