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S1316................................................by JUDICIARY AND RULES
PROFESSIONAL SERVICE LIMITED LIABILITY COMPANY - Amends existing law to
provide that one or more persons meeting designated criteria may organize
and become a professional service limited liability company.
01/22 Senate intro - 1st rdg - to printing
01/23 Rpt prt - to Jud
02/04 Rpt out - rec d/p - to 2nd rdg
02/05 2nd rdg - to 3rd rdg
02/07 3rd rdg - PASSED - 30-0-5
AYES -- Andreason, Boatright, Branch(Bartlett), Bunderson,
Burtenshaw, Cameron, Davis, Deide, Dunklin, Frasure, Geddes, Goedde,
Hawkins, Hill, Ingram, Ipsen, Little, Lodge, Marley, Noh, Risch,
Sandy, Schroeder, Sims, Sorensen, Stegner, Stennett, Thorne, Wheeler,
Williams
NAYS -- None
Absent and excused -- Brandt, Darrington, Keough, King-Barrutia,
Richardson
Floor Sponsor - Dunklin
Title apvd - to House
02/08 House intro - 1st rdg - to Jud
03/08 Rpt out - rec d/p - to 2nd rdg
03/11 2nd rdg - to 3rd rdg
03/12 3rd rdg - PASSED - 67-0-3
AYES -- Aikele, Barraclough, Barrett, Bedke, Bell, Bieter, Black,
Block, Boe, Bolz, Bradford, Bruneel, Callister, Campbell, Clark,
Collins, Crow, Cuddy, Denney, Ellis, Ellsworth, Eskridge, Field(13),
Field(20), Gagner, Gould, Hadley, Hammond, Harwood, Henbest, Higgins,
Hornbeck, Jaquet, Jones, Kellogg, Kendell, Kunz, Lake, Langford,
Loertscher, Mader, Martinez, McKague, Meyer, Montgomery, Mortensen,
Moyle, Pearce, Pomeroy, Raybould, Ridinger, Roberts, Robison, Sali,
Schaefer, Sellman, Shepherd, Smith(33), Smith(23), Smylie, Stevenson,
Stone, Tilman, Wheeler, Wood, Young, Mr. Speaker
NAYS -- None
Absent and excused -- Deal, Pischner, Trail
Floor Sponsor - Clark
Title apvd - to Senate
03/13 To enrol
Rpt enrol - Pres signed
03/14 Sp signed - to Governor
03/22 Governor signed
Session Law Chapter 218
Effective: 07/01/02
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature Second Regular Session - 2002
IN THE SENATE
SENATE BILL NO. 1316
BY JUDICIARY AND RULES COMMITTEE
1 AN ACT
2 RELATING TO PROFESSIONAL SERVICE LIMITED LIABILITY COMPANIES; AMENDING SECTION
3 53-615, IDAHO CODE, TO PROVIDE THAT ONE OR MORE PERSONS MEETING DESIGNATED
4 CRITERIA MAY ORGANIZE AND BECOME A PROFESSIONAL SERVICE LIMITED LIABILITY
5 COMPANY.
6 Be It Enacted by the Legislature of the State of Idaho:
7 SECTION 1. That Section 53-615, Idaho Code, be, and the same is hereby
8 amended to read as follows:
9 53-615. PROFESSIONAL SERVICE LIMITED LIABILITY COMPANIES. (1) A group of
10 individuals One (1) or more persons duly licensed or otherwise legally autho-
11 rized to render the same or allied professional services within this state or
12 professional corporations, partnerships or limited liability companies all of
13 whose shareholders, partners or members are duly licensed or otherwise legally
14 authorized to render the same or allied professional services within this
15 state may organize and become a professional company under the provisions of
16 this chapter for the sole and specific purpose of rendering the same and spe-
17 cific professional service, allied professional services and services ancil-
18 lary to the professional services. This section shall not be deemed to autho-
19 rize allied professional services where the laws pertaining to specific pro-
20 fessions or the codes of ethics or professional responsibility of any of the
21 professions involved in such a proposed professional company prohibit such a
22 combination of professional services.
23 (2) No professional company may render professional services in this
24 state except through its managers, members, employees and agents who are duly
25 licensed or otherwise legally authorized to render such professional services
26 within this state. The term "employee" as used in this chapter does not
27 include clerks, secretaries, bookkeepers, technicians and other assistants who
28 are not usually and ordinarily considered by custom and practice to be render-
29 ing professional services to the public for which a license or other legal
30 authorization is required.
