(a) A firm providing attest services or using the titles CPAs, CPA Firm, Certified Public Accountants, Certified Public Accounting Firm, Auditing Firm, or a variation of any of those titles shall do so only through a licensed firm.
(b) To be eligible for a firm license, the firm must show:
  (1) that a majority of the ownership of the firm, in terms of both financial interests and voting rights, belongs to individuals who hold certificates issued under this chapter or are licensed as a CPA in another state; or
  (2) that when the firm ownership includes professional organizations, as defined in §301.003(7) of the Texas Business Organizations Code, the professional organizations must be owned by individuals that hold a certificate issued under this chapter or are licensed in another state; and
  (3) that all attest services performed by the firm in this state are under the supervision of an individual within the firm who holds a certificate issued by the board or by another state that has not been suspended or revoked.
(c) Financial interests shall include but shall not be limited to stock shares, capital accounts, capital contributions, and equity interests of any kind. Financial interests also include contractual rights and obligations similar to those of partners, shareholders or other owners of an equity interest in a legal entity.
(d) Voting rights shall include but shall not be limited to any right to vote on the firm's ownership, business, partners, shareholders, management, profits, losses and/or equity ownership.
(e) Interpretive comment: A licensee offering non-attest services as defined in §901.005 of the Act (relating to Findings; Public Policy; Purpose) through an unlicensed firm in accordance with §501.81(d) of this title may not use the CPA designation in the unlicensed firm's name. For example: John Smith may not use the firm name "John Smith, CPA" unless the firm is licensed by the board.
(f) Interpretive comment: §901.351(a) of the Act (relating to Firm License Required), §501.81(a) of this title and subsection (a) of this section require a firm license in order to use the CPA designation except as provided for in §501.81(d) of this title.
(g) Interpretive comment: A professional organization includes a professional corporation or professional limited liability company.

Source Note: The provisions of this §513.10 adopted to be effective August 4, 2004, 29 TexReg 7307; amended to be effective August 17, 2008, 33 TexReg 6376; amended to be effective June 11, 2014, 39 TexReg 4433; amended to be effective April 13, 2016, 41 TexReg 2592; amended to be effective June 7, 2017, 42 TexReg 2935