Allows a professional service corporation, in good standing, to convert to a design professional service corporation if it meets all stated requirements to become a design professional service corporation.
TITLE OF BILL: An act to amend the business corporation law, in relation to design professional service corporations
PURPOSE: To clarify the law regarding design professional services corporations by allowing professional corporations (P.C.'s) to convert to design professional service corporations (D.P.C's) without having to create a separate corporation while converting from the original corporation.
SUMMARY OF PROVISIONS: Section 1503 of the business corporation law is amended by adding a new paragraph (b-5) to allow an existing professional service corporation to convert to a design professional service corporation.
JUSTIFICATION: Chapter 550 of the Laws of 2011 created a new type of professional corporation-a design professional service corporation or D.P.C. Under this new law, design firms are given the option of offering an ownership interest in the corporation to non-licensed employees through an Employee Stock Ownership Olan (ESOP). However, it has become unclear whether or not professional corporations wishing to offer this ESOP can easily transition to D.P.C's without the need to reincorporate as a new entity. This amendment will clarify the conversion process for professional corporations by allowing corporations in good standing to simply convert to D.P.C's.
LEGISLATIVE HISTORY: New legislation.
FISCAL IMPLICATIONS: None to the State.
EFFECTIVE DATE: Immediately.
STATE OF NEW YORK ________________________________________________________________________ 7378--A IN SENATE May 2, 2012 ___________Introduced by Sen. LAVALLE -- read twice and ordered printed, and when printed to be committed to the Committee on Corporations, Authorities and Commissions -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the business corporation law, in relation to design professional service corporations THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 1503 of the business corporation law is amended by adding a new paragraph (b-5) to read as follows: (B-5) ON OR AFTER JANUARY FIRST, TWO THOUSAND TWELVE, THE STATE EDUCA- TION DEPARTMENT AND THE DEPARTMENT OF STATE SHALL ALLOW AN EXISTING PROFESSIONAL SERVICE CORPORATION IN GOOD STANDING TO CONVERT TO A DESIGN PROFESSIONAL SERVICE CORPORATION AS DEFINED IN THIS ARTICLE, PROVIDED THE DESIGN PROFESSIONAL SERVICE CORPORATION MEETS ALL OF THE REQUIRE- MENTS TO BECOME A DESIGN PROFESSIONAL SERVICE CORPORATION, INCLUDING THAT ITS NAME SHALL END WITH THE WORDS "DESIGN PROFESSIONAL CORPORATION" OR THE ABBREVIATION "D.P.C.". S 2. This act shall take effect immediately.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD15709-02-2