(1) A person other than an individual shall not practice public accounting in this Commonwealth unless it:
(i) is a qualified association, has been granted a license to practice and satisfies the requirements of this section at all times while it is a licensee; or
(ii) meets the requirements of section 5.41 of this act.
(2) A new firm shall apply for its initial license within thirty days after its formation; thereafter, the firm's license shall be subject to renewal in accordance with section 8.22 of this act.
(3) A new firm must designate a licensee of this Commonwealth, or for a firm which practices pursuant to section 5.4 of this act, a licensee of another state who meets the requirements under section 5.23 of this act, who is responsible for the proper registration of the firm and who identifies that individual to the board.
(b) The initial and all renewal license applications by a firm shall include a statement that the firm is in compliance with subsections (d) and (e).
(c) An initial or renewal license shall not be issued to a firm after April 30, 2000, unless the firm complies with the requirements of section 8.94 of this act.
(d) A firm shall satisfy all of the following requirements:
(1) At least one general partner if the firm is a partnership, one record and beneficial owner of common shares if the firm is a corporation or one owner of a similar equity interest if the firm is any other form of qualified association shall be a certified public accountant or public accountant who is a licensee.
(2) Except as provided in subsections (e) and (f), each shareholder, partner, member or other owner of an equity interest in the firm must be the holder of a current license to practice public accounting as a certified public accountant or public accountant under the laws of this Commonwealth or another jurisdiction. This clause shall not:
(i) apply in the case of a person who withdraws from a firm for such period as may be reasonable under the circumstances to permit the firm to comply with this requirement; or
(ii) prohibit payments by a firm to a former equity owner or his estate in connection with his withdrawal from the firm.
(3) Attest activity rendered in this Commonwealth shall be under the charge of a certified public accountant or public accountant who is a licensee in this Commonwealth or another state.
(4) Deleted by 2016, Nov. 4, P.L. 1186, No. 157, § 3, effective in 60 days [Jan. 3, 2017].
(5) An individual who does not hold a current license to practice public accounting as a certified public accountant or public accountant in this Commonwealth or another state or foreign jurisdiction shall not assume ultimate responsibility for any attest activity.
(e) Notwithstanding any other provision of law, a qualified nonlicensee may own an equity interest in a firm if all of the following conditions are met:
(1) All of the qualified nonlicensees owning equity interests in the firm shall not:
(i) own in the aggregate equity interests in the firm entitling them to cast more than forty-nine percent of the votes on any issue or to receive more than forty-nine percent of any dividend or other distribution of profits or assets of the firm; or
(ii) constitute more than forty-nine percent in number of the owners of equity interests in the firm.
(2) The qualified nonlicensee shall not hold himself out as a certified public accountant or public accountant.
(3) The qualified nonlicensee shall be permitted to designate or refer to himself as a principal, owner, officer, member or shareholder of the firm. The qualified nonlicensee may also use such other titles as may be authorized by the regulations of the board.
(4) The qualified nonlicensee shall not:
(i) have pleaded guilty to, entered a plea of nolo contendere to or been found guilty or been convicted of a felony under the laws of this Commonwealth or any other jurisdiction; or
(ii) be in violation of any regulation of the board regarding the character or conduct of a qualified nonlicensee who is the owner of an equity interest in a firm.
(5) The participation of the qualified nonlicensee in the business of the firm must be the principal occupation of the individual and shall be in the nature of providing services to the firm or clients of the firm and not solely as an investor or in another commercial or passive capacity.
(6) The qualified nonlicensee has graduated with a baccalaureate or higher degree from a college or university approved at the time of graduation by the Department of Education.
(7) The qualified nonlicensee shall comply with all applicable provisions of this act and the regulations of the board.
(f) An equity interest in a firm may be owned indirectly but only if all of the ultimate, indirect beneficial owners of the equity interest are licensees.
(g) In accordance with the procedure referred to in section 95 of this act, the board may revoke the license to practice of a firm if at any time it is in violation of any of the provisions of this section.
Credits
1947, May 26, P.L. 318, No. 140, § 8.8, added 1996, Dec. 4, P.L. 851, No. 140, § 10, effective in 60 days. Amended 2008, July 9, P.L. 954, No. 73, § 7, effective in 60 days [Sept. 8, 2008]; 2016, Nov. 4, P.L. 1186, No. 157, § 3, effective in 60 days [Jan. 3, 2017].
