Sec 32-731. Certified public accountant or public accountant partnership; qualifications; definitions

A. Except as provided in section 32-725, subsection G, once every two years a partnership engaged in this state in the practice of accounting by certified public accountants or public accountants shall pay the registration fee pursuant to section 32-729 and register with the board as a partnership of certified public accountants and shall meet the following requirements:

1. At least one partner shall be a resident and a full-time practicing certified public accountant in good standing in this state.

2. At least fifty-one percent of the ownership of the partnership, in terms of direct and indirect financial interests and voting rights, must belong to holders in good standing of certificates or licenses to practice accounting as certified public accountants or public accountants in any jurisdiction. Only certified public accountants or public accountants whose qualifications are considered to be substantially equivalent, as provided by section 32-721, subsections C and D, may be considered as meeting the requirement prescribed by this paragraph.

B. A partnership registered with the board pursuant to this section may include owners who are not certified pursuant to this chapter if all of the following apply:

1. The partnership designates an individual who is certified pursuant to this chapter and who is responsible for the proper registration of the firm.

2. All noncertified partners actively participate in the management of the partnership or a directly affiliated entity that has been approved by the board. For the purposes of this paragraph:

(a) A partner actively participates if all of the following occur:

(i) The partner performs at least five hundred hours of accounting services for the public accounting partnership during the calendar year.

(ii) The accounting services performed constitute the partner's principal occupation.

(iii) The partner's interest in the public accounting partnership reverts to the partnership if the partner stops performing services for the partnership.

(b) "Directly affiliated entity" means a firm in which each owner of an equity interest in the entity actively participates in the business of providing services to the firm's clients.

3. Any partner who is ultimately responsible for supervising attest services in this state or the partner who signs any reports related to attest services on behalf of the partnership in this state shall be certified pursuant to this chapter or qualified to exercise the limited reciprocity privilege pursuant to section 32-725, subsection G and shall meet the experience requirements for carrying out these functions adopted by the board in its rules.

4. The partnership complies with other requirements imposed by the board in its rules.

C. Application for registration pursuant to this section shall be made on affidavit of a partner of the partnership who is a certified public accountant or public accountant in good standing in this state. The board in each case shall determine whether the applicant is eligible for registration. A partnership that is registered pursuant to this section may use the words "certified public accountants" or the abbreviation "C.P.A.'s" or "CPA's" or the words "public accountants" or the abbreviation "P.A.'s" or "PA's" in connection with its partnership name as provided for by the board in its rules. Partnerships registered pursuant to this chapter may provide attest services.

D. A partnership that applies for an initial registration or a renewal pursuant to this section shall list in its application all jurisdictions in which the partnership has applied for or holds a registration, license or permit as a certified public accountant partnership and shall list any past denials, revocations or suspensions of registrations, licenses or permits by any other jurisdiction.

E. Except as provided in subsection F of this section, an applicant for registration or a partnership registered pursuant to this section shall notify the board in writing within one month of any of the following:

1. The termination of any partnership.

2. The admission of a partner to a partnership that is registered pursuant to this section if the partner is a certified public accountant or a public accountant.

3. The withdrawal of a partner from a partnership that is registered pursuant to this section if the partner is a certified public accountant or a public accountant.

4. A change of a partner's residence from this state to another jurisdiction or from another jurisdiction to this state if the partner is in a partnership that is registered pursuant to this section and the partner was a certified public accountant or a public accountant.

5. The death of a person who is a partner in a partnership that is registered pursuant to this section and who was a certified public accountant or a public accountant.

6. Any change by any jurisdiction in the certificate or license status of a certified public accountant or a public accountant owner of the partnership that prevents the certificate or license from being in good standing or that prevents the right of the certified public accountant or a public accountant to practice accounting as a certified public accountant or a public accountant in that jurisdiction.

7. Any change in the number or location of offices of the partnership in this state and any change in the identity of the individuals in charge of the partnership's offices in this state.

F. If a partnership fails to comply with subsection E of this section, the board may grant a reasonable period of time for the partnership to take corrective action.

G. Professional corporations composed of certified public accountants or public accountants shall meet the requirements of title 10, chapter 20 and any additional nonconflicting requirements contained in this section.

H. Limited liability companies, professional limited liability companies and limited liability partnerships composed of certified public accountants or public accountants shall meet the requirements of title 29, chapters 4 or 5 and any additional nonconflicting requirements contained in this section.

I. For the purposes of this section:

1. "Partner" includes any shareholder of a professional corporation and any member of a limited liability company or professional limited liability company.

2. "Partnership" includes a professional corporation, a limited liability company and a professional limited liability company.