Senate Bill No. 431

Senate Bill No. 431-Committee on Commerce and Labor

CHAPTER

275

AN ACT relating to accountants; revising provisions governing the allowable forms of business entities for the practice of public accounting; revising provisions governing the registration of offices established or maintained for the practice of public accounting; authorizing a fee for the registration of such offices; and providing other matters properly relating thereto.

[Approved July 3, 1997]

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

Section 1. NRS 628.325 is hereby amended to read as follows:
628.325 1. One or more natural persons may organize a corporation for the practice of public accounting under the Professional Corporations and Associations Act, chapter 89 of NRS. The corporation is not required to have more directors than shareholders, but at least one director must be a shareholder. The other directors need not, but may, be shareholders.
2. One or more natural persons may [organize] :
(a) Organize a corporation pursuant to chapter 78 of NRS;
(b) Qualify to do business as a foreign corporation pursuant to chapter 80 of NRS;
(c) Organize a limited-liability company pursuant to chapter 86 of NRS ; or
(d) Register as a foreign limited-liability company pursuant to chapter 86 of NRS,
to practice public accounting. [Organization in this form does]
3. The organization, qualification or registration of a corporation or company pursuant to subsection 2:
(a) Does not modify [the] :
(1) The relationship between an accountant and a client [, or] ;
(2) The liability arising out of that relationship [, but this section does] ; or
(3) The compliance of the corporation or company with this chapter or any regulations adopted pursuant thereto.
(b) Does not render:
[(a)] (1) A person liable in tort for any act in which he has not personally participated.
[(b)] (2) The manager, a member or an employee of a limited-liability company liable in contract for any contract which he executes on behalf of a limited-liability company within the limits of his authority.
Sec. 2. NRS 628.340 is hereby amended to read as follows:
628.3401. A partnership engaged in this state in the practice of public accounting shall register with the board as a partnership of certified public accountants and meet the following requirements:
(a) At least one general partner must be a certified public accountant of this state in good standing.
(b) Each partner who is a resident of this state and is personally and regularly engaged within this state in the practice of public accounting as a member thereof must be a certified public accountant of this state in good standing.
(c) Each partner who personally engages in the practice of public accounting in this state and who is not a resident of this state and is not regularly employed in an office of the firm in this state must be a certified public accountant in good standing of some state or a jurisdiction of the United States approved by the board by regulation.
(d) Each partner who is regularly engaged in the practice of public accounting within the United States must be a certified public accountant in good standing of some state or jurisdiction of the United States approved by the board by regulation.
(e) Each [resident] manager in charge of an office of the firm in this state must be a certified public accountant of this state in good standing.
(f) A corporation or limited-liability company which is registered pursuant to NRS 628.343 or 628.345 may be a partner, and a partnership which is registered pursuant to this section may be a general partner, in a partnership engaged in the practice of public accounting.
2. Application for registration must be made upon the affidavit of a general partner who holds a live permit to practice in this state as a certified public accountant. The board shall determine whether the applicant is eligible for registration and may charge an initial fee and an annual renewal fee set by the board by regulation. A partnership which is so registered may use the words "certified public accountants" or the abbreviation "C.P.A.'s" or "CPA's" in connection with its partnership name. Notice must be given to the board within 1 month after the admission to or withdrawal of a partner from any partnership so registered.
Sec. 3. NRS 628.343 is hereby amended to read as follows:
628.343 1. A corporation organized for the practice of public accounting shall register with the board as a corporation of certified public accountants and comply with the following requirements:
(a) The sole purpose and business of the corporation must be to furnish to the public services not inconsistent with this chapter or the regulations of the board, except that the corporation may invest its money in a manner not incompatible with the practice of public accounting.
(b) Each shareholder of the corporation must be a certified public accountant of some state in good standing, and be principally employed by the corporation or actively engaged in its business. No other person may have any interest in the stock of the corporation. The principal officer of the corporation and any officer or director having authority over the practice of public accounting by the corporation must be a certified public accountant of some state in good standing.
(c) At least one shareholder of the corporation must be a certified public accountant of this state in good standing.
(d) Each [resident] manager in charge of an office of the corporation in this state and each shareholder or director who is regularly and personally engaged within this state in the practice of public accounting must be a certified public accountant of this state in good standing.
(e) In order to facilitate compliance with the provisions of this section relating to the ownership of stock, there must be a written agreement binding the shareholders or the corporation to purchase any shares offered for sale by, or not under the ownership or effective control of, a qualified shareholder. The corporation may retire any amount of stock for this purpose, notwithstanding any impairment of its capital, so long as one share remains outstanding.
(f) The corporation shall comply with other regulations pertaining to corporations practicing public accounting in this state adopted by the board.
