N.Y. Partnership Law § 121-1500: Registered limited liability partnership

§ 121-1500. Registered limited liability partnership. (a)(I)

Notwithstanding the education law or any other provision of law, (i) a

partnership without limited partners each of whose partners is a

professional authorized by law to render a professional service within

this state and who is or has been engaged in the practice of such

profession in such partnership or a predecessor entity, or will engage

in the practice of such profession in the registered limited liability

partnership within thirty days of the date of the effectiveness of the

registration provided for in this subdivision or a partnership without

limited partners each of whose partners is a professional, at least one

of whom is authorized by law to render a professional service within

this state and who is or has been engaged in the practice of such

profession in such partnership or a predecessor entity, or will engage

in the practice of such profession in the registered limited liability

partnership within thirty days of the date of the effectiveness of the

registration provided for in this subdivision, (ii) a partnership

without limited partners authorized by, or holding a license,

certificate, registration or permit issued by the licensing authority

pursuant to the education law to render a professional service within

this state, which renders or intends to render professional services

within this state, or (iii) a related limited liability partnership may

register as a registered limited liability partnership by filing with

the department of state a registration which shall set forth:

(1) the name of the registered limited liability partnership;

(2) the address of the principal office of the partnership without

limited partners;

(3) the profession or professions to be practiced by such partnership

without limited partners and a statement that it is eligible to register

as a registered limited liability partnership pursuant to subdivision

(a) of this section;

(4) a designation of the secretary of state as agent of the

partnership without limited partners upon whom process against it may be

served and the post office address within or without this state to which

the secretary of state shall mail a copy of any process against it or

served upon it. The partnership without limited partners may include an

email address to which the secretary of state shall email a notice of

the fact that process against it has been electronically served upon him

or her;

(5) if the partnership without limited partners is to have a

registered agent, its name and address in this state and a statement

that the registered agent is to be the agent of the partnership without

limited partners upon whom process against it may be served;

(6) that the partnership without limited partners is filing a

registration for status as a registered limited liability partnership;

(7) if the registration of the partnership without limited partners is

to be effective on a date later than the time of filing, the date, not

to exceed sixty days from the date of such filing, of such proposed

effectiveness;

(8) if all or specified partners of the registered limited liability

partnership are to be liable in their capacity as partners for all or

specified debts, obligations or liabilities of the registered limited

liability partnership as authorized pursuant to subdivision (d) of

section twenty-six of this chapter, a statement that all or specified

partners are so liable for such debts, obligations or liabilities in

their capacity as partners of the registered limited liability

partnership as authorized pursuant to subdivision (d) of section

twenty-six of this chapter; and

(9) any other matters the partnership without limited partners

determines to include in the registration.

