by: Jessica Sheridan Assoc. AIA LEED AP
Event: Permissible Corporate Entities & Practice Guidelines for Architects & Landscape Architects
Location: Center for Architecture, 02.23.10
Speaker: Robert Lopez, RA — Executive Secretary, New York State Boards for Architecture and Landscape Architecture; Douglas Lentivech, Esq. — Assistant Counsel, Office of the Professions, NYS Education Department
Organizers: AIANY Professional Practice Committee; AIANY Emerging New York Architects Committee; NY Chapter of the ASLA
The regulations for establishing corporate entities in New York State are the strictest in the U.S., stated Robert Lopez, RA, executive secretary of the NYS Boards for Architecture and Landscape Architecture. According to Article 147 for architecture and Article 148 for landscape architecture, the only individuals who can own professional design services firms are those licensed in the state as architects or landscape architects.
Part of the reason that the regulations are so strict in New York is because the written rules are very general. “The Articles are more like a constitution, rather than a statute,” said Douglas Lentivech, Esq., assistant counsel to the Office of the Professions, NYS Education Department. At the core, the most important principle is that “professional services” must run directly from a professional to a client without interference from a third party. This ensures that a licensed individual is delivering the business qualified by his or her title (i.e., R.A. or R.L.A.), and also indicated in the firm name (i.e., Architecture or Landscape Architecture). In other words, if an individual is a registered architect, he or she may establish a business that provides architectural services and he or she may call the firm an architecture firm. On the other hand, if an individual is not licensed, he or she cannot provide architectural services, nor can he or she own an architecture firm.
One of the pitfalls of the regulations is that all of the shareholders of a firm must be licensed. Employees in charge of business development or marketing, for example, cannot own any part of architecture or landscape architecture firms in New York. This may change in the near future, however. While firms currently fall under categories ranging from sole proprietorships, to professional service corporations (PCs), to limited liability partnerships (LLPs) — all of which require licensed shareholders — there is a bill under review to create a “design professional service corporation (DPC).” This category would require that the president or CEO of a firm be a licensed professional and the single largest shareholder, but up to 25% of the shareholders may be non-licensed. The bill would also allow employee stock ownership plans, currently not permitted.
To learn more about practice and corporate entity regulations, visit the New York State Office of the Professions. There you will find the NYS Education Law; commissioner’s regulations; regent rules; and practice guidelines.