Credit: cutimage/Adobe Stock Full ESOP Ownership Will Be Allowed for New York Design Professional Corporations
New legislation provides significantly expanded opportunities for employee owned architecture, professional engineering, land surveying, landscape architecture, and geology corporations to operate in New York. With the new ESOP ownership opportunities, the door is wide open for employee owned professional design corporations wishing to operate in New York, provided they do it through a New York professional design service corporation, and further provided they have New York licensed management.
November 23, 2022 at 11:00 AM
8 minute read
On July 21, 2022, an amendment to New York Business Corporation Law (BCL) was signed into law by the New York Governor on July 21, 2022, which will take effect as of July 21, 2024 (2022 N.Y. Laws Chapter 439 §5), which amendment will allow 100% ownership of design professional service corporations (DPCs) by one or more employee stock ownership plans (ESOPs). This is a significant departure from the current ESOP ownership limitations of just below 25%. 100% ownership will only be permitted in situations where the ESOP meets the New York licensee management requirements further specified below. An ESOP that does not meet these requirements will remain limited to below 25% ownership (and cannot be the single largest shareholder).
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