Md. Code Regs. 09.24.04.04

Current through Register Vol. 51, No. 22, November 1, 2024

Section 09.24.04.04 - Nonlicensee Owners

A. An individual not licensed to practice certified public accountancy may have an ownership interest in a firm in which certified public accountancy is practiced, if the individual is an active participant in the business of the firm or its affiliated entities.

B. To determine whether a nonlicensee owner is an active participant in the business of the firm or its affiliated entities, the Board shall consider the:

(1) Number of hours the nonlicensee owner devotes to firm business or the business of its affiliated entities; and

(2) Type of activities the nonlicensee owner performs for the firm or its affiliated entities.

C. A nonlicensee owner may be a:

(1) Natural person; or

(2) Business entity, if each ultimate beneficial owner of equity interest in that entity is a natural person actively participating in the business of the firm or its affiliated entities.

D. A nonlicensee's ownership interest shall revert to the firm when the nonlicensee's active participation in the business of the firm or its affiliated entities ceases.

E. The Board may deny, suspend, or revoke a permit for a firm in which certified public accountancy is practiced if a nonlicensee having interest in the firm or its affiliated entities:

(1) Has been convicted under the laws of the United States or any state of a:

(a) Felony; or

(b) Misdemeanor containing an element of fraud or misrepresentation;

(2) Violates any provision of Business Occupations and Professions Article, Title 2, Annotated Code of Maryland; or

(3) Violates any provision of COMAR 09.24.

F. The name of an owner not licensed to practice certified public accountancy may not be included in the name of the certified public accountancy firm.

Md. Code Regs. 09.24.04.04

Regulation .04 amended effective May 18, 2009 (36:10 Md. R. 716)