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OPINION
Proactively address this blind spot early in the process to ensure your firm remains fully compliant, operational, and set for long-term success. The hidden risk in ownership transitions
A s architecture and engineering firms navigate mergers, acquisitions, and internal succession plans, one critical compliance risk is often left behind: state firm professional licensing . You may successfully transition ownership, only to discover after that your firm no longer meets the requirements to legally operate as an architecture or engineering firm in a state.
Karen Poist, CPA
THE COMPLIANCE RISK YOU DIDN’T PLAN FOR. When your firm undergoes an ownership transition, whether through an M&A deal, employee stock ownership plan, or other internal succession, the ownership structure may change in a way that disqualifies the firm from maintaining its firm professional license in one or more states. By the time you realize it, the consequences can be costly, ranging from delayed projects to penalties and reputational harm or even offers of ownership to key employees that might need to be rescinded. Every state has its own professional licensing requirements for architects and engineers. These typically include:
Ownership/officer requirements
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■ Qualified Licensed Professional in Responsible Charge These requirements are legal prerequisites to provide design services in a state, and without compliance, a firm can subsequently be prohibited from providing these services. Licensing issues often go unnoticed during ownership planning. Unlike tax implications or deal structures, firm licensing is frequently overlooked. Firm licensing should not be treated as a box to check. It’s a strategic asset that protects your firm’s ability to operate, bid on projects, and maintain credibility.
Brad Wilson, CMA, MBA
See KAREN POIST & BRAD WILSON, page 4
Entity structure requirements
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THE ZWEIG LETTER JUNE 2, 2025, ISSUE 1588
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