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Advisory Notice – Statutory Amendments to Design Professional Service Corporations (DPC)

Beginning on July 21, 2024, Chapter 439 of the Laws of 2022 amended the Design Professional Corporation (DPC) law to allow an Employee Stock Ownership Plan (ESOP) to own 100% of a DPC. Organized under Business Corporation Law Section 1503, DPCs have the flexibility of offering an ownership interest to non-licensees who are employees of the corporation.  The law permits the incorporation of design professional service corporations (engineering, architecture, landscape architecture, land surveying, geology or any combination thereof) first organized on or after January 1, 2012, in which non-professionals may own less than 25 percent of the shares and may constitute less than 25 percent of director and officer positions.

Shareholders within a DPC may include ESOPs and employees of the corporation who are not licensed as design professionals, provided that:

  • Greater than 75% of the outstanding shares of stock in the corporation are owned by design professionals and an ESOP (or ESOPs) with greater than 75% of the plan’s voting trustees or greater than 75% of the plan’s committee members being design professionals;
  • An ESOP, either in part or in its entirety, may not constitute part of the greater than 75% owned by design professionals unless greater than 75% of the plan’s voting trustees or greater than 75% of the plan’s committee members are design professionals;
  • Greater than 75% of the directors are design professionals;
  • Greater than 75% of the officers are design professionals;
  • The president, the chairperson of the board of directors and the chief executive officer or officers are design professionals; and
  • The single largest shareholder is either a design professional or an ESOP with greater than 75% of the plan’s voting trustees being design professionals and greater than 75% of the plan’s committee member’s being design professionals.

For additional information on DPC’s, see our Corporate Entities website.