Engineering and architecture firm ownership: the New York sale that is void, and the deadline that starts when the engineer retires

A buyer who is not a New York engineer cannot purchase a New York engineering PLLC. The statute says a member may transfer a membership interest only to someone eligible to be a member, and “any sale or transfer in violation of such restrictions shall be void” (N.Y. Ltd. Liab. Co. Law § 1211). The signed purchase agreement, the wire and the closing certificate do not move the interest. The seller still owns it.

Design firms are where licensing law splits most sharply between states. Some states regulate who owns the firm. Others regulate only who is in charge of the work, and in those states the license rests on one employee whose departure starts a clock. This page covers New York, California, Illinois, Texas and Florida, and what each does to a sale.

In New York, a sale of an engineering PLLC interest to a non-engineer is void, not voidable.

Two ways a state protects the license

The ownership states set a percentage. Michigan lets a firm offer architecture, engineering or surveying only if at least two-thirds of its principals are licensees (Mich. Comp. Laws § 339.2010). Virginia requires licensees to hold two-thirds of a design-profession PLLC’s membership interests (Va. Code § 13.1-1111). New York requires all of a PLLC’s members to be licensed.

The control states set no percentage. Florida lets any business organization practice engineering if a Florida-licensed engineer qualifies it, and if that qualifier leaves, the firm has 60 days to requalify and generally may not practice until it does (Fla. Stat. § 471.023). Florida architecture firms need an architect as qualifying agent and must report changes within 30 days (Fla. Stat. § 481.219). Texas requires registration and a full-time licensee. In a control state, an investor can own the whole firm. What the investor cannot own is the license, which stays with the person.

New York: every owner licensed, and three narrow doors

New York is the strictest of the large states. A New York PLLC may practice engineering “if, and only if, all members are licensed in New York State,” according to the State Education Department, and a professional corporation requires every shareholder, officer and director to be licensed. Architecture is limited to the same licensed-owner forms; an ordinary LLC is not one of them.

The statute handles two exits and leaves out a third. A member who becomes legally disqualified must sever employment and financial interest, and disqualification is treated as an irrevocable offer to sell the interest to the company (N.Y. Ltd. Liab. Co. Law § 1209). On death or disqualification, the company must buy the interest within six months, at book value as of the end of the prior month, unless the operating agreement sets a different price or shorter period (§ 1210). Retirement is neither. A member who simply stops practicing is not disqualified and has not died, so the statute supplies no buyout and no price.

A New York design PLLC whose operating agreement says nothing about retirement has no statutory way to buy out a retiring member.

The structuring consequence: the retirement buyout in a New York design PLLC exists only if the operating agreement writes it, including the price, the payment terms and the eligible buyer, because the only buyer the statute allows is another licensee or the company.

The first door for non-licensees is the design professional service corporation. Licensed design professionals, together with a qualifying employee stock ownership plan, must own more than 75% of its shares; more than 75% of directors and officers must be design professionals; the president, board chair and chief executive must be design professionals; and the single largest shareholder must be a design professional or the plan (N.Y. Bus. Corp. Law § 1503(b-1)). The Education Department’s guidance describes the non-licensee holders as employees of the corporation and the plan. Whether an outside investor who does not work there may hold any shares was not confirmed for this page. The corporation certifies every three years that it met the tests for the whole period.

The second door is old. A general business corporation may practice engineering only if it was practicing on April 15, 1935 and continuously since, with a licensed engineer as chief executive, and it cannot transfer its corporate rights without the department’s consent (N.Y. Educ. Law § 7209(6)). The third is the mixed firm: engineers, surveyors, geologists, architects and landscape architects may join in one partnership, professional corporation or design corporation (§ 7209(4)).

A New York firm offering engineering, land surveying or geology also needs a certificate of authorization: $125 for three years and $75 for each three-year renewal, last verified October 2026 (N.Y. Educ. Law § 7210). A design corporation offering all three needs three certificates.

California: open ownership, closed to the LLC

California is the reverse of New York on ownership and stricter on the entity. A business may offer civil, electrical or mechanical engineering if a California engineer in that branch is an owner, partner or officer in charge of the engineering practice, and all engineering is done by or under a licensee’s responsible charge (Cal. Bus. & Prof. Code § 6738(a)). A non-licensee may be a partner or officer but may not be the sole owner unless otherwise exempt (§ 6738(d)). The permitted forms are sole proprietorship, partnership, limited liability partnership, firm and corporation. The LLC is not on the list, and the California Architects Board states that an LLC is not allowed to provide architectural services in California.

In California, the investor may own the engineering firm and the firm may not be an LLC.

