WAC 4-25-750
What are the CPA firm licensing
requirements? With the exception of out-of-state sole
practitioning CPAs holding valid practice privileges in
Washington state under WAC 4-25-756, attest services may only
be offered or performed in a CPA firm licensed by the board
and meeting the requirements of this section. An entity
wishing to use "CPA(s)" or "certified public accountant(s)" in
the firm name must first obtain a license from the board.
(1) How may a CPA firm be organized? A CPA firm may be
organized as:
(a) A proprietorship;
(b) A partnership;
(c) A professional corporation (PC) or professional
service corporation (PS);
(d) A limited liability company (LLC);
(e) A limited liability partnership (LLP); or
(f) Any other form of legal entity authorized by statute
for use by a CPA firm.
(2) What happens when a CPA firm alters its legal form?
A change in the legal form of a firm constitutes a new firm.
Accordingly, the new entity must first obtain a CPA firm
license from the board.
(3) What are the ownership requirements for a CPA firm?
(a) All owners of a licensed CPA firm are required to:
(i) Be natural persons;
(ii) Fully comply with the provisions of chapter 18.04 RCW; and
(iii) Subject to discipline by the board for violations
of chapter 18.04 RCW or 4-25 WAC;
(b) A simple majority of the ownership of the licensed
firm in terms of financial interests and voting rights of all
partners, owners, or shareholders must be:
(i) Licensees in this state or holders of a valid license
to practice public accountancy issued by another state;
(ii) Entitled to practice public accounting in Washington
state; and
(iii) Principally employed by the corporation or actively
engaged in its business.
(c) At least one general partner of a partnership, one
shareholder of a corporation, and one manager of a limited
liability company must be a licensee.
(d) Each CPA proprietor, partner, shareholder or manager
who is either a resident or is entering the state and
practicing public accountancy in this state must hold a valid
Washington state license or practice privileges.
(e) The principal partner of the partnership and any
partner having authority over issuing reports on financial
statements must be a licensee under the act or holder of a
valid license to practice public accountancy issued by another
state and must be entitled to practice public accounting in
this state.
(f) The principal officer of the corporation and any
officer or director having authority over issuing reports on
financial statements must be a licensee under the act or
holder of a valid license to practice public accountancy
issued by another state and must be entitled to practice
public accountancy in this state.
(g) The principal manager or member of a limited
liability company and any member having authority over issuing
reports on financial statements must be a licensee under the
act or holder of a valid license to practice public
accountancy issued by another state and must be entitled to
practice public accountancy in this state.
(h) A nonresident CPA owner must be licensed to practice
public accountancy in at least one state.
(i) A nonlicensee owner must:
(i) Be a natural person;
(ii) Meet the good character requirements of RCW 18.04.105 (1)(a);
(iii) Comply with the act and board rules; and
(iv) Be an active individual participant in the licensed
firm or affiliated entities as these terms are defined in WAC 4-25-410; and
(j) A resident nonlicensee firm owner must meet the
requirements of WAC 4-25-752 and register with the board
concurrent with submission of the firm license, or submission
of an amendment to the firm license, to the board.
(4) What are the requirements for the firm's main office
and a branch office? The firm's main office must be under the
direct supervision of a resident licensee.
A branch office is an office of a licensed CPA firm which
is physically separated from the main office. A branch office
operates under the CPA firm license of the main office.
(5) How do I apply for an initial CPA firm license? To
apply for an initial CPA firm license you must use the
application form(s) provided by the board and submit the
completed form(s), all applicable fees, all required
documentation including the following to the board's office:
(a) The firm name;
(b) Address and telephone number of the main office and
any branch offices of the firm;
(c) Name of the managing licensee of the main office;
(d) Licensee owners' names and the states in which they
hold CPA licenses;
(e) Name(s) of all nonlicensee owners;
(f) Complete registration form(s), including the
appropriate fee, for each resident nonlicensee owner; and
(g) Type of legal organization under which the firm
operates.
An application is not complete and cannot be processed
until all fees, required information, and required
documentation is received by the board. Upon completion of
processing, a CPA firm license will be mailed to the main
office at the last address provided to the board.
The initial CPA firm license will expire on June 30 of
the third calendar year following initial licensure.
(6) How do I renew a CPA firm license? To renew a CPA
firm license you must use the form(s) provided by the board. In January of the year of expiration, a renewal form(s) will
be mailed to the main office at the last address provided to
the board. You must submit a properly completed renewal
form(s), all applicable fees and all required documentation to
the board by April 30th of the year of expiration. Failure to
file a complete renewal form for a firm license by April 30 of
the year of expiration will result in late fees. The board
may waive, reduce, or extend the due date of renewal and/or
late fees based on individual hardship including, but not
limited to, financial hardship, critical illness, or active
military deployment. A renewal application is not complete
and cannot be processed until all fees, required information,
and required documentation is received by the board. Upon
completion of processing, the CPA firm license will be mailed
to the main office at the last address provided to the board.
The CPA firm license will expire on June 30 of the third
calendar year following the date of renewal.
(7) When must I notify the board of changes in the CPA
firm? A CPA firm must provide the board written notification
of the following within ninety days of its occurrence:
(a) Dissolution of a CPA firm;
(b) The occurrence of any event that would cause the firm
to be in violation of RCW 18.04.195 or this rule; or
(c) An event that requires an amendment to a firm
license.
(8) What events require a firm amendment? A CPA firm
must provide written notification to the board, by submitting
a firm amendment form and the appropriate amendment fee,
within ninety days of the following events' occurrence:
(a) Admission or departure of an owner;
(b) Any change in the name of the firm; or
(c) Change in the managing licensee of the main office.
(9) How long do I have to correct noncompliance with
licensure requirements due to a change in ownership or an
owner's credentials? A CPA firm must notify the board within
ninety days of any change in ownership or lapse of an owner's
license, certificate, registration or practice privilege that
has caused the firm's license to be out of compliance with
licensure requirements and must correct the noncompliance
within ninety days of the lapse, unless the board grants a
longer time period due to individual hardship including, but
not limited to, financial hardship, critical illness, or
active military deployment.
[Statutory Authority: RCW 18.04.055(8), 18.04.195 and18.04.205
. 05-01-137, § 4-25-750, filed 12/16/04, effective
1/31/05; 03-24-033, § 4-25-750, filed 11/25/03, effective
12/31/03; 02-04-064, § 4-25-750, filed 1/31/02, effective
3/15/02; 00-11-074, § 4-25-750, filed 5/15/00, effective
6/30/00. Statutory Authority: RCW 18.04.055(8) and18.04.205
(3). 99-18-117, § 4-25-750, filed 9/1/99, effective
1/1/00. Statutory Authority: RCW 18.04.055(3), 18.04.205(3)
and 18.04.195. 96-12-061, § 4-25-750, filed 5/31/96,
effective 7/1/96. Statutory Authority: RCW 18.04.055. 93-22-089, § 4-25-750, filed 11/2/93, effective 12/3/93.]