What this is: In New York State, the Education Department's Office of the Professions requires professional entities, such as Professional Corporations (PCs), Professional Limited Liability Companies (PLLCs) and Limited Liability Partnerships (LLPs), to obtain consent before they can be formed. This process ensures compliance with state laws governing regulated professions like medicine, law, engineering and accounting.
What this means: Obtaining this consent confirms that the individuals forming the entity are properly licensed in New York and that the business is authorized to provide services within its profession. This step is essential to meet legal requirements, protect public trust and ensure the integrity of professional services offered in the state.
New York’s Consent Requirements for Professional Entities
New York is somewhat unusual in that it requires registered entities, such as corporations and limited liability companies (LLCs), to get approval or consent from other New York state agencies prior to filing in many different situations. This commonly comes up when the company uses a restricted word in its name or does business in particular industries like insurance or education.
Even if the name is not one that will cause New York to reject the document without consent attached from the appropriate agency, it’s important to be aware of the activities that trigger the need for consent to avoid future difficulties. The New York State Education Department’s (NYSED) Office of the Professions and Office of Counsel, the Department of Financial Services and the Department of Taxation and Finance are agencies whose approval is often required for corporate filings.
Today we’re going to explore the process of obtaining consent from the NYSED Office of Professions to form PCs, PLLCs or LLPs.
Requirements for Professional Limited Liability Entities
NYSED’s Office of the Professions, in conjunction with the State Boards for the Professions, administers regulations for more than 50 professions in New York. Unless practicing as individuals or general partnerships, entities practicing these professions must register as a PC or a PLLC.
General partnerships practicing a profession can register as an LLP, if limited liability status is desired but unlike PCs and PLLCs, LLPs do not need to obtain consent. While they need to abide by the same entity-naming rules (discussed below), LLPs only need to file a certified copy of their registration certificate, as filed with the Secretary of State, with NYSED. However, CPA partnerships (both general and limited liability) must register with the NYS Board for Public Accountancy.
Excluded from the NYSED Office of Professions regulatory purview is the legal profession. For professional entities practicing law, a Certificate of Good Standing for the attorneys who make up the entity must be obtained from the New York State Bar Association and submitted with a Certificate of Incorporation or Articles of Organization.
For PCs and PLLCs practicing other professions, the process for obtaining approval gives these entities authorization (by way of a NYS Education Department Certificate of Authority) to practice their profession in New York and enables them to file formation or qualification documents with the Secretary of State.
Entity Name Rules
The following rules apply to both true and assumed names of professional entities seeking consent to do business in New York:
- The name of the entity must appropriately describe the profession to be practiced. The preferred format is to list the names of the owning professionals followed by the profession to be practiced and the appropriate corporate indicator (PC, PLLC, etc.).
- If the name desired contains words, initials or abbreviations not commonly used in reference to the profession, a letter of explanation for those words must be provided.
- If a specialty is mentioned, proof of the entity’s authority to practice the specialty is required, such as Board Certification.
- A physician is only permitted to use the “MD” designation if that is their specific academic degree.
- If the name of the entity references a group, there must be more than one professional shareholder or member.
- The entity’s name should not include the following words, considered to be misleading:
| Cure Healing International Management Co. National Network |
Partners |
| Advanced Best Exceptional Expert Outstanding |
Premier |
*Please note that neither word list is comprehensive. The NYSED Office of the Professions may determine that other words are misleading or a claim of superiority.
Foreign entities (those not initially formed in New York) are required to follow similar rules regarding naming of domestic entities as discussed earlier. If the true name of the foreign entity does not reference the name of the profession to be practiced or does not otherwise meet the requirements, the entity will need to register an assumed name that does comply with New York’s naming rules.
If you’d like to work with a team that can handle your corporate filings, corporate dissolutions and more, head on over to our Corporate Services page.
Rules for Ownership and Management of the Entity
Domestic Entities
- All shareholders, officers and directors or members and managers must be licensed to practice the profession in New York.
Foreign Entities
- All shareholders, officers and directors or members and managers must be licensed to practice the profession in the domestic jurisdiction.
- Each individual who will be practicing the profession in New York State must be licensed in New York, however:
- For corporations or LLCs in health services, each shareholder, officer and director or manager and member must be licensed to practice said profession in New York State and the domestic jurisdiction.
- For LLCs in the design professions (such as architecture, engineering or land surveying) each manager or member must be licensed to practice both in New York and the domestic jurisdiction.
How Long Does it Take to Receive Approval?