(II) (A) Within one hundred twenty days after the effective date of

the registration, a copy of the same or a notice containing the

substance thereof shall be published once in each week for six

successive weeks, in two newspapers of the county in which the principal

office of the registered limited liability partnership is located in

this state, one newspaper printed weekly and one newspaper to be printed

daily, to be designated by the county clerk. When such county is located

within a city with a population of one million or more, such designation

shall be as though the copy or notice were a notice or advertisement of

judicial proceedings. Proof of the publication required by this

subparagraph, consisting of the certificate of publication of the

registered limited liability partnership with the affidavits of

publication annexed thereto, must be filed, with a fee of fifty dollars,

with the department of state. Notwithstanding any other provision of

law, if the office of the registered limited liability partnership is

located in a county wherein a weekly or daily newspaper of the county,

or both, has not been so designated by the county clerk, then the

publication herein required shall be made in a weekly or daily newspaper

of any county, or both, as the case may be, which is contiguous to, such

county, provided that any such newspaper meets all the other

requirements of this subparagraph. A copy or notice published in a

newspaper other than the newspaper or newspapers designated by the

county clerk shall not be deemed to be one of the publications required

by this paragraph. The notice shall include: (1) the name of the

registered limited liability partnership; (2) the date of filing of the

registration with the department of state; (3) the county within this

state, in which the principal office of the registered limited liability

partnership is located; (3-a) the street address of the principal

business location, if any; (4) a statement that the secretary of state

has been designated as agent of the registered limited liability

partnership upon whom process against it may be served and the post

office address within or without this state to which the secretary of

state shall mail a copy of any process against it served upon him or

her; (5) if the registered limited liability partnership is to have a

registered agent, his or her name and address within this state and a

statement that the registered agent is to be the agent of the registered

limited liability partnership upon whom process against it may be

served; (6) if the registered limited liability partnership is to have a

specific date of dissolution in addition to the events of dissolution

set forth in section sixty-two of this chapter, the latest date upon

which the registered limited liability partnership is to dissolve; and

(7) the character or purpose of the business of such registered limited

liability partnership. Where, at any time after completion of the first

of the six weekly publications required by this subparagraph and prior

to the completion of the sixth such weekly publication, there is a

change in any of the information contained in the copy or notice as

published, the registered limited liability partnership may complete the

remaining publications of the original copy or notice, and the

registered limited liability partnership shall not be required to

publish any further or amended copy or notice. Where, at any time after

completion of the six weekly publications required by this subparagraph,

there is a change to any of the information contained in the copy or

notice as published, no further or amended publication or republication

shall be required to be made. If within one hundred twenty days after

its formation, proof of such publication, consisting of the certificate

of publication of the registered limited liability partnership with the

affidavits of publication of the newspapers annexed thereto has not been

filed with the department of state, the authority of such registered

limited liability partnership to carry on, conduct or transact any

business in this state shall be suspended, effective as of the

expiration of such one hundred twenty day period. The failure of a

registered limited liability partnership to cause such copy or notice to

be published and such certificate of publication and affidavits of

publication to be filed with the department of state within such one

hundred twenty day period or the suspension of such registered limited

liability partnership's authority to carry on, conduct or transact

business in this state pursuant to this subparagraph shall not limit or

impair the validity of any contract or act of such registered limited

liability partnership, or any right or remedy of any other party under

or by virtue of any contract, act or omission of such registered limited

liability partnership, or the right of any other party to maintain any

action or special proceeding on any such contract, act or omission, or

right of such registered limited liability partnership to defend any

action or special proceeding in this state, or result in any partner or

agent of such registered limited liability partnership becoming liable

for the contractual obligations or other liabilities of the registered

limited liability partnership. If, at any time following the suspension

of a registered limited liability partnership's authority to carry on,

conduct or transact business in this state pursuant to this

subparagraph, such registered limited liability partnership shall cause

proof of publication in substantial compliance with the provisions

(other than the one hundred twenty day period) of this subparagraph,

consisting of the certificate of publication of the registered limited

liability partnership with the affidavits of publication of the

newspapers annexed thereto, to be filed with the department of state,

such suspension of such registered limited liability partnership's

authority to carry on, conduct or transact business shall be annulled.

(B)(1) A registered limited liability partnership which was formed

prior to the effective date of this subparagraph and which complied with

the publication and filing requirements of this paragraph as in effect

prior to such effective date shall not be required to make any

publication or republication or any filing under subparagraph (A) of

this paragraph, and shall not be subject to suspension pursuant to this

paragraph.

(2) Within twelve months after the effective date of this

subparagraph, a registered limited liability partnership which was

formed prior to such effective date and which did not comply with the

publication and filing requirements of this paragraph as in effect prior

to such effective date shall publish a copy of its registration or a

notice containing the substance thereof in the manner required (other

than the one hundred twenty day period) by this paragraph as in effect

prior to such effective date and file proof of such publication,

consisting of the certificate of publication of the registered limited

liability partnership with the affidavits of publication of the

newspapers annexed thereto, with the department of state.

(3) If a registered limited liability partnership that is subject to

the provisions of clause two of this subparagraph fails to file the

required proof of publication with the department of state within twelve

months after the effective date of this subparagraph, its authority to

carry on, conduct or transact any business in this state shall be

suspended, effective as of the expiration of such twelve month period.

(4) The failure of a registered limited liability partnership that is

subject to the provisions of clause two of this subparagraph to fully

comply with the provisions of said clause two or the suspension of such

registered limited liability partnership's authority to carry on,

conduct or transact any business in this state pursuant to clause three

of this subparagraph shall not impair or limit the validity of any

contract or act of such registered limited liability partnership, or any

right or remedy of any other party under or by virtue of any contract,

act or omission of such registered limited liability partnership, or the

right of any other party to maintain any action or special proceeding on

any such contract, act or omission, or right of such registered limited

liability partnership to defend any action or special proceeding in this

state, or result in any partner or agent of such registered limited

liability partnership becoming liable for the contractual obligations or

other liabilities of the registered limited liability partnership.

