Governor Cuomo Signs NYS Design Professional Corporation Correction Bill Into Law

On October 4, 2012, Governor Cuomo signed the Design Professional Corporation (D.P.C.) correction bill into law which clarifies and makes simpler the conversion of an existing Professional Corporation (P.C.) into a D.P.C. 

Under prior law, effective January 1, 2012, Section 1503 of the Business Corporation Law was amended to permit the incorporation of design professional service corporations (engineering, architecture, landscape architecture, land surveying and any combination thereof) who are permitted to have non-professionals own less than 25 percent and may constitute less than 25 percent of director and officer positions.  The correction bill simplifies the process for existing design firms to convert to a D.P.C.  Without the correction bill, existing design firms would have been required to dissolve their existing entities and undergo the burdensome process of creating a new corporation in order to allow non-professionals to own stock.

"The new correction bill opens up a significant opportunity in ownership transition for New York State design firms in 2012.  With an increased pool of potential buyers, coupled with the expiring long-term capital gain tax rates and increasing valuations, the fourth quarter of 2012 will afford a wealth of opportunity for ownership transition in the design industry", says Richard J. Maxwell, CPA/ABV, CVA, CFF, CDA, principal with Dannible/McKee and Associates, Ltd.

If you have any questions on how this new law will affect you or your firm, please don't hesitate to contact us

About Dannible/McKee and Associates, Ltd.

Dannible/McKee and Associates, Ltd. provides business valuation, ownership transition, expert witness testimony and litigation support, strategic planning, financial management and employee benefit consulting to professional service firms across the country. In addition, the company teaches national seminars on business valuation and ownership transition to members of professional service firms.  Visit our website for more information. 

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