Before diving into the details of obtaining consent, please know that one of the first things you’ll need is patience! Approval for both domestic and foreign entities seeking consent from NYSED is approximately 8-10 weeks. There have been both shorter and longer time frames in the past (and the time frame may change again) but at this point it is important to plan ahead and anticipate about 2+ months to complete the process.
Domestic Entity Consent Requirements
To obtain consent for a domestic entity name, the following items must be submitted to the NYS Office of the Professions:
|
Professional |
Professional Limited |
|
Draft Certificate of Incorporation |
Draft Articles of Organization (per Section 1203 of the Limited Liability Company Law). |
|
List of the names, license numbers and residence addresses for all shareholders, directors and officers. All named parties must be licensed in the profession to be practiced by the entity. |
List of the names, license numbers and residence addresses for all members and managers. All named parties must be licensed in the profession to be practiced by the entity. |
|
Professional Corporations Contact Information Form (available on the Office of the Professions website) and an Attestation signed by the president listing all current principals, their license # and residence address, plus any required proof of specialty. |
Professional Corporations Contact Information (available on the Office of the Professions website) and an Attestation signed by a managing member listing all current principals, their license # and residence address, plus any required proof of specialty. |
|
Fee for Consent: |
Fee for Consent: |
Foreign Entity Consent Requirements
For foreign professional entities seeking consent to do business in New York, the following items must be submitted to the NYSED Office of the Professions:
|
Professional |
Professional Limited |
|
Application for Authority |
Application for Authority |
|
Copy of the Certificate of Incorporation and any amendments from the domestic jurisdiction. |
Copy of the Certificate of Incorporation and any amendments from the domestic jurisdiction. |
|
Professional Corporations Contact Information Form, Affidavit and Attestation signed by the president, listing all the current shareholders, officers and directors, along with license numbers for the individuals practicing in New York or required to be licensed in New York based on the rules shown above. |
Professional Corporations Contact Information Form and Affidavit and Attestation, signed by a managing member, listing all the current members/managers, along with license numbers for the individuals practicing in New York or required to be licensed in New York based on the rules shown above. |
|
Evidence of licensure in the original jurisdiction for each shareholder, officer and director. |
Evidence of licensure in the original jurisdiction |
|
Fee for Consent: |
Fee for Consent: |
Important Tips
Whether seeking consent for a domestic or foreign professional entity, here are a few additional things to keep in mind:- Signatures and names of professionals listed in the documents must match the names as they appear on their professional licenses.
- The corporate designator must be “Professional Corporation” or PC.
- If the designation MD/M.D. is used anywhere in the documents, proof of that degree must be provided.
- The statement of purpose must match the professional title used.
Next Steps After Receiving Consent
Once you receive consent from the State Board of Professions, you are then able to file the Certificate of Incorporation or Articles of Organization with the Secretary of State. When submitting the filing, be sure to request an extra certified copy, as the final step of the process is to file a certified copy of the filed formation document with the Office of Professional Licensing. Professional Corporations must submit $20 with the certified copy as a filing fee, while there is no fee for professional LLCs.
Most states license entities practicing professions such as medicine, dentistry or engineering. What makes New York State unusual is that the licensing process must be started by obtaining consent, prior to filing the documents with the Secretary of State. The Department of Education has many particular rules regarding the name and organizational structure of professional entities. Requiring that consent be provided prior to filing the formation document ensures the entity will not have to make changes later to comply with these requirements.
Before you submit, it’s important to pay close attention to all of the requirements. As approval currently takes 2 months or more, it is even more important to obtain the consent on the first submission. Carefully reviewing documents to ensure compliance with the rules can help ensure that happens.
Other Reads You Might Enjoy
What is a Professional Corporation?
Unlike a general business corporation, a Professional Corporation is an entity structure with the purpose of providing professional services. It is established typically by a group of individuals who are licensed in the same profession. Each state varies on whether a specific profession must form a Professional Corporation or can provide its professional services through the usual entity types (i.e., business corporation, limited liability company, partnership, limited liability partnership). To learn more, refer to our article, The Professional Corporation: Is it the Right Entity Type for Your Business?
What is a series LLC?
Twenty-one states now allow for the establishment of series LLCs, a unique structure that allows an LLC to create separate series that have separate members and managers, maintain separate assets and pursue separate business purposes and objectives from the LLC that created them (the master LLC) and other series of the LLC.
Most importantly, the series is not liable for the debts and obligations of the master LLC or the other series (likewise, the master LLC is not liable for the debts and obligations of the series) if certain criteria are met. Want to learn more? Head on over to our article, Qualification of Series LLCs to Do Business in Another State.
This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.
