May a Florida lawyer hold a share of stock in a professional service corporation formed by a group of accountants?

Plain-English summary

A member proposed forming a professional corporation with a group of accountants, doing the legal work involved in the incorporation and taking and holding one share of stock in the corporation. The committee pointed to the terms of the professional service corporation act (F.S. 621.01 et seq.).

The committee quoted the statute's limits: the act provides for incorporation of individuals to render "the same professional service" for which they are licensed; defines a "professional corporation" as one whose shareholders are "only individuals who themselves are duly licensed" to render the same professional service as the corporation; and bars issuing stock "to anyone other than an individual who is duly licensed" to render that same specific professional service. Reading those sections together, the committee concluded that the accounting firm considering incorporation could not have the attorney take and hold a share of stock in it, because a lawyer is not licensed to render the accountants' professional service.

The opinion notes that the second half of the text, reproduced below, was omitted from previously published versions of the opinion.

Currency note

This opinion was issued in 1961, before The Florida Bar's adoption of the 2006 revisions to the Rules of Professional Conduct. The opinion applied former Canon 35 of the Canons of Professional Ethics and the professional service corporation statute then in force; a lawyer's association with nonlawyers in a business entity is now addressed by Rules 4-5.4 and 4-5.7 of the Rules Regulating The Florida Bar (Model Rules 5.4 and 5.7). The professional corporation statute has also been amended since 1961. Treat this page as historical context, not current guidance. Verify against the current rules and statute before relying on any specific requirement mentioned here.

Common questions

Q: Could a lawyer own even one share in an accountants' professional service corporation?

A: No. The committee concluded that the professional service corporation act limited shareholders to individuals licensed in the same profession as the corporation, so a lawyer could not legally hold stock in an accountants' corporation.

Q: Did the result turn on the ethics rules or on the statute?

A: The committee rested its conclusion on the terms of the professional service corporation act (F.S. 621.01 et seq.), which it quoted at length, rather than on an extended ethics analysis.

Background and rules framework

The opinion applied former Canon 35 of the Canons of Professional Ethics and the Florida professional service corporation statute (F.S. 621.01 et seq.). A lawyer's association with nonlawyers in a corporate or business entity is now addressed by Rules 4-5.4 and 4-5.7 of the Rules Regulating The Florida Bar (Model Rules 5.4 and 5.7). The committee's analysis turned on the statute's same-profession limits on who may hold shares in a professional service corporation.

Citations and references

Rules of Professional Conduct:

• Canon 35 [Canons of Professional Ethics; see current Rules 4-5.4, 4-5.7]

Statutes:

• F.S. 621.01 et seq. (Professional Service Corporation Act), Sections 1, 3(2), 6, 8, 9

See also

• FL Bar Ethics Op. 64-25: Multidisciplinary Building Services Corporation
• FL Bar Ethics Op. 63-37: Condominium Consulting Corporation
• FL Bar Ethics Op. 65-4: Partnership With a Nonlawyer for Agency Practice

Source

• Landing page: https://www.floridabar.org/etopinions/etopinion-61-19/
• Original PDF: https://www-media.floridabar.org/uploads/2017/04/FL-Bar-Ethics-Op-61-19-2.pdf

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

FLORIDA BAR ETHICS OPINION
OPINION 61-19
September 21, 1961
Advisory ethics opinions are not binding.
A lawyer may not hold stock in a professional service corporation of accountants.
Note: The second half of Opinion 61-19 as it appears below was omitted from previous published versions of the opinion.
Canon: 35 [See current 4-7.18]
Chairman Holcomb stated the opinion of the committee:
A member of The Florida Bar has submitted an inquiry relative to a proposed professional corporation entered into by himself and a group of accountants. We call his attention to the fact that the act providing for the creation of professional service corporations (F.S. 621.01 et. seq.) specifically provides as follows:
Section 1: "It is the legislative intent to provide for the incorporation of an individual or group of individuals to render the same professional service to the public for which such individuals are required by law to be licensed or to obtain other legal authorization."
Section 3: "(2) The term 'professional corporation' means a corporation which is organized under this act for the sole and specific purpose of rendering professional service and which has as its shareholders only individuals who themselves are duly licensed or otherwise legally authorized within this state to render the same professional service as the corporation."
Section 6: "No corporation organized and incorporated under this Act may render professional services except through its officers, employees, and agents who are duly licensed or otherwise legally authorized to render such professional services. . . ."
Section 8: "No corporation organized under this act shall engage in any business other than the rendering of the professional services for which it was specifically incorporated. . . ."
Section 9: "No corporation organized under the provisions of this act may issue any of its capital stock to anyone other than an individual who is duly licensed or otherwise legally authorized to render the same specific professional service as those for which the corporation was incorporated. . . ."
It would, therefore, appear that the firm of accountants considering incorporation, asking the attorney's services to do the legal work involved and desiring him to take and hold one share of stock therein, could not legally do so under the terms of the act.