Information About Our CPA Firm Structure

Morice, Layton & Fagan, is chartered as a limited-liability partnership in Maryland.  The firm is a Foreign Registered Limited Liability Partnership in New York.

To be a licensed CPA firm, each state has special ownership requirements.  Most states require the owners or partners of a CPA firm to be licensed CPAs themselves.  Additionally, state boards of accountancy do not allow corporations to be owners of or themselves licensed CPA firms.

Given this limitation, the Alternative Practice Structure for CPA firms was developed.  In simplicity, an alternative practice structure provides a vehicle whereby licensed CPAs can work with a support or service company (through a formal written agreement) to provide certain services to the CPA firm, including personnel, IT support, etc.  The CPA firm will then pay the support company a negotiated fee for the services that are provide to the CPA firm.  The CPA firm is completely independent in both ownership and governance.  There are several benefits and limitations present in a alternative practice structure.

ML&Fs has an alternative practice structure arrangement with Fiducial Business Systems, Inc.  The ownership of ML&F is 100% owned by the CPA partnership group.  Although the partners may have some employment relationships with Fiducial in one capacity or another, ML&F is a completely separate legal entity, owned and operated by the equity partners.  The equity partners main mission and focus is to manage and grow the partnership, while providing superior attest and consulting services.

One of the largest and more notable Alternative Practice Structures arrangements was McGladrey.  The firm sold its non-attest assets and business to H&R Block, Inc. in 1999.  RSM McGladrey Inc. was established as an indirect, wholly owned subsidiary of the Block organization.  McGladrey & Pullen was owned and managed by McGladrey & Pullen partners, independent of RSM McGladrey.  The two units of McGladrey were reunited in 2011 when McGladrey & Pullen purchased RSM from H&R Block.