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Form of Practice 

GENERAL CORPORATE FORM (GC), LIMITED LIABILITY COMPANIES (LLC), REGISTERED LIMITED LIABILITY PARTNERSHIPS (LLP) AND AMENDMENTS TO PROFESSIONAL CORPORATION (PC) LAWS

ISSUE:  Whether states should allow CPAs to organize in legal forms other than proprietorships, partnerships and PCs and whether states should amend PC laws in order to make PCs more attractive to a larger number of CPA firms.
  

BACKGROUND:  Because of the 1992 AICPA membership vote to change Rule 505, which allows members to practice under any legal form of organization, states have worked to enact legislation to create LLCs, LLPs and to allow CPAs to practice in general corporations.  The purpose of the rule change was to allow for the creation of more organizational options for CPA firms, because practice in general corporate form or as an LLC or LLP may provide advantages to practitioners.  A nation-wide effort to draft LLC legislation was spearheaded by the American Bar Association. 
  
WHY IT’S IMPORTANT TO CPAs:  
LLCs and general corporations may provide benefits in terms of increased protection from tort and contract claims and LLCs may also limit tax liability.  Registered limited liability partnerships (LLPs) may limit liability of innocent partners for acts and omissions of other partners.  In general, the members of an LLC are not personally liable for the debts of the LLC, and a state's LLC law may provide more liability protection than the state PC law.  In addition, the IRS has ruled that LLCs may be treated as partnerships for federal income tax purposes.  Important considerations in drafting LLC legislation include: 1) that the proposal authorize professionals to use LLCs; 2) that the bill limit liability of LLC members, managers, employees and agents; 3) that it provide for organizational flexibility for professional LLCs; and 4) that it include provisions that adequately allow for interstate practice for professional LLCs.

Before CPA firms may operate as LLCs, LLPs or general corporations, it may be necessary to amend the state accountancy law and the state's accountancy regulations.  In addition, many state PC laws contain provisions that limit their utility for CPAs, especially multi-state firms.
  
AICPA POSITION:  
Since the 1992 membership vote that changed Rule 505, the Institute has strongly supported the efforts of state societies to work for passage of LLC and LLP legislation and to allow CPAs to form general corporations.  In addition, the AICPA encourages states to modify accountancy statutes and regulations to allow practitioners to take advantage of the Rule 505 change.
  
STATE ACTION:  
Fifty-one jurisdictions have passed LLC legislation. In addition, 53 jurisdictions have passed LLP legislation. At least two states have passed bills to allow CPAs to form general corporations. Also, 43 states have amended their accountancy statute to provide for these forms of practice. 
 
AICPA STAFF CONTACTS:  
Virgil Webb, General Counsel and Trial Board, 202/434-9222
 

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Continuing Professional Education (CPE) for Certified Public Accountants (CPAs)

Issue Brief:  Issue brief on whether those who obtain a CPA certificate should be required to participate in continuing professional education in order to maintain a license or certificate. Learn more about CPE for certified public accountants (CPAs).
Published on May 14, 2013

CPA Exam Presentation for Candidates 2012

Primer:  2012 CPA Exam overview presentation for candidates.
Published on May 14, 2013

State Regulatory and Legislative Affairs

Overview:  The AICPA State Regulation and Legislation Team advocates for the accounting profession at the state level by partnering with the state CPA societies. The team monitors trends on key state legislative and regulatory issues at the national level and serves as an information clearinghouse and resource provider, offering information related
Published on May 14, 2013

Statement on Standards for Continuing Professional Education (CPE) Programs - PDF

Professional Standards:  The jointly published Standards provide a framework for the development, presentation, measurement and reporting of CPE programs.
Published on May 08, 2013

North Carolina State Resources and Contact Information

Link:  North Carolina state resources in the areas of accountancy, government, study, and taxes.
Published on May 08, 2013

District of Columbia Resources and Contact Information

Link:  District of Columbia resources in the areas of accountancy, government, study, and taxes.
Published on April 23, 2013

Wyoming State Resources and Contact Information

Link:  Wyoming state resources in the areas of accountancy, government, study, and taxes.
Published on April 23, 2013

Virgin Islands Resources and Contact Information

Link:  Virgin Islands resources in the areas of accountancy, government, study, and taxes.
Published on April 23, 2013

New Hampshire State Resources and Contact Information

Link:  New Hampshire state resources in the areas of accountancy, government, study, and taxes.
Published on April 23, 2013

State Regulation and Legislation Team Contact

Directory:  Find contact information for AICPA staff in on the State Regulatory and Legislative Affairs team.
Published on April 15, 2013

State Regulatory and Legislative Affairs Team Contact Sheet

Directory:  State Regulatory and Legislative Affairs Team Contact Sheet
Published on April 15, 2013

State Regulatory Webcast - June 2011

Conference Materials:  Powerpoint presentation from June 2011 State board Webinar on peer review, codification update and IRS Tax preparer.
Published on April 02, 2013

Illinois State Resources and Contact Information

Link:  Illinois state resources in the areas of accountancy, government, study, and taxes.
Published on March 27, 2013

Texas State Resources and Contact Information

Link:  Texas state resources in the areas of accountancy, government, study, and taxes.
Published on March 19, 2013

Washington State Resources and Contact Information

Link:  Washington state resources in the areas of accountancy, government, study, and taxes.
Published on March 06, 2013

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