BP BHEAD INT S

AN ACT Relating to health care professionals doing business as professional service corporations or limited liability companies; and amending RCW 18.100.050 and 25.15.045.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1. RCW 18.100.050 and 1991 c 72 s 3 are each amended to read as follows:

(1) An individual or group of individuals duly licensed or otherwise legally authorized to render the same professional services within this state may organize and become a shareholder or shareholders of a professional corporation for pecuniary profit under the provisions of Title 23B RCW for the purpose of rendering professional service((~~: PROVIDED, That~~)). One or more of such legally authorized individuals shall be the incorporators of such professional corporation((~~: PROVIDED FURTHER, That~~)).

(2) Notwithstanding any other provision of this chapter, registered architects and registered engineers may own stock in and render their individual professional services through one professional service corporation((~~: PROVIDED FURTHER, That licensed~~)).

(3) Notwithstanding any other provision of this chapter, health care professionals((, providing services to enrolled participants either directly or through arrangements with a health maintenance organization registered under chapter 48.46 RCW or federally qualified health maintenance organization,)) who are licensed or certified under this title may own stock in and render their individual professional services through one professional service corporation((~~: AND PROVIDED FURTHER, That~~)) without regard to whether such corporation includes, as shareholders, directors, officers or employees, health care professionals licensed or certified under different chapters of Title 18 RCW. For purposes of this exemption, references to "same specific professional services" or "same professional services" or similar words shall mean professional services rendered by a licensed or certified health care professional.

(4) Professionals may organize a nonprofit nonstock corporation under this chapter and chapter 24.03 RCW to provide professional services, and the provisions of this chapter relating to stock and referring to Title 23B RCW ((~~shall~~)) do not apply to any such corporation.

Sec. 2. RCW 25.15.045 and 1994 c 211 s 109 are each amended to read as follows:

(1) A person or group of persons licensed or otherwise legally authorized to render professional services within this state may organize and become a member or members of a professional limited liability company under the provisions of this chapter for the purposes of rendering professional service. A "professional limited liability company" is subject to all the provisions of chapter 18.100 RCW that apply to a professional corporation, and its managers, members, agents, and employees shall be subject to all the provisions of chapter 18.100 RCW that apply to the directors, officers, shareholders, agents, or employees of a professional corporation, except as provided otherwise in this section. Nothing in this section prohibits a person duly licensed or otherwise legally authorized to render professional services in any jurisdiction other than this state from becoming a member of a professional limited liability company organized for the purpose of rendering the same professional services. Nothing in this section prohibits a professional limited liability company from rendering professional services outside this state through individuals who are not duly licensed or otherwise legally authorized to render such professional services within this state. Notwithstanding RCW 18.100.065, persons engaged in a profession and otherwise meeting the requirements of this chapter may operate under this chapter as a professional limited liability company so long as:

(a) At least one manager of the company is duly licensed or otherwise legally authorized to practice the profession in this state; and

(b) Each resident manager or member in charge of an office of the company in this state and each resident manager or member personally engaged in this state in the practice of the profession is duly licensed or otherwise legally authorized to practice the profession in this state.

(2) If the company's members are required to be licensed to practice such profession, and the company fails to maintain for itself and for its members practicing in this state a policy of professional liability insurance, bond, or other evidence of financial responsibility of a kind designated by rule by the state insurance commissioner and in the amount of at least one million dollars or such greater amount as the state insurance commissioner may establish by rule for a licensed profession or for any specialty within a profession, taking into account the nature and size of the business, then the company's members shall be personally liable to the extent that, had such insurance, bond, or other evidence of responsibility been maintained, it would have covered the liability in question.

(3) For purposes of applying the provisions of chapter 18.100 RCW to a professional limited liability company, the terms "director" or "officer" shall mean manager, "shareholder" shall mean member, "corporation" shall mean professional limited liability company, "articles of incorporation" shall mean certificate of formation, "shares" or "capital stock" shall mean a limited liability company interest, "incorporator" shall mean the person who executes the certificate of formation, and "bylaws" shall mean the limited liability company agreement.

(4) The name of a professional limited liability company must contain either the words "Professional Limited Liability Company," or the words "Professional Limited Liability" and the abbreviation "Co.," or the abbreviation "P.L.L.C." provided that the name of a professional limited liability company organized to render dental services shall contain the full names or surnames of all members and no other word than "chartered" or the words "professional services" or the abbreviation "P.L.L.C."

(5) Subject to the provisions in article VII of this chapter, the following may be a member of a professional limited liability company and may be the transferee of the interest of an ineligible person or deceased member of the professional limited liability company:

(a) A professional corporation, if its shareholders, directors, and its officers other than the secretary and the treasurer, are licensed or otherwise legally authorized to render the same specific professional services as the professional limited liability company; and

(b) Another professional limited liability company, if the managers and members of both professional limited liability companies are licensed or otherwise legally authorized to render the same specific professional services.

(6) Notwithstanding any other provision of this chapter, health care professionals who are licensed or certified under this title may own stock in and render their individual professional services through one limited liability company without regard to whether such company includes, as managers, members, agents, or employees, health care professionals licensed or certified under different chapters of Title 18 RCW. For purposes of this exemption, references to "same specific professional services" or "same professional services" or similar words shall mean professional services rendered by a licensed or certified health care professional.