Architecture is more open still. A general stock corporation may provide architectural services with ownership not limited to architects, as long as an architect holds management control and responsible control, according to the Architects Board. California has no architecture firm registration; each architect files a report naming the entity through which they practice and updates it within 30 days of a change (Cal. Bus. & Prof. Code § 5558). Engineering firms file an organization record naming owners, officers and the licensee in responsible charge for each branch offered (§ 6738(h)). Section 6738 sunsets on January 1, 2034 unless extended.

A buyer also inherits a rule about old work. When a successor engineer takes over responsible charge, the original licensee is not relieved of responsibility for work already done (16 Cal. Code Regs. § 404.1). The retiring seller’s professional exposure stays with the seller, and the buyer’s diligence is on the firm’s contracts and claims, not the license.

Illinois: count the board seats, and one firm per managing agent

Illinois tests architecture firms by governance, not equity. At least two-thirds of a firm’s directors, general partners or LLC members must be licensed in any state as architects, engineers, structural engineers or land surveyors, and each location offering architecture needs a resident Illinois architect in responsible charge as managing agent, who must also be a director, general partner or member (225 ILCS 305/21). Engineering firms register as professional design firms with an Illinois engineer as managing agent and no ownership percentage (225 ILCS 325/23).

The engineering managing agent must work full time, and one licensee may not be managing agent for more than one firm doing business in Illinois (68 Ill. Adm. Code 1380.290). When a managing agent leaves, the agent and the firm must notify the state within 10 business days, and the firm has 30 days to name a replacement. Without timely notice, the registration terminates without a hearing.

In Illinois, one engineer can anchor only one firm, so a roll-up of three Illinois engineering firms needs three managing agents.

The structuring consequence: an acquirer that plans to merge Illinois targets into one operating company, or to keep them as separate subsidiaries, has to count its full-time Illinois engineers before it counts its firms, because the managing agent of one cannot serve another.

Texas: register the firm, keep a full-time licensee

Texas sets no ownership percentage in the engineering statute or in the board’s guidance. A business entity may not practice engineering unless it is registered with the board and the practice is carried on only by engineers (Tex. Occ. Code § 1001.405). Registration is annual and costs $25 for a sole practitioner and $150 for other entities, last verified October 2026. The firm must employ at least one full-time active licensee, and if it loses that person, its registration goes inactive until it tells the board it has one again (22 Tex. Admin. Code § 137.77). The rule sets no grace period.

Architecture firms register annually with the architecture board for $45, last verified October 2026 (Tex. Occ. Code § 1051.306). A firm that can no longer lawfully offer architecture must notify the board within 30 days and may not continue unless it employs or contracts with an architect (22 Tex. Admin. Code § 1.124).

The sale where the engineer retires at closing

Take an engineering firm sold for $8,000,000 to a buyer with no engineers of its own. The firm’s sole licensed principal is the seller, who plans to retire at closing.

In New York the sale fails before the retirement matters. The firm must be a PLLC owned by New York engineers, and the transfer to the buyer is void. The deal has to become an asset purchase by a licensed-owned entity or, at most, a minority position in a design professional corporation, and the seller cannot simply leave.

In Florida the equity sale is not blocked, and the clock starts when the seller leaves: 60 days to requalify. In Illinois it is 10 business days to notify and 30 days to replace, and the replacement must be full time and cannot be the managing agent of another Illinois firm. In Texas the engineering registration goes inactive the day the only full-time licensee leaves.

The asset in a design firm sale is the licensed person who stays, and the price should be contingent on that person being in place at closing.

The structuring consequence: a signed employment agreement with a successor licensee, acceptable to the board, is a closing condition rather than a post-closing task. Where the seller is the only licensee, the seller’s transition period should run past the state’s requalification window, and part of the price should be held back until the successor is registered.

The bottom line

New York requires every owner of a design PLLC to be licensed, and a transfer to anyone else is void.

New York’s statute buys out a dead or disqualified member and says nothing about a retiring one, so the operating agreement has to.

California lets non-licensees own engineering and architecture firms and does not let those firms be LLCs.

Illinois counts licensed board seats for architecture and allows one engineering managing agent per firm.

Texas and Florida set no ownership percentage and tie the firm’s right to practice to a licensed person in charge.

In every state, the licensed person who stays after closing is the asset the buyer is paying for.

What this page does not cover

Professional LLCs generally and how each profession caps outside ownership are on licensed professions. Law and accounting firms are on law firms and accounting firms. Buy-sell drafting generally is on transfers and buy-sell. Pennsylvania and the national model laws for engineering and architecture were not reviewed for this page.

Last verified October 2026.