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HB 1156

AN ACT to create and enact a new section to chapter 43-02.2 of the North Dakota Century Code, relating to ownership of accounting firms by qualified plans; and to amend and reenact subsection 3 of section 10-31-04 and subsection 3 of section 43-02.2-06 of the North Dakota Century Code, relating to minority ownership of an accounting firm.

69th Legislative Assembly (2025-26) Introduced by Landon Bahl and 10 co-sponsors

ND HB 1156 lets a North Dakota accounting firm be wholly owned by a qualified retirement plan (ESOP) if CPAs/LPAs retain majority ownership, ND licenses, and board control.

Filed with Secretary Of State 03/24
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Bill Summary · HB 1156

Summary — North Dakota HB 1156 (2025)

Title: AN ACT to create and enact a new section to chapter 43‑02.2 of the North Dakota Century Code, relating to ownership of accounting firms by qualified plans; and to amend and reenact subsection 3 of section 10‑31‑04 and subsection 3 of section 43‑02.2‑06, relating to minority ownership of an accounting firm.

Main purpose / intent

HB 1156 modifies North Dakota law to (1) expressly allow certain professional organizations to have minority owners, (2) clarify existing ownership rules for accounting firms, and (3) create an explicit pathway for an accounting firm to be wholly owned by a qualified retirement plan (for example, a 401(a) plan or ESOP), subject to conditions intended to preserve professional control by licensed accountants.

Key provisions

  • Amends NDCC § 10‑31‑04(3):

    • Confirms that a professional organization created under the chapter to provide services under chapters 43‑02.2 and 43‑03 may have one or more minority owners if expressly authorized.

  • Amends NDCC § 43‑02.2‑06(3):

    • Retains the general rule that applicants for an initial permit or renewal must show a simple majority of financial interest and voting rights belong to licensees (CPAs or LPAs) and that accountants practicing in the state hold valid North Dakota certificates/licenses.
    • Explicitly allows the minority ownership stake of a firm to be held by an individual or by a “qualified plan” as defined by Internal Revenue Code sections 401(a) and 4975(e)(7), including employee stock ownership plans (ESOPs).

  • Adds a new section to chapter 43‑02.2 — “Permit to practice — Firm wholly owned by qualified plan”:

    • Permits a firm to be wholly (100%) owned by a qualified plan (per IRC §§ 401(a) and 4975(e)(7)) if the applicant demonstrates:
    • At least 51% of the plan’s beneficial ownership is held by certified public accountants or licensed public accountants of this state or another recognized jurisdiction;
    • All CPAs/LPA practitioners of the firm whose principal place of business is in North Dakota and who perform services in the state hold valid North Dakota certificates/licenses; and
    • A simple majority of the firm’s board of directors are CPAs or LPAs of the state or another recognized jurisdiction.
    • The firm and owners must comply with all board rules regarding ownership.

Who is affected

  • Accounting firms operating in North Dakota (including sole proprietorships, partnerships, professional corporations/organizations).
  • Current and prospective owners or investors in accounting firms (employees, ESOPs, qualified retirement plans).
  • Licensed CPAs and LPAs in North Dakota (licensure and board‑composition requirements preserved).
  • North Dakota State Board of Accountancy (oversight/enforcement of ownership and permit rules).

Policy/Practical impacts

  • Enables succession and ownership models (notably ESOPs/qualified plans) that may facilitate transitions, retirement planning, or employee ownership while maintaining licensed‑accountant control.
  • Preserves professional governance by requiring licensee majorities on financial ownership (in most cases) and on boards where a qualified‑plan owns the firm.
  • Requires continued compliance with board rules; does not change licensure requirements for practitioners.

Legislative / procedural status

  • Introduced: November 12, 2024.
  • Read first time: March 7, 2025; referred to Public Education (per bill record).
  • Passed both chambers with unanimous recorded votes (House: 91–0; Senate: 47–0) as reflected in enrollment documents.
  • Filed with Secretary of State: March 24, 2025 (per provided status).
  • Statutory text amends NDCC §§ 10‑31‑04 and 43‑02.2‑06 and adds a new section in chapter 43‑02.2.

If you would like, I can: (a) extract the exact statutory language changes ready for insertion into a legal memo, (b) compare this bill to other states’ rules about firm ownership/ESOPs for accounting firms, or (c) outline compliance steps an accounting firm would need to take to qualify for 100% plan ownership.

Compiled from official sources — confirm details with the bill’s official record.

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