31 (3) Nothing contained in this section shall be interpreted to abolish,
32 repeal, modify, restrict or limit the law now in effect in this state applica-
33 ble to the professional relationship and liabilities between the person fur-
34 nishing the professional services and the person receiving such professional
35 services and to the standards for professional conduct. Any manager, member,
36 agent or employee of a professional company organized under this chapter shall
37 remain personally and fully liable and accountable for any negligent or wrong-
38 ful acts or misconduct committed by him, or by any person under his direct
39 supervision and control, while rendering professional services on behalf of
40 the professional company to the person for whom such professional services
41 were being rendered. The professional company shall be liable up to the full
42 value of its property for any negligent or wrongful acts or misconduct commit-
43 ted by any of its managers, members, agents or employees while they are
2
1 engaged on behalf of the professional company in the rendering of professional
2 services.
3 The relationship of a person whether as an individual, shareholder or a
4 professional corporation, partner of a partnership or member of a professional
5 company to a professional company organized under the provisions of this chap-
6 ter, with which such person is associated, whether as manager, member or
7 employee, shall in no way modify or diminish the jurisdiction over him of the
8 governmental authority or state agency which licensed, certified or registered
9 him for a particular profession.
10 (4) No professional company may offer membership to or accept as a member
11 anyone other than a person who is duly licensed or otherwise legally autho-
12 rized to render the same specific professional services as those for which the
13 company was organized or professional corporations, partnerships or limited
14 liability companies all of whose shareholders, partners or members are duly
15 licensed or otherwise legally authorized to render the same specific profes-
16 sional services as those for which the professional company was organized. No
17 member of a professional company shall enter into a voting trust agreement or
18 any other type of agreement vesting another person with the authority to exer-
19 cise the voting power of his membership.
20 (5) If any manager, member, agent or employee of a professional company
21 who has been rendering professional services within this state or accepts
22 employment that, pursuant to existing law, places restrictions or limitations
23 upon his continued rendering of such professional services, he shall cease to
24 be a member in such professional company in accordance with the provisions of
25 subsection (1)(k) of section 53-641, Idaho Code, and the remaining members of
26 the professional company shall take such action as is required to terminate
27 such membership.
28 (6) No member of a professional company may sell or transfer his member-
29 ship in such professional company except to another individual, professional
30 corporation, partnership or limited liability company eligible to be a member
31 of such professional company and except pursuant to the provisions of section
32 53-638, Idaho Code.
33 (7) The provisions of this section shall not be considered as repealing,
34 modifying or restricting the applicable provisions of law regulating the sev-
35 eral professions except insofar as such laws conflict with the provisions of
36 this section.
37 (8) As used in this section:
38 (a) The term "professional service" means any type of service to the pub-
39 lic which can be rendered by a member of any profession within the purview
40 of his profession. For the purpose of this chapter, the professions shall
41 be held to include the practices of architecture, chiropractic, dentistry,
42 engineering, landscape architecture, law, medicine, nursing, occupational
43 therapy, optometry, physical therapy, podiatry, professional geology, psy-
44 chology, certified or licensed public accountancy, social work, surveying,
45 and veterinary medicine, and no others.
46 (b) The term "professional company" means a limited liability company
47 organized under the provisions of this chapter for the sole and specific
48 purpose of rendering professional service and which has as its members
49 only natural persons who themselves are duly licensed or otherwise legally
50 authorized to render one (1) or more of the same professional services as
51 the professional company.
52 (c) The term "allied professional services" means professional services
53 which are so related in substance that they are frequently offered in con-
54 junction with one another as parts of the same service package to the con-
55 sumer.
STATEMENT OF PURPOSE
RS11689
Section 53-615 of the Idaho Code covers the organization of
Professional service limited liability companies. However,
unlike any other type of limited liability company, this section
requires that the organization be by "a group of individuals".
All other types of limited liability companies can be formed by a
single person. For example, Idaho Code 53-607 provides that
"One (1) or more persons may form a limited liability company by
signing articles of organization and delivering the signed
articles to the secretary of state for filing". There is no
logical reason to require more than one organizer in professional
limited liability companies, and this change will allow such
organization and make the professional limited liability company
organization parallel with the other types of organization of
limited liability companies in the Idaho Code.
FISCAL NOTE
This bill will have no fiscal impact.
CONTACT:
Robert L. Aldridge
1209 North Eighth Street
Boise, Idaho 83702-4297
Telephone: office: (208) 336-9880 home: (208) 888-4668
Fax: (208) 336-9882
e-mail: rlaldridge@hotmail.com
STATEMENT OF PURPOSE/FISCAL NOTE S 1316