231 CMR, § 4.04

Current through Register 1536, December 6, 2024

Section 4.04 - Practice in Corporations, Partnerships, Limited Liability Companies and Limited Liability Partnerships

(1)Definitions. As used in 231 CMR 4.04, the following terms shall have the following meanings unless the context otherwise requires:

Corporation - means any business or professional corporation established and organized under M.G.L. c. 156, M.G.L. c. 156A or M.G.L. c. 156B, or any "foreign corporation", as defined in M.G.L. c. 181, § 1.

Licensee - means a person duly licensed as an architect by the Board to engage in the practice of architecture.

Limited Liability Company or LLC - means any "limited liability company" or "foreign limited liability company", as defined in M.G.L. c. 156C, § 2, which performs or offers to perform architectural services in Massachusetts.

Limited Liability Partnership or LLP - means any "registered limited liability partnership" or "foreign registered limited liability partnership", as defined in M.G.L. c. 108A, § 2, which performs or offers to perform architectural services in Massachusetts.

Partnership - means any partnership organized and/or established under the laws of Massachusetts or any other jurisdiction, other than a limited liability partnership as defined in 231 CMR 4.04.

Practice of Architecture - means the "practice of architecture" as defined in M.G.L. c. 112, § 60A.

(2)Practice of Architecture by Corporations. A corporation may enter into agreements to perform, or hold itself out as able to perform, any of the services involved in the practice of architecture only if that corporation meets all of the following conditions:

(a) At least one officer of the corporation, whose status as an officer is established by the articles of organization or by-laws of that corporation, is duly registered as an architect in Massachusetts;

(b) All contracts or agreements by that corporation to perform architectural services in Massachusetts are executed on behalf of that corporation by the officer of the corporation who is duly registered as an architect in Massachusetts; and

(c) All architectural services performed by that corporation are performed either by the officer of the corporation who is duly registered as an architect in Massachusetts, or by other individuals who perform such work under the responsible control of the officer of the corporation who is duly registered as an architect in Massachusetts.

(3)Practice of Architecture by Partnerships. A partnership may enter into agreements to perform, or hold itself out as able to perform, any of the services involved in the practice of architecture only if that partnership meets all of the following conditions:

(a) At least one partner in that partnership is duly registered as an architect in Massachusetts;

(b) All contracts or agreements by that partnership to perform architectural services in Massachusetts are executed on behalf of that partnership by the partner who is duly registered as an architect in Massachusetts; and

(c) All architectural services performed by that partnership are performed either by the partner who is duly registered as an architect in Massachusetts, or by other individuals who perform those services under the responsible control of the partner who is duly registered as an architect in Massachusetts.

(4)Practice of Architecture by Limited Liability Companies. A limited liability company may enter into agreements to perform, or hold itself out as able to perform, any of the services involved in the practice of architecture only if that limited liability company meets all of the following conditions:

(a) At least one manager of the limited liability company (or at least one member in the case of a limited liability company in which management of the business is vested in one or more members) is duly registered as an architect in Massachusetts;

(b) All contracts or agreements by that limited liability company to perform architectural services in Massachusetts are executed on behalf of that limited liability company by a manager or member who is duly registered as an architect in Massachusetts;

(c) All architectural services performed by that limited liability company are performed either by a manager or member who is duly registered as an architect in Massachusetts, or by an individual who works under the responsible control of a member or manager of that limited liability company who is duly registered as an architect in Massachusetts; and

(d) That limited liability company maintains the level of professional liability insurance required by 231 CMR 4.04(7).

