2005 Washington Revised Code RCW 18.04.195: License required — Requirements — Application — Fees.

(1) A sole proprietorship engaged in business in this state and offering to issue or issuing reports on financial statements or using the title CPA or certified public accountant shall license, as a firm, every three years with the board.

     (a) The sole proprietor shall hold a license to practice under RCW 18.04.215;

     (b) Each resident person in charge of an office located in this state shall hold a license to practice under RCW 18.04.215; and

     (c) The licensed firm must meet competency requirements established by rule by the board.

     (2) A partnership engaged in business in this state and offering to issue or issuing reports on financial statements or using the title CPA or certified public accountant shall license as a firm every three years with the board, and shall meet the following requirements:

     (a) At least one general partner of the partnership shall hold a license to practice under RCW 18.04.215;

     (b) Each resident person in charge of an office in this state shall hold a license to practice under RCW 18.04.215;

     (c) A simple majority of the ownership of the licensed firm in terms of financial interests and voting rights of all partners or owners shall be held by natural persons who are licensees or holders of a valid license issued under this chapter or by another state that entitles the holder to practice public accounting in this state. The principal partner of the partnership and any partner having authority over issuing reports on financial statements shall hold a license under this chapter or issued by another state that entitles the holder to practice public accounting in this state; and

     (d) The licensed firm must meet competency requirements established by rule by the board.

     (3) A corporation engaged in business in this state and offering to issue or issuing reports on financial statements or using the title CPA or certified public accountant shall license as a firm every three years with the board and shall meet the following requirements:

     (a) A simple majority of the ownership of the licensed firm in terms of financial interests and voting rights of all shareholders or owners shall be held by natural persons who are licensees or holders of a valid license issued under this chapter or by another state that entitles the holder to practice public accounting in this state and is principally employed by the corporation or actively engaged in its business. The principal officer of the corporation and any officer or director having authority over issuing reports on financial statements shall hold a license under this chapter or issued by another state that entitles the holder to practice public accounting in this state;

     (b) At least one shareholder of the corporation shall hold a license under RCW 18.04.215;

     (c) Each resident person in charge of an office located in this state shall hold a license under RCW 18.04.215;

     (d) A written agreement shall bind the corporation or its shareholders to purchase any shares offered for sale by, or not under the ownership or effective control of, a qualified shareholder, and bind any holder not a qualified shareholder to sell the shares to the corporation or its qualified shareholders. The agreement shall be noted on each certificate of corporate stock. The corporation may purchase any amount of its stock for this purpose, notwithstanding any impairment of capital, as long as one share remains outstanding;

     (e) The corporation shall comply with any other rules pertaining to corporations practicing public accounting in this state as the board may prescribe; and

     (f) The licensed firm must meet competency requirements established by rule by the board.

     (4) A limited liability company engaged in business in this state and offering to issue or issuing reports on financial statements or using the title CPA or certified public accountant shall license as a firm every three years with the board, and shall meet the following requirements:

     (a) At least one member of the limited liability company shall hold a license under RCW 18.04.215;

     (b) Each resident manager or member in charge of an office located in this state shall hold a license under RCW 18.04.215;

     (c) A simple majority of the ownership of the licensed firm in terms of financial interests and voting rights of all owners shall be held by natural persons who are licensees or holders of a valid license issued under this chapter or by another state that entitles the holder to practice public accounting in this state. The principal member or manager of the limited liability company and any member having authority over issuing reports on financial statements shall hold a license under this chapter or issued by another state that entitles the holder to practice public accounting in this state; and

     (d) The licensed firm must meet competency requirements established by rule by the board.

     (5) Application for a license as a firm shall be made upon the affidavit of the proprietor or person designated as managing partner, member, or shareholder for Washington. This person shall hold a license under RCW 18.04.215. The board shall determine in each case whether the applicant is eligible for a license. A partnership, corporation, or limited liability company which is licensed to practice under RCW 18.04.215 may use the designation "certified public accountants" or "CPAs" in connection with its partnership, limited liability company, or corporate name. The board shall be given notification within ninety days after the admission or withdrawal of a partner, shareholder, or member engaged in this state in the practice of public accounting from any partnership, corporation, or limited liability company so licensed.

     (6) Licensed firms which fall out of compliance with the provisions of this section due to changes in firm ownership or personnel, after receiving or renewing a license, shall notify the board in writing within ninety days of its falling out of compliance and propose a time period in which they will come back into compliance. The board may grant a reasonable period of time for a firm to be in compliance with the provisions of this section. Failure to bring the firm into compliance within a reasonable period of time, as determined by the board, may result in suspension, revocation, or imposition of conditions on the firm's license.

     (7) Fees for the license as a firm and for notification of the board of the admission or withdrawal of a partner, shareholder, or member shall be determined by the board. Fees shall be paid by the firm at the time the license application form or notice of admission or withdrawal of a partner, shareholder, or member is filed with the board.

     (8) Nonlicensee owners of licensed firms are:

     (a) Required to fully comply with the provisions of this chapter and board rules;

     (b) Required to be a natural person;

     (c) Required to be an active individual participant in the licensed firm or affiliated entities as these terms are defined by board rule; and

     (d) Subject to discipline by the board for violation of this chapter.

     (9) Resident nonlicensee owners of licensed firms are required to meet:

     (a) The ethics examination, registration, and fee requirements as established by the board rules; and

     (b) The ethics CPE requirements established by the board rules.

     (10)(a) Licensed firms must notify the board within thirty days after:

     (i) Sanction, suspension, revocation, or modification of their professional license or practice rights by the securities exchange commission, internal revenue service, or another state board of accountancy;

     (ii) Sanction or order against the licensee or nonlicensee firm owner by any federal or other state agency related to the licensee's practice of public accounting or violation of ethical or technical standards established by board rule; or

     (iii) The licensed firm is notified that it has been charged with a violation of law that could result in the suspension or revocation of the firm's license by a federal or other state agency, as identified by board rule, related to the firm's professional license, practice rights, or violation of ethical or technical standards established by board rule.

     (b) The board must adopt rules to implement this subsection and may also adopt rules specifying requirements for licensees to report to the board sanctions or orders relating to the licensee's practice of public accounting or violation of ethical or technical standards entered against the licensee by a nongovernmental professionally related standard-setting entity.

[2003 c 290 § 1; 2001 c 294 § 11; 1999 c 378 § 5; 1994 c 211 § 1402; 1986 c 295 § 8; 1983 c 234 § 9.]

Effective date -- 2001 c 294: See note following RCW 18.04.015.      Effective date -- Severability -- 1994 c 211: See RCW 25.15.900 and 25.15.902.