2. Application for registration must be made upon the affidavit of a shareholder who holds a live permit to practice in this state as a certified public accountant. The board shall determine whether the applicant is eligible for registration and may charge an initial fee and an annual renewal fee set by the board by regulation. A corporation which is so registered may use the words "certified public accountants" or the abbreviation "C.P.A.'s" or "CPA's" in connection with its corporate name. Notice must be given to the board within 1 month after the admission to or withdrawal of a shareholder from any corporation so registered.
Sec. 4. NRS 628.360 is hereby amended to read as follows:
628.360 1. A partnership engaged in this state in the practice of public accounting shall register with the board as a partnership of public accountants and meet the following requirements:
(a) At least one general partner thereof must be a certified public accountant or a registered public accountant of this state in good standing.
(b) Each partner thereof personally and regularly engaged within this state in the practice of public accounting as a member thereof must be a certified public accountant or a registered public accountant of this state in good standing.
(c) Each [resident] manager in charge of an office of the firm in this state must be a certified public accountant or a registered public accountant of this state in good standing.
(d) A corporation or limited-liability company which is registered pursuant to NRS 628.363 or 628.365 may be a partner, and a partnership which is registered pursuant to this section may be a general partner, in a partnership engaged in the practice of public accounting.
2. Application for registration must be made upon the affidavit of a general partner who holds a live permit to practice in this state as a certified public accountant or as a registered public accountant. The board shall determine whether the applicant is eligible for registration. The board may charge a registration fee and renewal fee and a reporting fee in an amount set by regulation. A partnership which is so registered may use the words "public accountants" in connection with its partnership name. Notice must be given to the board [,] within 1 month [,] after the admission to or withdrawal of a partner from any partnership so registered.
Sec. 5. NRS 628.363 is hereby amended to read as follows:
628.363 1. A corporation organized for the practice of public accounting shall register with the board as a corporation of public accountants and comply with the following requirements:
(a) The sole purpose and business of the corporation must be to furnish to the public services not inconsistent with this chapter or the regulations of the board, except that the corporation may invest its money in a manner not incompatible with the practice of public accounting.
(b) Each shareholder of the corporation must be a certified public accountant in any state or a public accountant of this state in good standing, and be principally employed by the corporation or actively engaged in its business. No other person may have any interest in the stock of the corporation. The principal officer of the corporation and any officer or director having authority over the practice of public accounting by the corporation must be a certified public accountant or registered public accountant of this state in good standing.
(c) Each [resident] manager in charge of an office of the corporation in this state must be a certified public accountant or a registered public accountant of this state in good standing.
(d) In order to facilitate compliance with the provisions of this section relating to the ownership of stock, there must be a written agreement binding the shareholders or the corporation to purchase any shares offered for sale by, or not under the ownership or effective control of, a qualified shareholder. The corporation may retire any amount of stock for this purpose, notwithstanding any impairment of its capital, so long as one share remains outstanding.
(e) The corporation shall comply with other regulations pertaining to corporations practicing public accounting in this state adopted by the board.
2. Application for registration must be made upon the affidavit of a shareholder who holds a live permit to practice in this state as a certified public accountant or as a registered public accountant. The board shall determine whether the applicant is eligible for registration. The board may charge a registration fee and renewal fee and a reporting fee in an amount set by regulation. A corporation which is so registered may use the words "public accountants" in connection with its corporate name. Notice must be given to the board [,] within 1 month [,] after the admission to or withdrawal of a shareholder from any corporation so registered.
Sec. 6. NRS 628.370 is hereby amended to read as follows:
628.370 1. Each office established or maintained in this state for the practice of public accounting in this state by a certified public accountant or a partnership, corporation or limited-liability company composed of certified public accountants, or by a registered public accountant or a partnership, corporation or limited-liability company composed of registered public accountants, must be registered annually under this chapter with the board. [No fee may be charged for this registration.] The board may charge a fee for the registration of an office in an amount set by regulation.
2. Each office must be under the [direct] supervision of a [resident] manager, who may be a partner, shareholder, member or employee holding a certificate and a live permit . [, but the title or designation "certified public accountant" or the abbreviation "C.P.A." or "CPA" may not be used in connection with that office unless the resident manager is the holder of a certificate as a certified public accountant under NRS 628.190 to 628.310, inclusive, and a live permit. A resident manager may serve in that capacity at one office only.]
3. The board shall by regulation prescribe the procedure to be followed in registering offices.
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