Accountancy partnerships in California are subject to specific rules and regulations that must be followed to remain in compliance. In this blog, we will discuss some considerations when establishing and maintaining an accountancy partnership in California.
Establishing an Accountancy Partnership
An accountancy partnership in California must be approved for licensure by the California Board of Accountancy (CBA) [https://www.dca.ca.gov/cba/] before practicing or holding out to the public as an accountancy partnership. The partnership must have at least two partners, with at least one of them licensed to practice accountancy in California. Although there is no requirement under California law that the partnership have a written partnership agreement, it is strongly advised that a written agreement be prepared. The registration requirements for the partnership to hold liability insurance and establish other qualifications will usually be satisfied more expeditiously if a partnership agreement exists. Also, default rules under the California Revised Uniform Partnership Act will govern matters between the partners in the event no partnership agreement exists, and this may not always align with the intentions of the individual partners.
Except for certain specific activities, such as tax return preparation, a person must generally hold a valid California license to practice accounting in the State. Accordingly, a partnership’s license can be affected if one of the CPA/PA partners’ licenses becomes delinquent. If there are only two partners, the partnership would be deemed invalid if this occurred. However, if the partnership has more than two partners, it would still be considered valid so long as more than 50% of the partners hold valid California licenses.
Navigating the complexities of establishing and maintaining an accountancy partnership in California can be challenging. It is essential to remain in compliance with the CBA’s rules and regulations to ensure the continued success of your partnership. This blog is intended as an introduction to the subject and is not a comprehensive description of all such requirements.
This blog is written as of June 2025. Recommendations and legal requirements are changing rapidly, so please continue to review our legal updates or review postings on relevant government websites.
All blogs on this site are for educational purposes only, do not constitute legal advice or opinion, and should not be applied to your situation or any specific situation without consultation with counsel. Strategy Law, LLP does not provide any legal advice concerning any matter discussed in a blog except upon formal engagement, including, without limitation, execution of Strategy Law, LLP’s formal legal services agreement, and with respect to specific factual situations. No blog constitutes a guaranty, warranty, or prediction regarding the result of any legal matter discussed in the blog or any representation.