(5) If, at any time following the suspension of a registered limited

liability partnership's authority to carry on, conduct or transact

business in this state, pursuant to clause three of this subparagraph,

such registered limited liability partnership shall cause proof of

publication in substantial compliance with the provisions (other than

the one hundred twenty day period) of subparagraph (A) of this

paragraph, consisting of the certificate of publication of the

registered limited liability partnership with the affidavits of

publication of the newspapers annexed thereto, to be filed with the

department of state, such suspension of such registered limited

liability partnership's authority to carry on, conduct or transact

business shall be annulled.

(6) For the purposes of this subparagraph, a registered limited

liability partnership which was formed prior to the effective date of

this subparagraph shall be deemed to have complied with the publication

and filing requirements of this paragraph as in effect prior to such

effective date if (A) the registered limited liability partnership was

formed on or after January first, nineteen hundred ninety-nine and prior

to such effective date and the registered limited liability partnership

filed at least one affidavit of the printer or publisher of a newspaper

with the department of state at any time prior to such effective date,

or (B) the registered limited liability partnership was formed prior to

January first, nineteen hundred ninety-nine, without regard to whether

the registered limited liability partnership did or did not file any

affidavit of the printer or publisher of a newspaper with the secretary

of state.

(C) The information in a notice published pursuant to this paragraph

shall be presumed to be in compliance with and satisfaction of the

requirements of this paragraph.

(b) The registration shall be executed by one or more partners of the

partnership without limited partners.

(c) The registration shall be accompanied by a fee of two hundred

dollars.

(d) A partnership without limited partners is registered as a

registered limited liability partnership at the time of the payment of

the fee required by subdivision (c) of this section and the filing of a

completed registration with the department of state or at the later

date, if any, specified in such registration, not to exceed sixty days

from the date of such filing. A partnership without limited partners

that has been registered as a registered limited liability partnership

is for all purposes the same entity that existed before the registration

and continues to be a partnership without limited partners under the

laws of this state. The status of a partnership without limited partners

as a registered limited liability partnership shall not be affected by

changes in the information stated in the registration after the filing

of the registration. If a partnership without limited partners that is a

registered limited liability partnership dissolves, a partnership

without limited partners which is the successor to such registered

limited liability partnership (i) shall not be required to file a new

registration and shall be deemed to have filed the registration filed by

the registered limited liability partnership pursuant to subdivision (a)

of this section, as well as any withdrawal notice filed pursuant to

subdivision (f) of this section, any statement or certificate of consent

filed pursuant to subdivision (g) of this section or any certificate of

amendment filed pursuant to subdivision (j) of this section and (ii)

shall be bound by any revocation of registration pursuant to subdivision

(g) of this section and any annulment thereof of the dissolved

partnership without limited partners that was a registered limited

liability partnership. For purposes of this section, a partnership

without limited partners is a successor to a partnership without limited

partners that was a registered limited liability partnership if a

majority of the total interests in the current profits of such successor

partnership without limited partners are held by partners of the

predecessor partnership without limited partners that was a registered

limited liability partnership who were partners of such predecessor

partnership immediately prior to the dissolution of such predecessor

partnership.

(e) If the signed registration delivered to the department of state

for filing complies as to form with the requirements of law and the

filing fee required by any statute of this state has been paid, the

registration shall be filed and indexed by the department of state.

(f) A registration may be withdrawn by filing with the department of

state a written withdrawal notice executed by one or more partners of

the registered limited liability partnership, with a filing fee of sixty

dollars. A withdrawal notice must include: (i) the name of the

registered limited liability partnership (and if it has been changed

since registration, the name under which it was registered); (ii) the

date the registration was filed with the department of state pursuant to

subdivision (a) of this section; (iii) the address of the registered

limited liability partnership's principal office; (iv) if the withdrawal

of the registered limited liability partnership is to be effective on a

date later than the time of filing, the date, not to exceed sixty days

from the date of such filing, of such proposed effectiveness; (v) a

statement acknowledging that the withdrawal terminates the partnership's

status as a registered limited liability partnership; and (vi) any other

information determined by the registered limited liability partnership.

A withdrawal notice terminates the status of the partnership as a

registered limited liability partnership as of the date of filing the

notice or as of the later date, if any, specified in the notice, not to

exceed sixty days from the date of such filing. The termination of

registration shall not be affected by errors in the information stated

in the withdrawal notice. If a registered limited liability partnership

is dissolved, it shall within thirty days after the winding up of its

affairs is completed file a withdrawal notice pursuant to this

subdivision.

