2002 Legislation
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SENATE BILL NO. 1316 – Professional service LLC, criteria


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Daily Data Tracking History

S1316................................................by JUDICIARY AND RULES
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,
      NAYS -- None
      Absent and excused -- Brandt, Darrington, Keough, King-Barrutia,
    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

Bill Text

  ||||              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
  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:
 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
  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 / Fiscal Impact

                       STATEMENT OF PURPOSE

     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.

          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