My friend and I would like to form a partnership in New York. However, since I am licensed I have to have a Professional Corporation (or a PLLC) but since he is not yet licensed he cannot be a partner and it seems that we cannot officially share the profits. Does anyone know how to get around this issue?
Reference Laws: http://www.op.nysed.gov/archguide-b1.htm
“Architectural services may be provided by:
…A partnership, in which all partners are licensed, at least one as an architect. The other partners may be licensed as a professional engineer, landscape architect or land surveyor. There is no provision in New York for interior designers to have any ownership in business entities providing architectural, landscape architectural, professional engineering or land surveying services.”
http://www.op.nysed.gov/corppractice.htm
“Professional licensees may not split fees:
Another important aspect of professional regulation deals with fee splitting and profit sharing. Licensed professionals or professional firms cannot share with other than members of their own professional firm the fees earned for providing professional services..."
This is an area where the services of a competent attorney are worth itheir weight in gold - hire a good lawyer to advise you on these matters. Practice laws can be quite complex - don't try to navigate them by yourself.
While you're at it, hire a good accountant too. If you can't afford good advisors, you probably can't afford to be in business for yourself anyway.
So only two architects can be partners, but not a business guy (say, with 5 MBAs) and an architect? No wonder this profession has been slipping.
I know no one here can answer, but I'd ask "what if my partner is not licensed, but will be soon?" That mean we have to dissolve the company? I'll have to talk to my lawyer about this....I am continually amused and frustrated at how efficient this profession is at stifling business development.
newp - I'll second getting a lawyer and accountant. We've set up a few llcs, using a lawyer for the most important of them (cost $750, if I recall correctly), then a simple online thing cost something like $50, but no one can answer questions.
My accountant easily earns his money too.
To follow up on this post i just wanted to add something I received in my inbox this morning regarding legeislation that is on the table regarding this
A.2060-B Canestrari / S.930-B LaValle
Corporate Practice of Design Professions
TO:
FROM: Edward C. Farrell, Executive Director
We are bringing your attention to an important AIANYS legislative initiative that has recently been amended in both the Senate and the Assembly.
Under current law, architectural, landscape architectural, engineering and land surveying firms (except for grandfathered corporations) must be owned 100% by licensed design professionals. This bill recognizes that these restrictive ownership provisions subject design professional firms to competitive disadvantages. If enacted, design professional firms would be allowed to offer key personnel such as business managers, human resource managers or computer information and other specialists an equity interest in the firm.
This legislation would allow licensed design professions to practice as a business corporation, up to 25% of which could be controlled by individuals not licensed under Title VIII of the Education Law. The bill would continue to require that all professional design work be carried out under the responsible design professional. Many states allow design professionals to form regular or business corporations. However, New York does not permit business corporate practice (with the exception of its grandfathered engineering corporations).
We ask that you contact your Member of the Assembly and Senate by clicking on the “Write a Message” below and send either the form letter, or you may send a custom letter. The AIANYS Advocacy Center will automatically link to your legislator’s email address. The whole process of generating and sending the form letter should only take a few minutes.
Connect to the AIA Advocacy Center by clicking here, or visit http://www.aia.org/gov and click on “contact your state officials”.
just a heads up for all those who expressed discontent regarding the established system of business ownership, at least for NYS
that 25% bit might not help small offices getting started though. sounds like quizz and OF have it covered. hire a lawyer, then if it looks kool, hire your buddy as senior staff.
New Partnership
My friend and I would like to form a partnership in New York. However, since I am licensed I have to have a Professional Corporation (or a PLLC) but since he is not yet licensed he cannot be a partner and it seems that we cannot officially share the profits. Does anyone know how to get around this issue?
Reference Laws:
http://www.op.nysed.gov/archguide-b1.htm
“Architectural services may be provided by:
…A partnership, in which all partners are licensed, at least one as an architect. The other partners may be licensed as a professional engineer, landscape architect or land surveyor. There is no provision in New York for interior designers to have any ownership in business entities providing architectural, landscape architectural, professional engineering or land surveying services.”
http://www.op.nysed.gov/corppractice.htm
“Professional licensees may not split fees:
Another important aspect of professional regulation deals with fee splitting and profit sharing. Licensed professionals or professional firms cannot share with other than members of their own professional firm the fees earned for providing professional services..."
Call him and interior decorator.....if he will lower his status in life.
This is an area where the services of a competent attorney are worth itheir weight in gold - hire a good lawyer to advise you on these matters. Practice laws can be quite complex - don't try to navigate them by yourself.
While you're at it, hire a good accountant too. If you can't afford good advisors, you probably can't afford to be in business for yourself anyway.
Good luck.
Wow, that makes absolutely no sense.
So only two architects can be partners, but not a business guy (say, with 5 MBAs) and an architect? No wonder this profession has been slipping.
I know no one here can answer, but I'd ask "what if my partner is not licensed, but will be soon?" That mean we have to dissolve the company? I'll have to talk to my lawyer about this....I am continually amused and frustrated at how efficient this profession is at stifling business development.
newp - I'll second getting a lawyer and accountant. We've set up a few llcs, using a lawyer for the most important of them (cost $750, if I recall correctly), then a simple online thing cost something like $50, but no one can answer questions.
My accountant easily earns his money too.
I agree with trace, that's BS.
To follow up on this post i just wanted to add something I received in my inbox this morning regarding legeislation that is on the table regarding this
A.2060-B Canestrari / S.930-B LaValle
Corporate Practice of Design Professions
TO:
FROM: Edward C. Farrell, Executive Director
We are bringing your attention to an important AIANYS legislative initiative that has recently been amended in both the Senate and the Assembly.
Under current law, architectural, landscape architectural, engineering and land surveying firms (except for grandfathered corporations) must be owned 100% by licensed design professionals. This bill recognizes that these restrictive ownership provisions subject design professional firms to competitive disadvantages. If enacted, design professional firms would be allowed to offer key personnel such as business managers, human resource managers or computer information and other specialists an equity interest in the firm.
This legislation would allow licensed design professions to practice as a business corporation, up to 25% of which could be controlled by individuals not licensed under Title VIII of the Education Law. The bill would continue to require that all professional design work be carried out under the responsible design professional. Many states allow design professionals to form regular or business corporations. However, New York does not permit business corporate practice (with the exception of its grandfathered engineering corporations).
We ask that you contact your Member of the Assembly and Senate by clicking on the “Write a Message” below and send either the form letter, or you may send a custom letter. The AIANYS Advocacy Center will automatically link to your legislator’s email address. The whole process of generating and sending the form letter should only take a few minutes.
Connect to the AIA Advocacy Center by clicking here, or visit http://www.aia.org/gov and click on “contact your state officials”.
just a heads up for all those who expressed discontent regarding the established system of business ownership, at least for NYS
that 25% bit might not help small offices getting started though. sounds like quizz and OF have it covered. hire a lawyer, then if it looks kool, hire your buddy as senior staff.
Illinois professional design firm which is in addition to incorporationm allows up to 33 percent non licenced.
Talk to atty to see if you can set up in another state w/ looser standards and be a forign company in NY.
SOM got into troubble when they moved their headquarterd fro chi town to NYC.
incorporate in Delaware (and don't forget to consult with an attorney)
They've just legalized gay marriage in California so if you move there you won't have to call it a partnership anymore.
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