(5)Practice by Limited Liability Partnerships. A limited liability partnership, as defined in M.G.L. c. 108A, § 2, may enter into agreements to perform, or hold itself out as able to perform, any of the services involved in the practice of architecture only if that limited liability partnership meets all of the following conditions:

(a) At least one partner in that limited liability partnership is duly registered as an architect in Massachusetts;

(b) All contracts or agreements by that limited liability partnership to perform architectural services in Massachusetts are executed on behalf of that limited liability partnership by the partner who is duly registered as an architect in Massachusetts;

(c) All architectural services performed by that limited liability partnership are performed either by the partner who is duly registered as an architect in Massachusetts, or by other individuals who perform those services under the responsible control of the partner who is duly registered as an architect in Massachusetts; and

(d) That limited liability partnership maintains the level of professional liability insurance required by 231 CMR 4.04(7).

(6)Practice by Joint Ventures. A joint venture may enter into agreements to perform, or hold itself out as able to perform, any of the services involved in the practice of architecture, as long as at least one member of the joint venture is either an individual who is duly registered as an architect in Massachusetts, or a business organization which meets all of the applicable requirements of 231 CMR 4.04(2), 231 CMR 4.04(3), 231 CMR 4.04(4) or 231 CMR 4.04(5).

(7)Required Insurance and Capital Program for LLCs and LLPs.

(a) A limited liability company or limited liability partnership which performs or offers to perform architectural services in Massachusetts shall maintain in good standing professional liability insurance which meets the following minimum standards:

1. The insurance shall cover negligent acts, errors and omissions;

2. The insurance shall insure the limited liability company and its members, as required by M.G.L. c. 156C, § 65, or the limited liability partnership and its partners as required by M.G.L. c. 108A, § 45(8)(a);

3. The insurance shall be in an amount of at least $50,000, plus the product of $25,000 multiplied by the number of members or partners and the number of other employees of the limited liability company or limited liability partnership who are registered architects, but not in excess of $500,000 in the aggregate;

4. The requirements of 231 CMR 4.04(7)(a)3. shall be considered satisfied if the limited liability company or limited liability partnership maintains insurance sufficient to provide coverage at a level of at least $300,000 for each claim with an aggregate top limit of liability for all claims during any one year of at least $1,000,000;

5. The insurance required by 231 CMR 4.04(7)(a) may provide that it does not apply to:

a. Any dishonest, fraudulent, criminal or malicious act or omission of the insured limited liability company or limited liability partnership, or any partner, member or employee thereof; or

b. Bodily injury to, or sickness, disease or death of, any person; or

c. Injury to or destruction of any tangible property, including the loss of use thereof; or

d. Such other exclusions as are customarily inserted in professional liability insurance contracts for architects; and

6. Such insurance policies may contain reasonable provisions with respect to policy periods, territory, claims, deductibles, conditions and other usual matters.

(b) A limited liability company or limited liability partnership which performs or offers to perform architectural services in Massachusetts is not required to maintain the insurance required by 231 CMR 4.04(7)(a) if:

1. That limited liability company or limited liability partnership maintains a designated and segregated capital fund equal to the amount of insurance required by 231 CMR 4.04(7)(a)3. or 231 CMR 4.04(7)(a)4.; and

2. Such funds are specifically designated and segregated for the satisfaction of judgments against the limited liability company or its members, or the limited liability partnership or its partners, based on negligence, wrongful acts, or errors or omissions, by means of:

a. Deposit in trust, or in bank escrow, of such funds in the form of cash, bank certificates of deposit, or United States Treasury obligations; or

b. A bank letter of credit or insurance company bond.

(c) Upon any cancellation or other interruption in the insurance coverage required by 231 CMR 4.04(7)(a), or any failure to maintain the designated and segregated capital fund required by 231 CMR 4.04(7)(b), a limited liability company or limited liability partnership shall immediately cease and desist from performing, offering to perform, or holding itself out as able to perform, architectural services in Massachusetts until such time as that limited liability company or limited liability partnership is once again in compliance with 231 CMR 4.04(7). Failure to comply with 231 CMR 4.04(7)(c) shall constitute grounds for disciplinary action by the Board against any and all registered architects who are members, partners, managers or employees of that limited liability company or limited liability partnership.

231 CMR, § 4.04