Missouri Code of State Regulations
Title 20 - DEPARTMENT OF COMMERCE AND INSURANCE
Division 2010 - Missouri State Board of Accountancy
Chapter 2 - General Rules
Section 20 CSR 2010-2.095 - Ownership of CPA Firms
Universal Citation: 20 MO Code of State Regs 2010-2.095
Current through Register Vol. 49, No. 18, September 16, 2024
PURPOSE: 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; and
5. 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; and
5. 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; and
5. 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.
*Original authority: 326.262, RSMo 2001; 326.280, RSMo 2001 amended 2002; and 326.289, RSMo 2001; amended 2002, 2008.
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