Acquiring CPA firms Question
January 04, 2024
by a searcher in Atlanta, GA, USA
Hi, Does anyone know the rules around acquiring a CPA firm without having a CPA license? - I know that nearly all states allow for Non-CPA firms to be "minority" owners. - (My goal would be to acquire a majority ownership.)
But the reason for my question is some PE firms have been acquiring CPA firms over the last several years and I am wondering if anyone knows how they get around that?
Any thoughts or help is much appreciated!
Thanks, Walt
in Atlanta, GA, USA
Thank you for your explanation! It's very much appreciated!
That's great, I am reviewing that EY transaction this evening and tomorrow.
Thats interesting..
So, "Tax Services" do not fall under the same rules as the auditing firms? (I read that about auditors in online articles but could not find that answer in the state bylaws - Tax vs. audit ownership rule difference
That is very good news.
Would I need to set up some type of "admin" organization (The same way non-dentists have to set up a DSO). Or will I be able to own it directly through my entity? (Does this question make sense?)
Also, I read your bio, you look like you have great experience in this space (Accounting/ m&a advisory). If it works for you, I think it would be valuable for us to speak on how you may be able to help me with my venture?
Thank you again,
Walt
from Babson College in Boston, MA, USA
PE firms are getting around the regulations by splitting the firms into 2 successor firms, (1) being the attestation firm and (2) being non-attestation (i.e. consulting, tax). The PE firm then becomes a shareholder in firm #2 only while firm #1 remains owned by CPAs.
Take a look at the failed EY transaction, there's a lot of information about how that would've worked. It technically was creating a publicly traded company for firm #2 instead of PE but similar in concept.