(g) Each registered limited liability partnership shall, within sixty

days prior to the fifth anniversary of the effective date of its

registration and every five years thereafter, furnish a statement to the

department of state setting forth: (i) the name of the registered

limited liability partnership, (ii) the address of the principal office

of the registered limited liability partnership, (iii) the post office

address within or without this state to which the secretary of state

shall mail a copy of any process accepted against it served upon him or

her, which address shall supersede any previous address on file with the

department of state for this purpose, and (iv) a statement that it is

eligible to register as a registered limited liability partnership

pursuant to subdivision (a) of this section. The statement shall be

executed by one or more partners of the registered limited liability

partnership. The statement shall be accompanied by a fee of twenty

dollars if submitted directly to the department of state. The

commissioner of taxation and finance and the secretary of state may

agree to allow registered limited liability partnerships to provide the

statement specified in this subdivision on tax reports filed with the

department of taxation and finance in lieu of statements filed directly

with the secretary of state and in a manner prescribed by the

commissioner of taxation and finance. If this agreement is made,

starting with taxable years beginning on or after January first, two

thousand sixteen, each registered limited liability partnership required

to file the statement specified in this subdivision that is subject to

the filing fee imposed by paragraph three of subsection (c) of section

six hundred fifty-eight of the tax law shall provide such statement

annually on its filing fee payment form filed with the department of

taxation and finance in lieu of filing a statement under this

subdivision with the department of state. However, each registered

limited liability partnership required to file a statement under this

section must continue to file a statement with the department of state

as required by this section until the registered limited liability

partnership in fact has filed a filing fee payment form with the

department of taxation and finance that includes all required

information. After that time, the registered limited liability

partnership shall continue to provide annually the statement specified

in this subdivision on its filing fee payment form in lieu of the

statement required by this subdivision. The commissioner of taxation and

finance shall deliver the completed statement specified in this

subdivision to the department of state for filing. The department of

taxation and finance must, to the extent feasible, also include in such

delivery the current name of the registered limited liability

partnership, department of state identification number for such

registered limited liability partnership, the name, signature and

capacity of the signer of the statement, name and street address of the

filer of the statement, and the email address, if any, of the filer of

the statement. If a registered limited liability partnership shall not

timely file the statement required by this subdivision, the department

of state may, upon sixty days' notice mailed to the address of such

registered limited liability partnership as shown in the last

registration or statement or certificate of amendment filed by such

registered limited liability partnership, make a proclamation declaring

the registration of such registered limited liability partnership to be

revoked pursuant to this subdivision. The department of state shall file

the original proclamation in its office and shall publish a copy thereof

in the state register no later than three months following the date of

such proclamation. This shall not apply to registered limited liability

partnerships that have filed a statement with the department of state

through the department of taxation and finance. Upon the publication of

such proclamation in the manner aforesaid, the registration of each

registered limited liability partnership named in such proclamation

shall be deemed revoked without further legal proceedings. Any

registered limited liability partnership whose registration was so

revoked may file in the department of state a statement required by this

subdivision. The filing of such statement shall have the effect of

annulling all of the proceedings theretofore taken for the revocation of

the registration of such registered limited liability partnership under

this subdivision and (1) the registered limited liability partnership

shall thereupon have such powers, rights, duties and obligations as it

had on the date of the publication of the proclamation, with the same

force and effect as if such proclamation had not been made or published

and (2) such publication shall not affect the applicability of the

provisions of subdivision (b) of section twenty-six of this chapter to

any debt, obligation or liability incurred, created or assumed from the

date of publication of the proclamation through the date of the filing

of the statement with the department of state. If, after the publication

of such proclamation, it shall be determined by the department of state

that the name of any registered limited liability partnership was

erroneously included in such proclamation, the department of state shall

make appropriate entry on its records, which entry shall have the effect

of annulling all of the proceedings theretofore taken for the revocation

of the registration of such registered limited liability partnership

under this subdivision and (A) such registered limited liability

partnership shall have such powers, rights, duties and obligations as it

had on the date of the publication of the proclamation, with the same

force and effect as if such proclamation had not been made or published

and (B) such publication shall not affect the applicability of the

provisions of subdivision (b) of section twenty-six of this chapter to

any debt, obligation or liability incurred, created or assumed from the

date of publication of the proclamation through the date of the making

of the entry on the records of the department of state. Whenever a

registered limited liability partnership whose registration was revoked

shall have filed a statement pursuant to this subdivision or if the name

of a registered limited liability partnership was erroneously included

in a proclamation and such proclamation was annulled, the department of

state shall publish a notice thereof in the state register.

