C. Jaye Berger - Proposed new law could change design industry - part I

The current law in the State of New York only allows design firms to be owned by licensed individuals. In other words, an architectural firm may have employees who have worked for them for 20 years, but who have for some reason never become licensed architects. Those employees could never become partners or shareholders in the firm under the existing law. This has resulted in much debate and has caused some people to perhaps "secretly" do what they know they cannot do openly. It is interesting to note that many other states already allow employees who are not licensed to become owners in the firm. A new proposed bill in the State of New York could change all of that. It would allow design firms to offer a limited ownership interest to employees who are not licensed design professionals by creating a new type of entity to be known as a "Design Professional Service Corporation." It would be set up under the Business Corporation Law and the Education Law, as is the case with architectural and engineering firms currently. It would allow employees to have shares in the professional corporation whether they are unlicensed in the State of New York or in another state. This would open the doors wide to allowing designers in other states to do business in the State of New York and would make New York a more competitive place to do business. In Part II of this article, I will discuss more specifics about the proposed bill. Part II of this article will appear in the August 23, 2011 edition of the New York Real Estate Journal. C. Jaye Berger, Esq, is an attorney and the principal of Law Offices C. Jaye Berger, New York, N.Y.