Section 288-11-001 - Definitions001.01 For purposes of these rules, "actively participate" means the providing of personal services in the business entity licensed in Nebraska to practice public accounting, in the nature of management, performance of services for clients, or similar activities. Non-natural persons and individuals whose primary source of income from the business entity is provided as a result of passive investment will not be considered as actively participating in the business entity.001.02 For purposes of these rules, an "owner" is defined as a person who directly or indirectly (a) has an interest in profits and losses of such business entity, or (b) owns all, or any portion, of the equity capital of such business entity, or (c) has a vote with respect to matters of such business entity.001.03 For purposes of these rules, a "principal" is defined as an owner who actively participates in a business entity licensed in Nebraska to practice public accounting, and who is not licensed in this state or any other state or jurisdiction as a certified public accountant.001.04 For purposes of these rules, "profits and losses" are defined as the net taxable income or loss, determined prior to payment of any form of compensation to owners, of a business entity licensed in Nebraska to practice public accounting.001.05 For purposes of these rules, "equity capital" is defined as (a) capital stock, capital accounts, capital contributions, or undistributed earnings of a business entity licensed in Nebraska to practice public accounting; and (b) loans and advances to a business entity licensed in Nebraska to practice public accounting, made or held by its owners. "Equity capital" does not include an interest in bonuses, profit sharing plans or defined benefit plans or loans to a business entity licensed in Nebraska to practice public accounting from banks, financial institutions or other third parties that do not actively participate in such business entity.001.06 For purposes of these rules, a "business entity" is defined as a proprietorship, partnership, professional corporation, limited liability company or any other permissible form of practice which is licensed in Nebraska to practice public accounting.001.07 For purposes of these rules and the Public Accountancy Act, "holding themselves out to the general public" is intended to encompass those situations dealing primarily with the promoting, marketing, and practice of public accountancy with clients and potential clients. It is not intended to encompass business and similar situations where disclosure of one's status as an owner, partner, shareholder, limited liability company member, director or otherwise would not be in violation of the general intent of these rules and is reasonable or necessary under the circumstances of a particular situation or business transaction.288 Neb. Admin. Code, ch. 11, § 001
Amended effective 9/22/2019