(h) The filing of a withdrawal notice by a registered limited

liability partnership pursuant to subdivision (f) of this section, a

revocation of registration pursuant to subdivision (g) of this section

and the filing of a certificate of amendment pursuant to subdivision (j)

of this section shall not affect the applicability of the provisions of

subdivision (b) of section twenty-six of this chapter to any debt,

obligation or liability incurred, created or assumed while the

partnership was a registered limited liability partnership. After a

withdrawal or revocation of registration, the partnership without

limited partners shall for all purposes remain the same entity that

existed during registration and continues to be a partnership without

limited partners under the laws of this state.

(i) The department of state shall remove from its active records the

registration of a registered limited liability partnership whose

registration has been withdrawn or revoked.

(j) A registration or statement filed with the department of state

under this section may be amended or corrected by filing with the

department of state a certificate of amendment executed by one or more

partners of the registered limited liability partnership. No later than

ninety days after (i) a change in the name of the registered limited

liability partnership or (ii) a partner of the registered limited

liability partnership becomes aware that any statement in a registration

or statement was false in any material respect when made or that an

event has occurred which makes the registration or statement inaccurate

in any material respect, the registered limited liability partnership

shall file a certificate of amendment. The filing of a certificate of

amendment shall be accompanied by a fee of sixty dollars. The

certificate of amendment shall set forth: (i) the name of the limited

liability partnership and, if it has been changed, the name under which

it was registered and (ii) the date of filing its initial registration

or statement.

(j-1) A certificate of change which changes only the post office

address to which the secretary of state shall mail a copy of any process

against a registered limited liability partnership served upon him or

her, and/or the email address to which the secretary of state shall

email a notice of the fact that process against it has been

electronically served upon the secretary of state, and/or the address of

the registered agent, provided such address being changed is the address

of a person, partnership or corporation whose address, as agent, is the

address to be changed, and/or the email address being changed is the

email address of a person, partnership or other corporation whose email

address, as agent, is the email address to be changed, and/or who has

been designated as registered agent for such registered limited

liability partnership shall be signed and delivered to the department of

state by such agent. The certificate of change shall set forth: (i) the

name of the registered limited liability partnership and, if it has been

changed, the name under which it was originally filed with the

department of state; (ii) the date of filing of its initial registration

or notice statement; (iii) each change effected thereby; (iv) that a

notice of the proposed change was mailed to the limited liability

partnership by the party signing the certificate not less than thirty

days prior to the date of delivery to the department of state and that

such limited liability partnership has not objected thereto; and (v)

that the party signing the certificate is the agent of such limited

liability partnership to whose address the secretary of state is

required to mail copies of process, and/or to whose email address the

secretary of state is required to mail a notice of the fact that process

against it has been electronically served upon the secretary of state,

and/or the registered agent, if such be the case. A certificate signed

and delivered under this subdivision shall not be deemed to effect a

change of location of the office of the limited liability partnership in

whose behalf such certificate is filed. The certificate of change shall

be accompanied by a fee of five dollars.

(k) The filing of a certificate of amendment pursuant to subdivision

(j) of this section with the department of state shall not alter the

effective date of the registration being amended or corrected.

(l) Except as otherwise provided in any agreement between the

partners, the decision of a partnership without limited partners to

file, withdraw or amend a registration pursuant to subdivision (a), (f)

or (j), respectively, of this section is an ordinary matter connected

with partnership business under subdivision eight of section forty of

this chapter.

(m) A registered limited liability partnership, other than a

registered limited liability partnership authorized to practice law,

shall be under the supervision of the regents of the university of the

state of New York and be subject to disciplinary proceedings and

penalties in the same manner and to the same extent as is provided with

respect to individuals and their licenses, certificates and

registrations in title eight of the education law relating to the

applicable profession. Notwithstanding the provisions of this

subdivision, a registered limited liability partnership authorized to

practice medicine shall be subject to the pre-hearing procedures and

hearing procedures as are provided with respect to individual physicians

and their licenses in title two-A of article two of the public health

law. In addition to rendering the professional service or services the

partners are authorized to practice in this state, a registered limited

liability partnership may carry on, or conduct or transact any other

business or activities as to which a partnership without limited

partners may be formed. Notwithstanding any other provision of this

section, a registered limited liability partnership (i) authorized to

practice law may only engage in another profession or business or

activities or (ii) which is engaged in a profession or other business or

activities other than law may only engage in the practice of law, to the

extent not prohibited by any other law of this state or any rule adopted

by the appropriate appellate division of the supreme court or the court

of appeals. Any registered limited liability partnership may invest its

funds in real estate, mortgages, stocks, bonds or any other types of

investments.

