# COMAR Title 09 — Maryland Department of Labor

## Subtitle 24 — Board of Public Accountancy

### Chapter 04 — Firm Permits and Ownership

**Authority:** Business Occupations and Professions Article, §§2-207 and 2-401—2-403, Annotated Code of Maryland

**Administrative History:** Effective date: September 29, 2003 (30:19 Md. R. 1331)

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

#### Regulation .01 Permits.

*COMAR 09.24.04.01*

Except sole proprietorships, any firm in which certified public accountancy is practiced shall have a permit issued by the Board under the requirements in Business Occupations and Professions Article, Title 2, Subtitle 4, Annotated Code of Maryland.

#### Regulation .02 Ownership Interest.

*COMAR 09.24.04.02*

A majority of the ownership interest, in terms of financial interests and voting rights, of a firm in which certified public accountancy is practiced shall be owned by individuals licensed to practice certified public accountancy in this State or another state.

#### Regulation .03 Registration of the Firm.

*COMAR 09.24.04.03*

Any firm in which certified public accountancy is practiced shall designate and identify to the Board an individual licensed to practice certified public accountancy in this State who shall be responsible for the proper registration of the firm and communication with the Board.

#### Regulation .04 Nonlicensee Owners.

*COMAR 09.24.04.04*

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.