(n) No registered limited liability partnership may render a

professional service except through individuals authorized by law to

render such professional service as individuals, provided, that nothing

in this chapter shall authorize a registered limited liability

partnership to render a professional service in this state except

through individuals authorized by law to render such professional

service as individuals in this state.

(o) This section shall not repeal, modify or restrict any provision of

the education law or the judiciary law or any rules or regulations

adopted thereunder regulating the professions referred to in the

education law or the judiciary law except to the extent in conflict

herewith.

(p) A certified copy of the registration and of each certificate of

amendment shall be filed by the registered limited liability partnership

with the licensing authority within thirty days after the filing of such

registration or amendment with the department of state.

(q) Each partner of a registered limited liability partnership formed

to provide medical services in this state must be licensed pursuant to

article 131 of the education law to practice medicine in this state and

each partner of a registered limited liability partnership formed to

provide dental services in this state must be licensed pursuant to

article 133 of the education law to practice dentistry in this state.

Each partner of a registered limited liability partnership formed to

provide veterinary services in this state must be licensed pursuant to

article 135 of the education law to practice veterinary medicine in this

state. Each partner of a registered limited liability partnership formed

to provide public accountancy services as a firm, whose principal place

of business is in this state and who provides public accountancy

services, must be licensed pursuant to article 149 of the education law

to practice public accountancy in this state. Each partner of a

registered limited liability partnership formed to provide professional

engineering, land surveying, geological services, architectural and/or

landscape architectural services in this state must be licensed pursuant

to article 145, article 147 and/or article 148 of the education law to

practice one or more of such professions in this state. Each partner of

a registered limited liability partnership formed to provide licensed

clinical social work services in this state must be licensed pursuant to

article 154 of the education law to practice clinical social work in

this state. Each partner of a registered limited liability partnership

formed to provide creative arts therapy services in this state must be

licensed pursuant to article 163 of the education law to practice

creative arts therapy in this state. Each partner of a registered

limited liability partnership formed to provide marriage and family

therapy services in this state must be licensed pursuant to article 163

of the education law to practice marriage and family therapy in this

state. Each partner of a registered limited liability partnership formed

to provide mental health counseling services in this state must be

licensed pursuant to article 163 of the education law to practice mental

health counseling in this state. Each partner of a registered limited

liability partnership formed to provide psychoanalysis services in this

state must be licensed pursuant to article 163 of the education law to

practice psychoanalysis in this state. Each partner of a registered

limited liability partnership formed to provide applied behavior

analysis service in this state must be licensed or certified pursuant to

article 167 of the education law to practice applied behavior analysis

in this state. A registered limited liability partnership formed to

lawfully engage in the practice of public accountancy as a firm, as such

practice is defined under article 149 of the education law, shall be

required to show (1) that a simple majority of the ownership of the

firm, in terms of financial interests and voting rights held by the

firm's owners, belongs to individuals licensed to practice public

accountancy in some state, and (2) that all partners of a limited

liability partnership whose principal place of business is in this

state, and who are engaged in the practice of public accountancy in this

state, hold a valid license issued under section seventy-four hundred

four of the education law. For purposes of this subdivision, "financial

interest" means capital stock, capital accounts, capital contributions,

capital interest, or interest in undistributed earnings of a business

entity. Although firms registered with the education department may

include non-licensee owners, the firm and its owners must comply with

rules promulgated by the state board of regents. Notwithstanding the

foregoing, a firm registered with the education department may not have

non-licensee owners if the firm's name includes the words "certified

public accountant," or "certified public accounts," or the abbreviations

"CPA" or "CPAs". Each non-licensee owner of a firm that is formed under

this section shall be (1) a natural person who actively participates in

the business of the firm or its affiliated entities, or (2) an entity,

including, but not limited to, a partnership or professional

corporation, provided each beneficial owner of an equity interest in

such entity is a natural person who actively participates in the

business conducted by the firm or its affiliated entities. For purposes

of this subdivision, "actively participate" means to provide services to

clients or to otherwise individually take part in the day-to-day

business or management of the firm or an affiliated entity.